to protect medicare from making unnecessary expenses to protect the integrity of the medicare trust fund medicare does as the secondary payer ect does this in two ways it requires primary payor requires primary payers to pay on a primary basis and if they don't triggering medicare's conditional payments then they're subject to double they images i really don't think that that's controversial  argument presented by liberty mutual seems to me to turn the construction of the medicare secondary payer act on its head they seem to be saying that they're entitle to tell medicare or that a primary pa could simply say to medicare we're going to sit back and hold back our payments right now you make your conditional payments and but when you're done we will reimburse you and if they say that then there's no double d then seeming think that most difficult thing for me to figure out here is it's certainly not unusual to have a dispute between in a primary insurance company and an insured over whether or not the incident is covered right brooke so if an insurance company takes a position that something isn't covered in this case as i understand it they're saying the heart attack occurred before the accident you're saying the heart attack occurred as a result of the accident one would result in coverage one would would not right and the chance company has a right to dispute the extent of coverage right now you've used to didn't state court and they issued a declaration that said that they're claiming that this was excluded was wrong that they did oh that's right but if you're right in the way this works then anytime the insurance company exercises that right and turns out to a been wrong then they're liable not only for what they should have paid but they're liable for double something we don't know double what in connection with this other federal statute right yes i actually believe that's correct so it's really a strict liability statute if you're wrong on  claiming an exclusion if i think that's correct and you think that's what congress intended yes i do i think that the primer that they're doing that there are any other cases where this is happened we're primary and sure are our  it just seems like that there would that there would be one of these medicare secondary peer act claims in every single insurance dispute if your interpretation is correct and i'm just wondering i don't think there are so i'm just wondering why not well it seems to come up a fair number of times so i'm not sure maybe i misunderstand the question but i think that the statute whether you look at it how you call you look at it you know when medicare was first doing all this they were treated as a primary payer in the least insurance companies were relieved of payment entirely the secondary pyrrhic that was and then acted specifically to deal with th problem so what should the insurance company have done if it wanted to avoid the double liability it should have paid on a primary basis with when the bills were submitted regardless of whether all tamale it was held to be alive will it that's a risk it weeks ago they went to state court told the judge that they were going to be appealing that verdict in appealing all the determination of causation in appealing all that so as of right now they dispute a following up on judge morris question is you know we have a lot of claims where where there is a resident where where there is a reservation of rights but generally comes up as i understand it you agree to defend but you but you reserve your rights on whether you indemnify there isn't there isn't that mechanism for an insurance company to to utilize in a case like this where the provider is requesting payment you either pay him or you don't and if you're held not to be liable down the road as the as the primary pair the provider isn't going to pay him back they provided the services right correct and the beneficiaries not going to be collectable so the insurance company just out even though they didn't they didn't actually  cover the incident print what the reverse is is a similar dilemma in a way because what we've got here is providers being forced to eat medicare discounts in the non medicare kicks  let's talk about what may be required to do that let's talk about what another alternative is if a provider is the one that's making this claim i understand where the provider has standing to do that but i think it gets trickier in connection with the beneficiary i see how you you had standing to file a breach of contract claim and state court i get that you get a judgment and then afterwards you add the secondary payers act claim i get your argument that that relates back to when you first filed the complaint but you have to have standing for all of the different claims that you're making in the case so where does your client get standing what damages did your client incur in this instance because of the reef because because medicare paid the standing well first of all we're in the case because liberty mutual didn't pay the standing we get of a medicare paid in place in their place well medicare paid their place they're claiming yes they're claiming in the state court that medicare's pieman it's relieved the of six hundred seventy one thousand dollars of primary people so that's their argument state court yes a tell me what damage your client suffered here tell me what damages your client suffered here not because of the of the breach of contract but rather because of the fact that medicare paid in place of the primary insure how did that damage your client i regulation were required to go forward in pursue the claim for medicare this isn't some some choice ms duncan is required by reading regulation to do whatever necessary to get the pin with me but end to end to lead you to answer judge mckee question about what damage you suffered by virtue of medicare pain didn't is there not evidence in the record that liberty mutual case manager susan klein and the senior claims specialist barbara greig nollie both have statements that said that all the care that should be done should be what medicare would cover and that there should not be any additional treatment that was beyond what medicare would cover and that medicare covers lesser amounts than what private insurers might cover or medicare covers lesser treatment not just the amounts but medicare authorizes certain treatments and not other treatments this gentleman was in a long term coma type state and getting extensive treatment so query what kind of treatment would have been available absent medicare limitations as to treatment i believe the both the number of sessions and the amount of treatment medicare and i don't know the exact answer to that you know any answer i mean are you in other words what facts have you come forward here with here to say that because medicare paid instead of the primary insurers the standard of care was less the number of treatments were less the hospital still coming after your client for the balance i think there are any number of things that could happen that would give the beneficiary in a case like your standing but you didn't seem to plead any so i'm just trying to figure out what was what harm did your clients suffer because medicare paid instead of the insurance company my client has had to go through this protracted litigation simply because liberty mutual or primarily because liberty mutual is using medicare as a shield to primary people well let me let me ask him to send another thing that's another involved understood thing because that's another thing i don't understand what was the point of the state court lawsuit aside from setting up then this medicare secondary appears at claim later what was the point of it when medicare did pay for the care and his face so far as we can tell these from the record the care wasn't deficient and the hospital isn't coming back at your client to to recover the difference between the medicare rate and their charged rate so the point is the state court lawsuit is actually seeking payment regulation to go after that money what's the penalty when you say she's required what's what's the if she settles her case say say that she settles her case down below and it doesn't include the money that medicare paid medicare can still come after that settlement and that's the settlement that's going to be used to determine what medicare gets reimbursed so they're getting their money any way they come is duncan not from not from liberty mutual and she's out what money i don't understand where she's entitled to what money she entitled to that they would be taking well she's entitled to other damages in the cases of the damages in that case ok with science her damages but they take what theirs out of the settlement they're not required they're not limited to the amounts that were dedicated to them they don't actually get the satellite they would have to sue her to get the settlement you got from the insurance company will will will have to this done through will be liable yes if this is your breakup your theory of standing then is more this regulatory theory that we had to pursue this when we had to pursue it and you had to a file the claim you're  in trouble if you didn't file a claim but you have authority that says not only do you have to file a claim but you also had to file this declaratory judgment action is there are there cases that say that you also had to filed it's clear toward judgment you are not aware of a case that says we had to do that they're not aware of the cases says that would be required for standing either but you're saying then that that the medicare statute requires you know just to file a claim but to pursue a claim through all penalty for not following the regulation is things will play out your client will be liable to them in in this number recovery but she has in another fashion is duncan may have to pay out the money owed to medicare out of her own funds out of funds that have nothing to do with medical she what funds is she entitle to that that it would come from i'm just trying to see how she'd be harmed ok she's why i'm sorry but it doesn't seem fair that paying out of her pocket in liberty mutual but when you're off of it were to get what's in your pocket from other expenses other than the ones that were conditionally paid by medicare right medicare has has the right under the medicare secondary peers act medicare has the right to seek recovery from the primary churns company doesn't it if you're through direct action right and the provider has the right to make a claim against  the the primary carrier here and now you're saying that you did you have the right to make that claim because of this regulatory duty theory right good so do all it do all three then get some double digit doubling up damages of something if we didn't pursue this it pursue the claim improve the liability medicare would be doing nothing well let's go to that effort just a segue because one of the thing that i think is fascinating about the facts of this case is medicare at least initially said they weren't seeking anything they didn't what they didn't seek recovery from the primary insurance company so it seems hard to me to hold the primary insurance company responsible for not having paid primarily when medicare paid and said they didn't have a claim against the the primary carrier so what significance if any does that fact have what happened is in four medicare sense not true and medicare corrected itself medicare and corrected itself i thought after after liberty went back to them and said they'd lost the state court claim and now they are primary and they do a well is that right right they actually reversed themselves or held off after being informed that there was a dispute about this so did you say that liberty is filing has filed an appeal of the state court judgment made no they went to there was so actually since the briefing in this there was another they filed another case in federal court trying to force medicare to do a direct action time frame that they have to appeal the court that case so that's a partial summary judgment partial judgment that occurred there that was as to causation they still have to get to the amount of damages  so in other words the state court action that you're promising this odd to say that that liberty mutual was liable is not a final judgment liberty we contend liberty mutual's responsible right i don't just mean i know you contend that but le follow it follow with me for just a second here if if liberty mutual isn't liable then they work primary and you don't have a claim under the secondary payers act right if they weren't lot they have the right  they weren't liable they'd you don't have a secondary payers act claim is that right or is that wrong that's correct ok now what you're promising this whole lawsuit here it seems to me is this state court judgment on the breach of contract claim under which the state court said that liberty mutual was liable so therefore they'd be primary my rights are yes but what i didn't understand is now apparently that's not even a final judgment that's correct so how do you pursue and win this secondary payers act claim and tell somebody this court the district court the state court the state court of appeals i don't know somebody makes what then becomes a final judgment on whether there was or wasn't coverage under this policy well then i think you're right we have to continue that fight is done to him is to continue that fight which is why she should be entitled to double dearman just down the road we're not saying that a whole claim seems to me has yet to be definitively decided by any court will the the reason is because we had if you look timeline to appeal so this case was brought out to the district court  how did it get in the district court it was removed on the basis of the medicare secondary period and what was removed the entire case whole case the whole case was removed but then after deciding to dismiss this claim sense for the district judge to have deferred then action on the secondary payers act claim i know he dismissed your claim but should he have actually waited to see what happened to the state court claim yes so are are you are you would you be satisfied here and now i'm really threatened by accident would you be satisfied here if this went back to the district court with instructions to to anything for the judge i think it needs to go back to the district court i don't think the district court could make a determination of damages without state court action if that's what you're asking but i wasn't really asking that but normally we wouldn't have we would be hearing this this life villainy aspect of it before the damage decision was reached to do it all at once and it seems to me they can't do that until you get the state court action that's correct the case as was an already complicated enough listening to the questioning from the court it seems the court has very good handle on the actual facts even though they're very complex in this situation but to pare it down what we contend is the real central issue is liberty mutual a no fault insurer receives a claim and from mr duncan a damp point in time had not yet expired immediately no medicare under section want to levon of the m s p act a requirement of insurers now to report claims that come in dealing with the medicare beneficiary right up front i think it was within three days it's part of the record of receiving that claim medicare is alerted to the flip the fact that a medicare beneficiary is seeking to recover benefits from what might be a primary insurer liberty mutual in that setting c m s under the regulations i believe it's for eleven down to four can pursue liberty mutual directly to try and recover their reimbursement if there is any in medicare through their procedures followed their procedures to pursue an insurer and see if they are a primary payer and if reimbursement is owed and comes up with what's called the conditional payment letter and that's been referenced in pleadings before the court and i think even judge friedman up in the district court had addressed conditional payment letters liberty mutual gets a conditional payment letters under the regulations through the emma's peace statute liberty mutual has the opportunity to challenge the amounts that are listed by medicare the medicare believes are related to that accident liberty mutual takes advantage of those regulations i don't mean that in a negative connotation could challenge those conditional payments even though you were taking the position at that time that you did not cover this accident exactly and we we in the state court mr duncan's claim and now the estates claim we said coverage is not available here you couldn't you couldn't challenge the fact that he was getting nursing care or he was getting oxygen treatments or whatever we want to make up the basis we challenge not only the state claims from mr duncan but also medicare under the proper regulations because we had information in the investigation after a while it appeared there was no causation is judge mchugh you pointed out to us the information and evidence we had as liberty mutual was that the heart attack occurred and caused the accident in which case there is no contract of insurance so you could challenge the coverage yea or nay he's covered by the liberty mutual policy but what could you insert yourself into the kind of care that he was getting from the providers that medicare was paying for i don't believe so we can't and in fact they should what medicare right enter cannot pay and we cannot say that we're not going to pay because medicare will pay and i think that was address  care that should be given to duncan should be consistent with a lower threshold of medicare reimbursable care then a higher threshold that somebody who was bill gates would be getting to be honest your honor i did not go back and look at those statements by those two claims representatives who handled it early on but my understanding even at that point liberty mutual was disputing this you're saying all along we don't know anything but by the way they actually direct what is or is not provided as medical care to a doctor and say you can't do this or hospital you can't do this they might be able to say we're disputing you know whatever medicare is going in they're going to say you can't do it they're going to say if you do it we're not going to pay that's right we're not we don't believe there is causation we're not responsible for your bill if you've got medicare involved but cutting to the chase why was not the decision of the district court and one that we might give essential an advisory opinion here when we don't yet know whether liberty's response of whether liberty provided coverage here because that proceedings not done when liberty mutual is known of an interesting position because as the court knows and dealing directly with medicare medicare made its federal decision that on the evidence that they had in what they looked into the amount of conditional payments was iraq that was the law of our case below even before the secondary pair claim was made double damages that claim came and after the jury trial on a causation was this was any of the injury related to the automobile accident the jury said yes that was the only issue in that trial and then you removed the case to federal court we reported immediately to medicare that the jury verdict decision on the merits was different than what medicare determined when saying zero and at that point we said are you going to change your position on this case do we need to deal with you again in your direct recovery claims after that there's one plaintiff amended their complaint to say hey we're now owed double damages because the jury made that determination liberty mutual already stepped up and told medicare hey this determination that i'm damages and then am i correct i'm just filling in gaps here am i correct then that the district judge then sent the state claims back to the state court is that what happened around the district judge dismissed the n s p claims sent the state no fall claims back the state no folk lames damages or deal with well they're claiming loss of employment survivor benefits you know this there's other state law damages and no fault and that's why plenty of broad he could he could only send those back because he had decided the federal claim was not viable there is no more federal question so they were primary according to the state court so i mean that makes some some sort of logical sense but in reality it is so so he doesn't care because of that outcome whether or not libert was very specific were with me when it was about it seems to me we have to care whether ultimately liberty is primary or not because if liberty turns out not to be primary th even year your fellow council concedes there's not a legitimate secondary pairs ackley correct so why wouldn't anything we did then in this instance be basically an advisory opinion that says well if this happens this is resolved and if this happens  not that's not normally what we do it under the scenario that we're presently in liberty mutual has dealt directly with medicare i told judge friedman based upon liberty mutual statement that we are accepting the responsibility to reimburse medicaid here reimbursed medicare as a matter of fact we just find that because of that injunctive completely failed in detroit we did get a final demand letter last week from medicare and payment was submitted last week but you're appealing you're going to appeal the state court judgment you know there are going to be appeals regarding the relationship of other damages that are permitted under no fault  appealing the question of whether this accident was covered under the policy the causation no my understanding is there's no argument we have no challenge to the trial and  and all this discussion i've been having is irrelevant that's final then as far as you're concerned causation verdict yes but how do you act no offense to you but how can we rely on that until that state court case is finished we had the yeah your understanding i'm not a fit trying to offend you in any way but not if normally parties change their views as to what they're going to do because of various events so should we stay this appeal until there is a final judgment in the state court that has not been appealed the federal issue deals with double d images there is no double damage claim remaining in state court at this point that suppose suppose you hypothetically appealed the causation issue among others to the state court of appeals and they said hey liberty mutual's view of the policy is the correct one they should never have been held liable by the jury in the trial court in the state court so hypothetically you could win and then this whole case would disappear it was a very good to a very clean trial hypothetically i suppose that is an out of their time to appeal run no because there is no final dollar judgment in state court for any of the nor for damages and that's why we're here are dealing with is there a double damage claim which is a federal question and if there is not as judge friedman recognized we dealt with medicare directly in medicare pursued their direct recovery from us what did you concede before judge friedman that you were liable causation wise and therefore you were primary in gardasil what happens further regulations for eleven the two for it specifically states that even if we pay the plaintiff on a judgment we still have to pay medicare and if medicare is pursuing that direct right of recovery action against us liberty mutual we have to pay medicare like the final demand that came in last week we are now obligated to pay that because we agree with it but the provider presumably could also sue you for the difference between the medicare rate and the charged rate on the underlying claims that there are hundred vs six hundred yeah there are some issues in michigan that make that in a political in this case that a provider key and not do that in this case under does except of the medicare your fellow counsel says he filed that state court claim even though medicare had paid the provider because he was obligated to do so under medicare regulations what is your position on that the  regulation that was referenced is for eleven done five one and they don't quite cite the regulation accurately the regulation requires them to take the steps necessary basically to protect the claim they reported the claim to liberty mutual liberty mutual opened up the case file on it started addressing it medicare cannot make a payment on behalf of the no fault beneficiary until they have taken the steps if they did not take that step and report the claim and start make their claim against no fault initially the medicare will not pay that is honest this is what they have to do all that does the regulation only require them to file a valid claim or do they then also have to take all other action including suing in state court which is essentially what mr jonas say yet there is nothing in any regulation or the statute that says that they have to file in the legal action against the carrier in order to comply with their obligation to report their claim and initiate it but there are there any cases i have a foundation your honor and what i do they have to do that under your theory which you say is supported by attorneys report if they get a claim and dealing with medicare beneficiary they do not it's not a mandatory thing for them to report to medicare not in the reg it's not in the regs regs instead he does say that the insurer has to report but but there were other reasons to file the state court action in addition to getting payment to pay off the provider that was essentially fronted by medicare there are other claims under the policy that you had been disputing in addition to paying for this for the for care right i don't know lost wages whatever whatever they might have been so there was a basis to go to court for that yes separate and distinct from medicare yes a hero to pursue their claim under no fault because coverage next i see my time's expired your honour's and finish your sentence here because they had to pursue their medicaid because what you said because because there was a dispute of coverage that there was no contract of insurance is the liberty mutual's position based upon their causation they had to file their suit in state court to address that issue separate and distinct of medicare medicare what didn't come up till after the jury and really what is your position as to whether the duncan a state has been damaged by the fact of conditional payment by medicare as opposed to whether they've been damaged by your wrongful refusal to admit to pay whatever it is under the policy is there any damages that you know of that they've suffered because medicare paid first i don't i have not seen any i haven't heard any alleged and i can't find any cases that give that type of damage where medicare is taking care of it and particularly where insurers dealing with medicare rather than leaving it to the pla clarify just for one moment what are the additional damages that are possible under this no for policy this is that's what was addressed in a summary disposition at the state court three weeks  ago there were claims for survivor benefits and i'm not going to argue why they're not a plan i'm just asking what the driver benefits there were some attendant care benefits i think i don't deal with no phone i deal with medicare because someone else argued the other side of it wage loss was an issue and there were two others at the state court said no you're not going to get on it and there's interest and penalties interest yes no well a lot of that is news to me but one of the points that was made i think is what was news that there's been a final demand letter i'm i'm not aware of a final demand letter that there's been a payment i'm not aware of a payment they go together yes i mean the one follow one precipitates the other is that right correct but there's not in my experience you don't get a final demand letter from medicare till there's a judgment or settlement in the case and they will send recovery letters along the way that say here's some money that you owe us please send us this modern money that's not a fountain you command let's see if any of these things that happened before you came here part check to see if these things had occurred before you came i'm not aware of i know you're not understanding liberty mutual saying they got a final demand letter i'm not aware of getting the final demand letter so the demand letter comes from medicare to an insurance company or does it come to be should come to bali it should come to both and you haven't received i  but and of course we're talking about exxon a regular you know the state court counsel received i'm sorry that we're talking about things that are not technically in the record better informative and i would say you're both officers of the court in terms  representing what's what's going out so suppose hypothetically that liberty has paid medicare the full amount that medicare has already paid on your client's be half what remains now what is there in the injury that you saw i believe we're still intitled to the double d images and watching because we're the ones have brought liberty mutual to the point of making them pay it we did it we did all the work there is no direct action by medicare by the government in this case is no they have the right the big the direct action there isn't one libert process after a settlement or judgment that they go through to calculate their final dimmy and they will give you then till the societal demand is what you're referring to you know let's assume for a second that medicare is named now made a final demand and that they paid ok so how did you having sued them over the coverage precipitate that if we didn't sue them medicare wouldn't be getting paid they'd how do we know that because because medicare said they would accept zero at one point in time we had to correct them ok so as soon than that they sent the demand and liberty still persisted in refusing to pay then are you saying that medicare can't sue liberty to collect what they've conditionally paid medicare could sue certainly could sue but the whole point of the private right of action is to alleviate medicare from that responsibility so that we're not really using their resources to do that but the problem their potential problem and i don't know the answer t is that if this was a key tam case then i think your theory would be right because you don't have to show when you're in forcing one of the government interests that you were damage but the case law is clear that this is not ke so it just seems like they're asked to be standing well as all their patients say that there always has to be standing and it seems like in order for there to be standing you have to have been damaged and that's where i went back earlier to say what are your damages not from the breach of contract but rather from the fact that medicare it vance the money in it on behalf of the primary insurance company in think once again the problem is they've said to the state court there are six hundred seventy one thousand dollars of bills because medicare paid two hundred twenty five thousand in condition will payments we don't know anything ok and then said there we agree that we need to reimburse medicare they just said because medicare me he's not addressing my family think how we your dad how your client is damaged an example would be medicare only paid two hundred the damage the coverage is six hundred the hospital still looking to us for the difference is anybody making claims against the state here that that that would allow us to see where these damages are both the daily desire there are claims against the state that i'm aware of but for example in the state court right now there's a dispute about mclaren which is one of the health systems in their bills and who has the right to go forward with that councilman mentioned the state court case coming up that all goes back to the breach of contract claim that that though those claims are not based upon the fact that medicare advanced payments but you are distinguishing provider clean saloon while ago and under his skin low right now we have to go forward with the provider cl what do you mean you have to go for undercover versus state farm the providers do not have a direct right of action against liberty mutual but that if the new things we have to go concern that we have is your standing to raise the claim that the double damages under medicare if you haven't been damaged they're using the to try to walk away from liability that we have that we're pursuing i think that's pretty clear used you start to say liability that we have to the cover but we have that's not assume it's not the end of your sentence that you have to pursue they have to walk away from liability that we so we're suing for what's called law with expenses it's either way we think we have to make the providers whole if we get allowable expenses in state court we think we have to medicare matter that's religion that's a breach of contract law correct but they're using medicare they're saying we don't have to pay any of those bills because medicare conditionally paid them i didn't understand that at all i thought all that they were saying is we're not going to pay the provider bill because medicare already settled on that and the in the provider accepted it and then you're also saying the provider once a provider accepts that medicare payment they can't come back against anybody for the state or the insurance company or anybody else it depends on the context but i believe about this in this in this case i believe that that under michigan wall they if they've accepted an  amount that they can't ask for more than a move ok so you can't be vindicating medicare's interest to reimburse to get reimbursed for these other payments because medicare was an obligated to pay those those are just things  contract we're only talking about the provider paying so the her getting back to the question what's the harm that's gives you standing to bring this federal claim moves duncan remains liable to medicare whether or not she recovers the minack you're from stealing the mutual what it what does she owe medicare if liberty does in fact reimburse everything that medicare is claiming i don't know the answer to that question right now but we don't ever know the answer to that question until liberty or until medicare makes a go through the whole settlement resolution it just seems like you're saying that well duncan's a state might have a might have damages if liberty hasn't reimbursed medicare every everything that medicare is claiming it's all made and that may be true in the future but as of today what's the claim i still don't understand how we could create this in a situation where the insured to use medicare to reduce its contractual  but i know you don't like it no you don't like the questions but there are reasons why legally we're asking you the questions and either you have an answer whether you like it or not either you have an answer that yes these are the damages that are concrete and particularize not speculative or you don't and earlier in our inquiries i asked do you have a claim that mr duncan received lesser care because he was being covered by medicare than he would have been if he was being covered under the liberty insurance policy and i don't know the answer to that question as i stand here today but assuming that you a complicated situation and so we appreciate your efforts on both sides and if it is speaking for myself if there is a point in staying on this federal appeal and the two of you wanted to file letter briefs on that issue since that was not in the briefing as i recall we would accept letter briefs on the question of staying the federal appeal that would be no more than ten pages and that would be filed within ten days and  no we're asking i am i am asking you as the presiding judge that if you would like to file a letter briefs on the topic of whether the federal appeals should be stayed because of the discussion that we've had we would accept letter briefs from each of you within ten days no more than ten pages on that topic if you don't think there's any point in staying a don't do it or you could say no stay or yesterday or this is a crazy idea but i would say if we don't hear from