Michigan Court of Appeals; Docket #320723; Unpublished
Judges Hoekstra, Sawyer, and Borrello; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
On 10/28/2015, the Michigan Supreme Court dismissed an application for leave to appeal on stipulation of the parties; Link to Order
STATUTORY INDEXING:
Coordinated Coverages [§3109a]
TOPICAL INDEXING:
Medicare Benefits
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion, the Court of Appeals issued several rulings:
1) Medicare was not the primary payer of benefits because 42 USC 1395y(b)(2)(A)(ii) specifies that Medicare “will not pay for services to the extent that payment has been made, or can reasonably be expected to be made, under a no-fault insurance policy”;
2) a prior determination of responsibility on the part of the no-fault insurer is unnecessary to bring a PIP benefits claim against the insurer; and
3) plaintiff’s failure to plead a count against Farm Bureau under the Medicare Secondary Payer (MSP) provision was not fatal to pursuing a claim against Farm Bureau, because the parties “addressed the issue in relation to their respective motions for summary disposition and the trial court specifically ruled on the viability of plaintiff’s private cause of action.”
Plaintiff was injured in an auto accident and Medicare paid her medical expenses. Defendant Farm Bureau, plaintiff’s no-fault insurer, paid none of the medical bills. Plaintiff brought this action for no-fault coverage. Defendant Farm Bureau moved for partial summary disposition, claiming plaintiff acknowledged her medical bills had been paid by Medicare and her Medicare supplemental insurance. Plaintiff also moved for partial summary disposition, claiming Farm Bureau’s no-fault liability was not eliminated by the Medicare payment and that 42 USC §1395y(b)(3)(A) creates a private cause of action for situations where Medicare paid for expenses that should have been paid by a no-fault insurer. The trial court granted partial summary disposition for Farm Bureau and held: 1) plaintiff’s medical coverage with Farm Bureau was coordinated and not primary, and therefore plaintiff could not seek benefits from Farm Bureau, and 2) even if the no-fault policy had been the primary insurer, it was up to Medicare, not plaintiff, to seek reimbursement for expenses that were paid on plaintiff’s behalf.
The Court of Appeals reversed. In so holding, the court determined that plaintiff’s no-fault policy provided uncoordinated coverage and, under the MSP provision, Medicare does not provide primary coverage when coverage is also provided by a “primary payer,” such as a no-fault insurer. The court stated:
“Given that plaintiff received medical coverage through Medicare, it follows from the plain policy language that the coverage available to plaintiff through defendant ‘must be primary’ and it ‘cannot be coordinated.’ Indeed, as the policy language recognizes, as a matter of law, plaintiff and defendant could only contract for a policy which made Medicare secondary to the insurance coverage provided by defendant. … Given that defendant has agreed to provide primary medical coverage for plaintiff’s injuries arising from an auto accident, it follows as well that Medicare was not responsible for plaintiff’s medical expenses because 42 USC 1395y(b)(2)(A)(ii) specifies that Medicare will not pay for services to the extent that payment has been made, or can reasonably be expected to be made, under a no-fault insurance policy.”
Regarding Farm Bureau’s argument that there had to be a prior judicial determination of responsibility, the Court of Appeals said:
“In making this argument, defendant ignores, however, that, in contrast to the present contract-based insurance dispute, Glover [v Liggett Group, Inc, 459 F3d 1304, 1308 (CA 11, 2006)] involved an action against a tortfeasor in which the injured party sought to simultaneously establish the alleged tortfeasor’s responsibility and to claim double damages under 42 USC 1395y(b)(3)(A) for medical expenses paid by Medicare. More recent case law has persuasively distinguished Glover on this basis and specifically limited Glover’s “demonstrated responsibility” condition precedent to the context of MSP suits against alleged tortfeasors as opposed to contract-based disputes involving health plans. … In short, Glover’s ‘determined responsibility’ condition precedent has been held not to apply to insurance contract disputes, meaning that, because defendant’s liability may be established by reference to the parties’ contract, plaintiff was not required to ‘first sue and win, in order to sue again’ under the double damages private cause of action created by 42 USC 1395y(b)(3)(A). … Defendant’s argument in this respect is without merit … in light of the private cause of action created by 42 USC 1395y(b)(3)(A), which expressly allows private citizens such as plaintiff to bring suit against a primary payer to effectuate recovery of funds expended by Medicare on her behalf. … In short, given the plain statutory language, it is clear that a private cause of action exists to recover funds paid by Medicare, and plaintiff is not precluded from seeking recovery from defendant merely because her bills have been paid by Medicare.”
Regarding the failure of plaintiff to include a claim under the MSP in her complaint, the Court of Appeals said:
“[T]he parties addressed the issue in relation to their respective motions for summary disposition and the trial court specifically ruled on the viability of plaintiff’s private cause of action. In these circumstances, we find it appropriate to allow plaintiff an opportunity to amend her pleadings on remand in order to add a claim under the MSP to her complaint.”
In conclusion, the Court of Appeals held that plaintiff had a private cause of action and, contrary to the trial court’s ruling, did not need to previously demonstrate Farm Bureau’s responsibility in order to proceed.
