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Supreme Court asked to review case seeking double damages under MSP

Supreme Court asked to review case seeking double damages under MSP

The U.S. Supreme Court has been petitioned to review the case of a Texas man who sued under Medicare Secondary Payer law to recover double damages from his workers compensation insurer for two back surgeries.

A writ of certiorari was filed last month in Guadalupe Caldera v. Insurance Co. of the State of Pennsylvania, said Daniel Horne, Mr. Caldera's attorney. The filing asks the high court to consider the conditions that are required to allow people to sue for double damages under the Medicare Secondary Payer Act.

ICSP is expected to file a response by Wednesday, said Mr. Horne, an attorney with law firm Stone & Horne L.L.P. in Corpus Christi, Texas.

The Medicare Secondary Payer Act requires self-insured employers and insurers to act as primary payers for workers compensation and liability claims involving Medicare beneficiaries. The Centers for Medicare and Medicaid Services can recoup medical benefits it has paid on behalf of beneficiaries, as well as require payers to set aside funds to pay for future medical costs related to a beneficiary's injury.

A clause in the act provides a “private cause of action” for double damages “in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement)” under the law.

Mr. Caldera worked as a store clerk received workers comp benefits for a back injury he suffered in 1995, according his attorney and a May ruling from the 5th U.S. Circuit Court of Appeals. Mr. Caldera then applied for and received Medicare benefits in 1998.


Mr. Caldera received two back surgeries in 2005 and 2006, but did not receive preauthorization for the procedures as is required under Texas workers comp law, records show. Medicare paid $42,637 for the surgeries and Mr. Caldera filed a claim with ICSP for the costs, arguing that Medicare was not responsible for the claim.

ICSP denied Mr. Caldera's claim, and the Texas Department of Insurance upheld the insurer's denial, records show. Mr. Caldera later sued ICSP in Texas court to establish that his work injury led to his back surgeries, which resulted in a judgment in his favor but did not result in any benefit payments. He also sued ICSP under the Medicare Secondary Payer Act to recover double damages from the insurer for failing to reimburse Mr. Caldera for the back surgeries.

A three-judge panel of the 5th U.S. Circuit Court of Appeals unanimously ruled that Mr. Caldera could not recover damages under Medicare Secondary Payer law because he failed to meet Texas requirements for surgery preauthorization. Therefore, ICSP could not “reasonably be expected” to act as the primary payer for Mr. Caldera's back surgeries, the court found.

“Under the MSP, if a claimant fails to file a proper claim in accordance with state law requirements and, therefore, cannot recover benefits from the primary payer, so be it,” the district court ruling said. “Medicare can refuse to make a conditional payment, or it can seek reimbursement from the claimant himself.”

The writ filed on Mr. Caldera's behalf last month asks the Supreme Court to consider whether the Texas state law requirements require Medicare to act as a primary payer by requiring claimants to follow state law before they can be eligible for Medicare reimbursement.

“Whether the intent of Congress to protect the Medicare Trust Fund can be pre-empted by a state law preauthorization requirement, or any state law barriers, after Medicare has already made a conditional payment for the same service, is an important question,” the filing reads.

The Supreme Court filing notes that three U.S. Circuit Courts have had differing opinions on when individuals can bring a private cause of action for double damages under Medicare Secondary Payer law.