This post is a little different. Several of my colleagues – Reed Smith attorneys Robert J. Hill, Joseph W. Metro, Kevin M. Madagan, Andrew Y. Lu, Sung W. Park, Janine R. Tougas – wrote a client alert on the four recent executive orders that concerned pharmaceutical pricing. We had
We saw recently that Centers for Medicare & Medicaid Services (“CMS”) has sent its proposed “Regulation To Require Drug Pricing Transparency” to the Office of Management & Budget (“OMB”). We’d heard about this proposed regulation, of course, but we hadn’t gotten around to reading it. We finally took the time.
Many readers probably…
We’ve previously written several posts (not recently) on Medicare secondary payer (“MSP”) issues – which we characterized as “boring.” The recent MSP decision, Humana Insurance Co. v. Paris Blank LLP, 2016 WL 2745297, 187 F. Supp.3d 676 (E.D. Va. 2016), is a lot less boring. That’s because of the defendant – a plaintiff-side law firm.
And the law firm lost.
What’s going on? To start with, in addition to the government itself, certain private entities, “Medicare Advantage Organizations” (“MAO”) (abbreviations are ubiquitous in this area) are allowed to bring suits to recover as MSPs (that was what one of our earlier posts was about). The MSP statute is quite broad as to who can be legally liable for not ensuring that Medicare is treated as a secondary payer:
any or all entities that are or were required or responsible (directly, as an insurer or self-insurer, as a third-party administrator, as an employer that sponsors or contributes to a group health plan, or large group health plan, or otherwise) to make payment with respect to the same item or service (or any portion thereof) under a primary plan.
42 U.S.C. §1395y(b)(2)(A)(iii). Recovery in an amount double the actual Medicare outlay is available in litigated cases. Id.
In our neck of the woods (PA & NJ, anyway), a MAO’s ability to sue as if it were the government is already established. In re Avandia Marketing, Sales Practices, & Products Liability Litigation, 685 F.3d 353 (3d Cir. 2012). (We note that our CA blogger would view this issue differently, see Parra v. PacifiCare of Arizona, Inc., 715 F.3d 1146, 1154 (9th Cir. 2013)). So the fact that Humana held that an MAO had standing to sue, 2016 WL 2745297, at *4, would not have resulted in this post.
What interests us is the holding that a lawyer and his law firm – thankfully, a plaintiff law firm − can be an “entity” “responsible (directly . . . or otherwise)” for making a MSP payment. The allegations in Humana were not kind to the defendants. They represented a plaintiff in an auto accident. Supposedly, they received a one settlement check made out jointly to it and the plaintiff MAO, but “ultimately deposited the check without [the MAO’s] endorsement.” Id. at *2. Allegedly, certain other settlement checks “from several insurance companies” were also received and deposited, without joint the joint payor issue. Id. All told, the settlements totaled $475,600. Id.
In 2012, the Third Circuit considered whether companies who provide insurance under Medicare Part C, known as Medicare Advance Organizations (“MAOs”), can seek reimbursement of medical expenses from pharmaceutical companies who settled with their insureds on litigation claims related to use of the pharmaceutical company’s drug. That’s a mouthful, but essentially the question was whether MAOs can create a whole other litigation related to a mass tort in which they seek reimbursement for covering the mass-tort plaintiffs’ injuries. The answer from the Third Circuit was that they can. See In re Avandia Marketing, Sales Practices and Products Liability Litig., 685 F.3d 353 (3d Cir. 2012). Not great. But then last month the district court in that same case considered whether those MAOs do this in a class action. If so, that could foster a lot of this litigation. This time, however, the answer was no. See In re Avandia Marketing, Sales Practices and Products Liability Litig., 2014 U.S. Dist. LEXIS 164510 (Nov. 24, 2014 E.D. Pa.). And given the factual background of this case, that answer is no surprise.
The underlying litigation was the Avandia mass tort. GlaxoSmithKline, the manufacturer, settled with thousands of plaintiffs and thereby became obligated under Medicare law to reimburse certain MAOs that had initially paid the medical costs of plaintiffs. That resulted, when applicable, in a lien on the settlement funds by MAOs. GSK set aside a percentage of the settlement funds to account for those liens. Id. at *14. GSK also agreed with many MAOs to enter into Private Lien Resolution Programs (“PLRPs”), which satisfied the MAO liens. Id. at *14. GSK did this with 56 MAOs, which covered the vast majority of Avandia plaintiffs. Id. at *5. It sought to enter into PLRPs with other MAOs, but had not done so with 94 others at the time the court was considering plaintiffs’ class certification motion. These other 94 MAOs covered only a small share of the Avandia plaintiffs. Id. There was some evidence that many, not all, of those MAOs were not interested in PLRPs or collecting on liens.
We do this blog not just to tout good results, slam bad decisions, and relay our likes and dislikes on various subjects, but to provide information that can help drug and device manufacturer defendants get better results in the litigations they face. We do not presume, except facetiously, that our posts really do move the…
We noted briefly on Tuesday afternoon that the dyspeptic verdict for more than $330 million in the Louisiana AG action over J&J’s marketing of Risperdal had been reversed by the Louisiana Supreme Court and judgment entered for the defendants. After a little time to digest the decision, we can say that it is thoroughly satisfying…
In most states, the most famous exception being Louisiana, there’s no such thing as a “direct action” against an insurance company by the allegedly injured person. That means that X (or someone claiming through X), who was allegedly injured by Y, cannot sue Z, who is Y’s liability insurer.
Well, now it appears that there…
sure why we have heard so much cheesy music from the 1970s recently. (It is a musical mystery, like why Genius
determined that Billy Joel’s “Lullabye” belongs in its Nü-Metal Mix.) We
do not think that Foreigner was talking about writing a blog post in “Feels Like
The First Time,” but
We have reported to you occasionally, but not consistently or reliably or intelligibly, about the new obligation of product liability defendants and others to report settlements and other payments on personal injury claims to Medicare authorities. See, for example, our posts titled Boring Stuff We Need to Know and More Boring Stuff We Need to…