Michigan Spine and Brain Surgeons PLLC vs State Farm Mutual Automobile Insurance Company case, US Court of Appeals for the Sixth Circuit

Michigan Spine and Brain Surgeons PLLC vs State Farm Mutual Automobile
Insurance Company case, US Court of Appeals for the Sixth Circuit, 758 F. 3d 787;
2014 U.S. App. LEXIS 13499, 2014 FED App. 0154P (6th Circ) (Decided 7/16/2014)
The Michigan Spine and Brain Surgeons PLLC vs State Farm case addresses the
Michigan Spine Group’s right to bring a private cause of action against State Farm
under the MSP Act . State Farm’s insured, Jean Warner, allegedly sustained injuries in
an automobile accident on October 26, 2010. Ms. Warner received treatment from the
Michigan Spine Group. State Farm refused to pay the Group’s bill that amounted to
approximately $26,000.00 stating that Ms. Warner’s treatment was due to a pre-existing
condition.

Michigan Spine Group subsequently submitted their bill to Medicare, which made a
conditional payment in the area of $5,000.00. Ms. Warner became Medicare eligible in
2000.

Michigan Spine Group sued State Farm in state court alleging that payment of the
medical benefits should have been made under Michigan’s No-Fault Act. It also
claimed damages under the Medicare Secondary Payer (MSP) Act’s private cause of
action provision that allows claims against primary plans that fail to pay owed medical
expenses. State Farm removed the action to federal court and filed a motion to dismiss the
MSP Act claim. The district court granted the motion to dismiss and remanded the action to state court.

The issue on appeal was whether a health care provider may bring the Medicare
Secondary Payer Act’s private cause of action against a non-group health plan that denies
coverage for a reason besides Medicare eligibility.

The Sixth Circuit Court of Appeals in deciding that the Michigan Spine Group may
pursue a private cause of action claim reviewed the language of the MSP private cause
of action provision. It noted that paragraph one and the first three subparagraphs of
paragraph one, prevent group health plans from “taking into account” that an individual
is entitled to Medicare benefits due to being at least 65 years old, disabled or diagnosed
with end-stage renal disease when denying coverage. 42 U.S.C. sections 1395 y(b)(1).
Paragraph two was also reviewed and noted to indicate that only primary plans that are
group health plans need abide by the group health plan requirements in paragraph one.
Subparagraph (3)(A), the private cause of action, however seemed to apply to all primary
plans, group and non-group health plans. Since Congress added the private cause of
action language to the MSP Act in order to “preserve the fiscal integrity of the Medicare
system”, this Court held that the Medicare eligibility requirement in paragraph one only
applied to group health plans and not to non-group health plans. In light of this, the
Michigan Spine Group was able to pursue a private cause of action against State Farm.