American Journal of Law & Medicine

Subrogation and Medicare: Eleventh Circuit holding facilitates enforcement of Medicare secondary payor statute - United States v. Baxter Int'l, Inc.

The United States Court of Appeals for the Eleventh Circuit held that the Government was not required, under Rule 8 of the Federal Rules of Civil Procedure, to identify each beneficiary that received Medicare payments in lieu of a primary insurer's payment in a suit under the Medicare Secondary Payer statute. (2) Moreover, the Medicare Secondary Payer ("MSP") statute allows Medicare to make conditional payments even when it reasonably anticipates that another insurer will eventually pay, although not within 120 days. (3) The government's allegations that defendants qualified as "self-insured" were sufficient to survive a Federal Rule Of Civil Procedure 12(b)(6) challenge. (4) Constructive, and not actual, knowledge of Medicare payments is all that is required of the defendants when reimbursing beneficiaries. (5)

The United States brought suit against manufacturers of silicone breast implants for a silicone breast implant products liability litigation settlement fund, seeking to recover funds paid out to Medicare-eligible patients who were or would be compensated under a revised settlement program through a fund set up by the defendants. While the government initially sued under both the MSP statute and the Medical Care Recovery Act, it appealed only the MSP claims. The MSP statute designates Medicare as the secondary, rather than primary, payer under certain conditions. (6) As a result, Medicare is entitled to recoup from the primary payor if it paid for a service that would be properly covered by the primary insurer. …

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