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Delay in Satisfying Medical Malpractice Judgment Does Not Constitute Failure to Pay Under the Medicare Secondary Payer Act

Netro v. GBMC, No. 17-1597, (4th Cir. 2018) available at: http://www.ca4.uscourts.gov/opinions/171597.P.pdf

(July 19, 2018) Garrett Cusack, Summer Associate.

For more information, contact Eric Leppo, Esquire

In 1980, Congress enacted the Medicare Secondary Payer Act (MSP) to address rising costs of medical entitlements. The MSP includes a “double damages” provision, a private cause of action by which a plaintiff can seek double the amount that would otherwise be provided in the case of a “primary plan which fails to provide for primary payment.” See 42 U.S.C. § 1395y(b)(3)(A). In Netro v. GBMC, the Fourth Circuit considered whether a 37-day delay between entry of a judgment for medical malpractice and satisfaction of that judgment constitutes a failure to pay under the MSP.

Kathy Netro brought a medical malpractice suit against GBMC in Maryland state court following the death of her mother. Netro’s mother, a former patient at GBMC, suffered complications that resulted in partial paralysis after undergoing hip replacement surgery in 2011. She died two years later. Three weeks after winning a judgment in state court, Nero initiated a suit in federal court claiming that GBMC had failed to satisfy the state court judgment in violation of the MSP. GBMC paid the judgment in full 16 days after Netro filed the federal suit.

The United States District Court for the District of Maryland granted GBMC’s motion to dismiss, reasoning that the MSP did not require GBMC to pay Netro or reimburse Medicare immediately after the state court’s final judgment, and that GBMC’s eventual satisfaction of the judgment was sufficient to meet its obligations under the MSP. On appeal, the Fourth Circuit first considered whether Netro had experienced an injury such that she had standing to bring the suit. The court answered in the affirmative, concluding that GBMC’s failure to satisfy Netro’s judgment constituted an injury for purposes of her cause of action under the MSP.  Rejecting GBMC’s argument, the Fourth Circuit noted that Netro still experienced an injury in spite of the fact that the funds owed to her by GBMC would ultimately be provided to Medicare.

The court then proceeded to the issue of whether GBMC had “failed” to pay the judgment, which it considered to be a “simple matter of statutory construction.”  Relying on the plain text of the MSP, as well as the Black’s Law Dictionary definition of “to fail,” the Fourth Circuit concluded that there cannot be a failure to pay when there has been payment. It noted further that Netro’s argument would require the court to construe “failure” as equivalent to “unreasonable delay,” an interpretation that the court declined to adopt. The plain language of the statute convinced the Fourth Circuit that Congress did not intent to provide any specific deadline for payment under the MSP.