9 Fla. L. Weekly Supp. 187b

Insurance — Hospitals — Hospital liens — Torts — Class action complaint alleging that hospital liens for hospitals’ full charges against proceeds of no-fault and liability insurance policies available to Medicare beneficiaries injured in automobile accidents were improper under Medicare Secondary Payer statutes — MSP program does not limit a hospital’s charges to what Medicare would pay if Medicare were primary payer; rather hospital may seek and collect the greater of its full charges or the amount of third-party payment paid or payable to beneficiary, and hospital may attempt to collect amounts directly from third-party payer or from beneficiary who has received or is entitled to receive third-party payment — Court does not have authority to impose by judicial fiat same limit on MSP statute that federal courts have held was beyond the power of Department of Health and Human Services to impose — Counts seeking declaratory relief and alleging constructive trust/unjust enrichment are dismissed with prejudice to extent that they attempt to state a cause of action based on hospitals’ attempts to collect their full charges directly from any third-party payer, either through billing the payer directly or securing liens against the proceeds of third-party payments — Where amended complaint alleges generally that hospitals attempted to collect full charges directly from beneficiaries, but fails to include allegation that amount hospitals attempted to collect was in excess of amounts paid or payable from third-party payers to beneficiaries, counts are dismissed without prejudice to extent that they attempt to assert a cause of action for violating the MSP statutes and regulations by collecting charges directly from beneficiaries

EVA LUKSEN and DONNA MARIE HAFF on behalf of themselves and all others similarly situated, Plaintiffs, v. HCA — The HEALTHCARE COMPANY, Defendant. Circuit Court, 17th Judicial Circuit in and for Broward County, Civil Division, General Jurisdiction Division. Case No. 00016142 CACE 18. January 29, 2001. W. Herbert Moriarty, Judge. Counsel: Joanne Erde. Michael Mantheir. Kenneth Vianale. R. Timothy Vannatta. Michael Davis.

MEMORANDUM ORDER GRANTING MOTION TO DISMISS

THIS CAUSE came before the court on the motion (“Motion”) of the Defendant, HCA — The Healthcare Company (“HCA”), to dismiss Plaintiffs’ Amended Class Action Complaint (“Amended Complaint”). The court has reviewed the pleadings and the memoranda of law submitted by the parties, has heard argument of counsel, and is otherwise fully advised in the premises. For the reasons set forth below HCA’s Motion is GRANTED.I. Background

1. HCA’s Motion raises an issue of law with regard to the interpretation of federal statutes and regulations that make Medicare payments secondary to payments under automobile “no-fault” and liability insurance policies.

2. Plaintiffs are Medicare beneficiaries who were injured in automobile accidents. They each received treatment at hospitals alleged to be owned by or affiliated with HCA. HCA’s charges for this treatment were in excess of what Medicare would have paid. In the case of Plaintiff Haff, HCA filed a hospital lien for its full charges against the proceeds of no-fault and liability insurance policies available to her. It is alleged generally that HCA also sent bills directly to Haff, but the pleadings do not state the amount of the bills. Ultimately HCA collected $25,000 from Haff’s various insurers. It appears from the pleadings that this was less than the hospital’s full charges, but Plaintiffs do not allege whether this amount is more or less than what Medicare would have paid in the absence of no-fault and liability insurance. Rather, they allege that the liens were improper and that having collected from the other driver’s no-fault insurer, HCA was prohibited from seeking additional reimbursement from Haff’s no-fault insurer or from available liability insurance.

3. Plaintiff Luksen’s entire bill was $658.05. HCA billed Luksen’s no-fault insurer for its full charges and received payment of $548.04. It is alleged that this amount is in excess of what Medicare would pay. Luksen alleges that HCA subsequently billed her for the difference between its charges and the no-fault payment. Luksen paid this amount, but the Amended Complaint does not allege whether Luksen did so out of the proceeds of another insurance policy or out of her own pocket.

4. At the hearing on the Motion, Plaintiffs conceded, as they must, that, under the “Medicare Secondary Payer” (“MSP”) statutes and regulations and under federal case law, HCA must collect or attempt to collect its charges from third party payers, including no-fault and liability insurers.¹ They also conceded that HCA may attempt to collect its charges by filing liens against potential third party payments.

5. Plaintiffs nevertheless argue that, under this statutory program, HCA may collect its full charges only if those charges can be satisfied from the injured party’s no-fault benefits. If the charges exceed the no-fault benefit, then Plaintiffs contend that HCA may collect from other third party payers (such as liability insurers) or from the beneficiary only the balance of what Medicare would pay if it were the primary payer.

6. HCA argues correctly in its Motion that the MSP program does not limit its charges to what Medicare would pay if Medicare were primary. To the contrary, HCA may seek and collect the greater of its full charges or the amount of the third party payment paid or payable to the beneficiary. HCA may collect or attempt to collect these amounts directly from a third party payer or from the beneficiary where the beneficiary has received or is entitled to receive a third party payment.²II. Analysis

7. The Medicare Secondary Payer (“MSP”) statute is found at Title 42 United States Code, Section 1395y(b) and provides:

(2) Medicare secondary payer

(A) In general: Payment under this subchapter may not be made… with respect to any item or service to the extent that —

(i) payment has been made, or can reasonably be expected to be made, with respect to the item or service as required under paragraph (1) [relating to employer group plans], or

(ii) payment has been made or can reasonably be expected to be made promptly (as determined in accordance with regulations) under a workmen’s compensation law or plan of the United States or a state or under an automobile or liability insurance policy or plan (including a self-insured plan) or under no-fault insurance. (emphasis added).

8. Plaintiffs offer no convincing rationale under this statute for treating liability insurance and other third party payments differently from no-fault payments. In fact, the plain language of Section 1395y(b)(2)(A) and the federal case law precedent refute the limitation Plaintiffs suggest. American Hospital Ass’n v. Sullivan, 1990 U.S. Dist. LEXIS 6306, *31-*36 (D.D.C. May 24, 1990); Oregon Ass’n of Hospitals v. Bowen, 708 F. Supp. 1135, 1141-42 (D. Or. 1989). See also Joiner v. Medical Center East, Inc., 709 So. 2d 1209, 1219-22 (S. Ct. Ala. 1998); Vogt v. Wausau Hospitals, Inc., 184 Wis. 2d 404, 516 N.W.2d 791, 1994 Wisc. App. LEXIS 661 at *13. Section 1395y(b)(2)(A)(ii) treats all third party payers equally and places no limits on the amount the provider may collect from any third party payer. American Hospital Ass’n, 1990 U.S. Dist. LEXIS 6306 at *25-*28; Oregon Ass’n of Hospitals, 708 F. Supp. at 1140.

9. In Oregon Ass’n of Hospitals the court addressed the validity of certain administrative instructions issued by the Department of Health and Human Services (“HHS”) that purported to prohibit providers from submitting bills to liability insurers.³ The instructions further limited to the applicable Medicare fee the amount that the provider could collect even though a liability insurer was willing to pay the provider’s full charge. Oregon Ass’n of Hospitals, 708 F. Supp. at 1135. See also 42 C.F.R. § 411.54. The instructions thus effectuated essentially the same limitation that Plaintiffs contend is required.

10. The court held that these instructions were in direct conflict with the plain language of the MSP statute. Oregon Ass’n of Hospitals, 708 F. Supp. at 1141. See also American Hosp. Ass’n., 1990 U.S. Dist. LEXIS 6306 at *34-*37. The court further held that providers had a legal right to pursue and collect their full charges in excess of any applicable Medicare limit directly from the liability insurer. Oregon Ass’n of Hospitals, 708 F. Supp. at 1140-42. See also American Hosp. Ass’n., 1990 U.S. Dist. LEXIS 6306 at *25-*37. “It follows that any rules promulgated by HCFA which have the effect of limiting [a provider’s] recovery . . . are void.” Oregon Ass’n of Hospitals, 708 F. Supp. at 1141.

11. Shortly after the decision in Oregon Ass’n of Hospitals, and notwithstanding the court’s holding, HCFA promulgated 42 C.F.R. § 411.54,⁴ which codified the instructions the court had held invalid. American Hospital Ass’n, 1990 U.S. Dist. LEXIS 6306 at *5-*7, *18-*23. As did the court in Oregon Ass’n of Hospitals, the court in American Association of Hospitals found that the regulation in question “ignored the specific instructions of Congress.” Id. at *34. The court concluded that the prohibitions against providers billing liability insurers for their full charges were “arbitrary, capricious an abuse of discretion and not in accordance with the law.” Id. at *36-*37. It therefore held that any regulation limiting the “statutory right” of Medicare providers to recover their full charges directly from liability insurers was void. Id. In particular, the Court held that there is no legal basis to treat liability insurers and payments differently from no-fault insurers and no-fault payments. Id. at *26-*27, *36-*37. The court issued a permanent injunction prohibiting enforcement of Section 411.54. Id. at *37.

12. State courts must follow federal decisions respecting interpretations of federal statutes. Cadieux v. Cadieux, 75 So. 2d 700, 702 (Fla. 1954); Chambers v. Lofton, 67 So. 2d 220, 221 (Fla. 1953); Seaboard Air Line Railway Co. v. Bd. Of Bond Trustees, 91 Fla. 612, 624, 108 So. 689, 694 (Fla. 1926); Forcino v. Nat’l. R.R. Passenger Corp., 671 So. 2d 888, 889 (Fla. 5th DCA 1996). Accordingly, the holdings in American Hospital Ass’n and in Oregon Ass’n of Hospitals are sufficient to establish the validity of HCA’s position on the issue of billing and collecting full charges from third party payers. Nevertheless, it bears mentioning that Congress also has considered and rejected the very limitation that Plaintiffs suggest.

13. In 1989, while litigating the Oregon Ass’n of Hospitals and American Hospital Ass’n cases, HHS requested that Congress amend the MSP statute to bar providers from collecting more than deductibles and co-insurance from liability payments. American Hospital Ass’n, 1990 U.S. Dist. LEXIS 6306 at *31, citing, Report to Accompany the Recommendations of the Committee on Ways and Means, House of Representatives (Sept. 1989). At this time, Congress was aware of both these cases. See Senate Committee on Finance, OBRA 1989, 101 Cong., 1st Sess., 135 Cong. Rec. 13,113, 13,226-27 (Oct. 12, 1989) (“The Committee is aware that there are two lawsuits addressing the lien issue. . . . .”). Congress nevertheless rejected HHS’s request.

14. In this case, Plaintiffs essentially ask this court to impose by judicial fiat the same limit on the MSP statute that the above cited cases held was beyond the power of HHS to impose. Even if the court had this power, which it does not, Plaintiffs can point to no authority under the MSP statute in support of their extraordinary request. Instead, Plaintiffs argue that allowing HCA to recover its full charges violates another federal statute, 42 U.S.C. § 1395cc.

This section of the Medicare Act sets forth requirements for “Provider Agreements” between Medicare and hospitals (among other health care providers).

15. Section 1395cc states that, to be eligible for Medicare reimbursement, providers must agree not to charge “any individual or other person for items or services for which such individual is entitled to have payment made under [Medicare] except for deduction of co-insurance amounts. . .” 42 U.S.C. §1395(cc)(a)(1)(A). (emphasis added). Plaintiffs argue that liability insurers are “other persons” within the meaning of Section 1395cc and, therefore, that allowing HCA to collect charges directly from third party payers (or from third party payments paid or payable to the beneficiary) in excess of what Medicare would pay violates the provisions of Section 1395cc and HCA’s provider agreement.

16. This argument is without merit. American Hospital Ass’n, 1990 U.S. Dist. LEXIS 6306 at *28-*37; Oregon Ass’n of Hospitals, 708 F. Supp. at 1141; Vogt, 184 Wis. 2d 404, 516 N.W.2d 791, 1994 Wisc. App. LEXIS 661 at *13. Where payment is available from a third party payer, there simply is no Medicare coverage available. American Hospital Ass’n, 1990 U.S. Dist. LEXIS 6306 at *28; Oregon Ass’n of Hospitals, 708 F. Supp. at 1141-42; Vogt, 184 Wis. 2d 404, 516 N.W.2d 791, 1994 Wisc. App. LEXIS 661 at *13.

[T]he provider agreement does not apply to a Medicare “beneficiary” who is not “entitled to have payment made.” The MSP statute prohibits Medicare from paying when a liability insurer is available to pay promptly. . . . Since the provider agreement does not apply in this situation, HCFA has no authority under the statute to prevent [the provider] from recovering its actual charges from a liability insurer who is available to pay promptly.

Oregon Ass’n of Hospitals, 708 F. Supp. at 1141. (emphasis added). Accordingly, neither the provider agreement nor Section 1395cc creates any impediment to a provider collecting its full charges. American Hospital Ass’n, 1990 U.S. Dist. LEXIS 6306 at *37; Oregon Ass’n of Hospitals, 708 F. Supp. at 1141-42; Joiner, 709 So. 2d at 1221; Vogt, 184 Wis. 2d 404, 516 N.W.2d 791, 1994 Wisc. App. LEXIS 661 at *12.

17. Finally, Plaintiffs argue that this court may ignore the plain language of the MSP statute and the federal case law in order to balance what Plaintiffs contend are two competing interests associated with Medicare: (1) saving money; and (2) protecting beneficiaries from high medical bills. Plaintiffs point out that allowing providers to collect charges in excess of what Medicare otherwise would pay will diminish the amount available to the beneficiary from any liability payment. Put simply, Plaintiffs contend that, in balancing these competing interests, beneficiaries should be entitled to benefit financially from the MSP program.

18. Oddly, Plaintiffs cite Oregon Ass’n of Hospitals in support of this premise. The only reference in that case to Medicare’s supposed interest in protecting beneficiaries comes from the court’s recapitulation of the government’s own arguments in support of its administrative instructions. That reference is not part of the court’s holding. As discussed above, the court found the instructions invalid and held that HHS may not impose any requirement that prohibits a provider from collecting its full charges from available third party payments. The court thus resolved any “conflict” in Medicare’s priorities in favor of providers.

19. In American Hospital Ass’n the government again cited to Medicare’s “interest” in protecting beneficiaries as support for the regulation at issue. In response, the court stated:

Because the court finds that the regulation is in direct contradiction of the statute, it need look no further at the Secretary’s actions. The Secretary has promulgated these regulations in the name of protecting beneficiaries. Although that goal may be particularly important, the Secretary has other entities to protect and their protection may be in conflict with protecting beneficiaries. When Congress enacted the secondary payer provisions, it struck a balance between saving money and protecting beneficiaries. In the process of . . . protecting beneficiaries, the Secretary has ignored the specific instructions of Congress. . . . Such a departure from the balance struck by Congress between effective health care delivery and savings to the Medicare program is arbitrary, capricious and not in accordance with the law. The Secretary’s discretion does not entitle her to rewrite the law.

American Hospital Ass’n 1990 U.S. Dist. LEXIS 6306 at *33-*34 citing Nat’l Ass’n of Patients on Hemodialysis and Transplantation v. Heckler, 588 F. Supp. 1108, 1128 (D.D.C. 1984).

20. In reality, as these cases recognize, once a beneficiary has been awarded a settlement from an insurer who is found responsible for medical costs, the Medicare program has very little interest in “protecting” the beneficiary. The beneficiary certainly will present the provider’s full bill to the insurer or to a trier of fact in support of her damages claim. Once the liability determination is made and compensation is forthcoming based on the provider’s full bill, the beneficiary, from a financial standpoint, is placed in the status quo ante. She is neither better nor worse off than if Medicare had been the primary payer. Plaintiffs’ bare desire to improve their financial position through application of the MSP statute will not support a departure from the balance Congress established among competing interests.

21. Current federal regulations are in accord with the language and intent of the MSP statute in this and in all other respects. The relevant regulations state specifically that the amount medicare might pay for service “does not affect the amount that a third party payer may pay” for the same service. 42 C.F.R. §411.31(a). Federal regulations further provide:

[T]he amounts the provider or supplier may collect or seek to collect for the Medicare covered services from the beneficiary or any entity other than a worker’s compensation plan, the no-fault insurer, or the employer plan or Medicare are limited to the following:

(1) the amount paid or payable by the third party payer to the beneficiary. If this amount exceeds the amount payable by Medicare (without regard to deductible or co-insurance), the provider or supplier may retain the third party payment in full without violating the terms of the provider agreement or the conditions of the assignment.

42 C.F.R. Section 411.35(c) (emphasis added).

22. Plaintiffs rely instead on 42 C.F.R. § 422.31(b), which states:

(b) With respect to Workers’ compensation plans, no-fault insurers, and employer group health plans, a provider or supplier may bill its full charges and expect those charges to be paid unless there are limits imposed by laws other than [the Medicare Act] or by agreements with the third party payer.

23. Plaintiffs argue that use of the term “full charges” in this regulation, together with the omission of specific reference to “liability insurers,” implies that providers may collect their “full charges” only from the listed third party payers but are limited to the Medicare rate for all others, i.e., liability insurers. Plaintiffs’ error is in attempting to isolate a single phrase contained in one regulation and imparting to it a meaning that contradicts not only the plain language of the MSP statute and other MSP regulations but also long standing federal case law precedent.

24. As discussed above, providers have a federal statutory right to collect their full charges from third party payers and payments. Regulations limiting this right are void. American Hospital Ass’n 1990 U.S. Dist. LEXIS 6306 at * 37; Oregon Ass’n of Hospitals 708 F. Supp. at 1141-42. Plaintiffs thus insist on an interpretation that, if correct, this court would be forced to declare void. The rules of regulatory construction, like the rules of statutory construction, require that this court read Section 411.31(b) in pari materia with the MSP statute and other MSP regulations to achieve a reasonable interpretation that gives force and effect to the intent of Congress and that harmonizes all the relevant statutory and regulatory provisions.

25. The rather odd wording of Section 411.31(b) can be understood by reference to the circumstances of its promulgation. Sections 411.31 and 411.35 were promulgated in 1989 as part of a complete restructuring of the MSP and other Medicare regulations. 54 Fed. Reg. 41716 (Oct. 11, 1989). Prior to this restructuring, the MSP regulations merely parroted the statutory language:

Exclusion from Medicare Payment. (1) Medicare payment may not be made for any services to the extent that payment has been made or can reasonably be expected to be made under automobile medical or no-fault insurance or under any liability insurance policy or plan (including a self-insured plan).

42 C.F.R. § 405.322(c) (1988).

26. As part of the 1989 amendments, HHS treated different types of third party payers in separate subparts of the newly created Chapter 411. Subpart B [§§ 411.20-411.411.37] contained general provisions, including Sections 411.31 and 411.35. Subpart C [§§ 411.440-411.47] dealt specifically with workers’ compensation, Subpart D [§§ 411.50-411.54] with liability and no-fault insurance and Subpart E [§§ 411.100-411.130] with group health plans.

27. It was as part of this restructuring that HHS promulgated Section 411.54 prohibiting providers from billing their full charges to liability insurers and requiring them to accept the Medicare rate as payment in full. See American Hospital Ass’n 1990 U.S. Dist. LEXIS 6306 at *19-*22. The omission in Section 411.31(b) of any reference to liability insurance was in recognition of the more specific rule for liability insurers set forth in Section 411.54. After the court in American Hospital Ass’n invalidated Section 411.54, there simply was no regulation dealing specifically with liability insurance. In the absence of a specific regulation, the court must apply the general principles embodied in the MSP statute, and, to the extent that they do not conflict with congressional intent, the general MSP regulations.

28. Section 411.31(a) specifically states that the amount Medicare might pay “does not affect the amount a third party payer may pay.” The federal case law makes it clear that providers may collect their full charges from liability insurers and any limitation on that right is void. Accordingly, the only reasonable interpretation of the relevant regulations, and the only one that does not create a conflict with the congressional intent embodied in the MSP statute is that the omission of reference to liability insurance in Section 411.31(b) is merely a vestige of a previously invalidated regulatory scheme that HHS has failed to correct with new or revised regulations. It cannot be read as somehow limiting a provider to collecting no more than the Medicare rate from liability insurers or payments.

29. There is some indication that the Secretary of HHS had intended, at various times, to promulgate new regulations that would take into account the decision in American Hospital Ass’n. Joiner, 709 So. 2d at 1219-21. For reasons known only to the Secretary, neither she nor any of her predecessors have undertaken to revise the MSP regulations. However, HHS has issued numerous instructions acknowledging the decision in American Hospital Ass’n and stating specifically that providers may bill and collect their full charges directly from liability insurers. See Memorandum of Thomas E. Hoyer, Director of the Office of Chronic Care and Insurance Policy, Health Care Financing Administration, Department of Health and Human Services (March 12, 1996) reprinted in Joiner, 709 So. 2d at 1219-20; Letter from Richard Warren, Associate Regional Administrator, Heath Care Financing Administration, to all Part A & B Medicare Contractors (Nov. 13, 1991) Reprinted in Joiner, 709 So. 2d at 1219; Program Memorandum of August 21, 1995, reprinted in Joiner, 709 So. 2d at 1220-21 (hereinafter referred to collectively as “Program Memoranda”).

30. The MSP statute does not speak directly to a provider’s right to collect its full charges directly from the beneficiary. Section 411.35(c) states merely that the amounts that a provider may collect or seek to collect from a beneficiary are limited to the amount paid or payable by a third party payer to the beneficiary. This makes perfect sense in light of the statutory mandate that no Medicare coverage exists where payment is available from third party payers. Implicit in this formulation of the rule is that Medicare coverage does exist when third party payments are not available, for instance, when third party benefits are exhausted. Thus, if the provider may collect its full charge from funds paid or payable to the beneficiary, it is free to do so directly from the beneficiary. 42 C.F.R. § 44.35(c); Program Memoranda, reprinted in Joiner, 709 So. 2d at 1219-1221; Joiner, 709 So. 2d at 1221; Vogt v. Wausau Hospitals, Inc., 184 Wis. 2d 404, 516 N.W.2d 791, 1994 Wisc. App. Lexis 661 at *13 (Ct. App. Wisc., 3d Dist. 1994). If third party funds are not payable or paid or are exhausted, then the provider may not pursue the beneficiary, but must look to Medicare for a secondary payment if one is available under the applicable formulae.⁵

31. For example, in Joiner the provider filed a hospital lien for its full charges against the proceeds of a liability insurance settlement. The full charges of $14,778.76 were in excess of what Medicare would have paid. Some nine months after the hospital filed its lien, Joiner settled with the tort-feasor’s liability insurer for $50,000. Relying on American Hospital Ass’n, supra and Oregon Ass’n of Hospitals, supra, the Supreme Court of Alabama held that the hospital had a right under federal law to obtain full payment of its charges from the proceeds of the liability settlement and could collect its charges directly from the beneficiary. Joiner, 709 So. 2d at 1221.

32. Similarly, in Vogt, the court held that, under Section 1395y(b)(2)(A), the hospital had a statutory right to collect its full charge. Vogt’s automobile insurer had settled his claim under a policy of uninsured motorist insurance.⁶ Accordingly, the court held that the hospital could bill and collect its full charge directly from the beneficiary. Vogt, 184 Wis. 2d 404, 516 N.W.2d 791, 1994 Wisc. App. LEXIS 661 at *13.

33. In light of the foregoing, it is ORDERED AND ADJUDGED:

(1) Count I of the Amended Complaint for Declaratory Relief and Count II for Constructive Trust/Unjust Enrichment are dismissed with prejudice to the extent that they attempt to state a cause of action based on HCA’s alleged attempts to collect its full charge directly from any third party payer (including no-fault and liability insurers) either through billing the third party payer directly or by securing liens against the proceeds of third party payments.

(2) Although the Amended Complaint alleges generally that HCA made attempts to collect its full charges directly from the named plaintiffs, such activity is not a violation of the MSP statutes or regulations, unless the amount HCA attempted to collect was in excess of the amounts paid or payable from a third party payer to the Plaintiffs. The Plaintiffs have not made this allegation. Accordingly, Counts I and II of the Amended Complaint are dismissed without prejudice to the extent that they attempt to assert a cause of action against HCA for violating the MSP statutes and regulations by collecting charges directly from the beneficiary and Plaintiffs shall have twenty (20) days to amend this Complaint in accordance herewith.

__________________

¹“Third Party Payer” is defined as an “insurance policy, plan, or program that is primary to Medicare.” 42 C.F.R. § 411.21. An insurance policy, plan or program is “primary” to Medicare if it falls within the ambit of 42 U.S.C. § 1395y(b)(2)(A)(ii). The terms “Primary Payer” and “third party payer” are therefore synonymous when used in connection with a MSP program. For ease of reference, the court will use the term “third party payer” throughout this Memorandum Order.

²“Third Party Payer” is defined as an “insurance policy, plan, or program that is primary to Medicare.” 42 C.F.R § 411.21. An insurance policy, plan or program is “primary” to Medicare if it falls within the ambit of 42 U.S.C. § 1395y(b)(2)(A)(ii). The terms “Primary Payer” and “third party payer” are therefore synonymous when used in connection with a MSP program. For ease of reference, the court will use the term “third party payer” throughout this Memorandum Order.

³HHS is the federal administrative department in which the Medicare program is housed. “HCFA,” or the Health Care Financing Administration, is the administrative agency within the Department of Health and Human Services responsible for the day to day oversight of the Medicare Program.

⁴In relevant part, Section 411.54 provided:

(b) Applicability. This section applies when a beneficiary has received a liability insurance payment or has a claim pending against a liability insurer for injuries or illness allegedly caused by another party.

(c) Basic Rules —

(2) Specific Limitations:…the provider —

(i) May not bill the liability insurer nor place a lien against the beneficiary’s liability settlement for Medicare covered services;

(ii) May only bill Medicare for Medicare covered services; and

(iii) May bill the beneficiary only for applicable Medicare deductible and co-insurance amounts… .

⁵If a balance remains after third party benefits are exhausted, then the provider may submit a bill to Medicare for any difference between the third party payment and the Medicare fee. 42 C.F.R. §§ 411.32-411.33 (basis and amount of Medicare secondary payments).

⁶Uninsured Motorist insurance is included within the definition of “liability insurance.” 42 C.F.R. § 411.50(b).

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