In Humana v. Farmers Texas County Mutual Insurance Company, et al, No. 13-CV-611-LY (W.D. Texas, September 24, 2014) the court denied the defendants’ motion to dismiss and allowed Humana, a Medicare Advantage Organization (“MAO”), to pursue a private cause of action for double damages under the Medicare Secondary Payer Act, 42 U.S.C. § 1395y(b). In doing so, the court rejected the magistrate judge’s recommendation to grant the defendants’ motion to dismiss Humana’s claims. The court noted that in In re Avandia Mktg., 685 F.3d 353 (3d Cir. 2012), the Third Circuit addressed the same issue and held that a Medicare Advantage Organization, such as Humana, may bring a private cause of action against a primary plan under the secondary provision of the Act. Acknowledging that the Fifth Circuit had not addressed the issue, the court aligned itself with the reasoning of the Avandia opinion and concluded that the plan text of the Medicare Secondary Payer’s private cause of action provision unambiguously affords Human with a private right of action. While there continues to be uncertainty about the nature and extent of the recovery rights of MAOs, this decision brings us closer to resolution of the issue in Texas federal courts and ultimately in the Fifth Circuit.
