Parra v. PacifiCare Arizona

The Medicare Advantage Organization Statute does not grant a private right of action to recover payments made on behalf of a plan participant, and a Medicare Advantage Organization plan cannot sue the survivors of a plan participant for reimbursement for “medical expenses out of the proceeds of an automobile insurance policy.”

Manuel Parra, a participant in a Medicare Advantage Organization (“MAO”) plan offered by PacifiCare of Arizona, Inc. (“PacifiCare”), died after being struck by a car. His wife and children (the “Survivors”) and PacifiCare claimed damages against the driver’s automobile insurance policy for wrongful death and the amount spent for Parra’s care. The Survivors filed seeking declaratory and injunctive relief, claiming policy proceeds were not subject to PacifiCare's anticipated claims. PacifiCare counterclaimed, seeking declaratory relief, claiming it was entitled to reimbursement under its contract with Parra and directly under the Medicare Act. The district court granted the Survivors’ motion for summary judgment finding that PacifiCare did not have a “private cause of action under the Medicare statute or the Medicare Secondary Payer Act,” and PacifiCare appealed. The Ninth Circuit held that PacifiCare failed to state a claim arising under the Medicare Act because (1) the MAO statute does not create a cause of action and (2) the Private Cause of Action provision applies only “in the case of a primary plan which fails to provide for primary payment.” The MAO Statute describes when coverage is secondary to other insurance and allows plan provisions for recovery against a primary plan, which is what PacifiCare did here. Also, the panel found that the Private Cause of Action provision did not apply because PacifiCare’s claims were against the Survivors, not the primary plan, and the Private Cause of Action was “intended to allow primary parties to vindicate wrongs occasioned by the failure of primary plans to make payments.” AFFIRMED.