Opinion ID: 613077
Heading Depth: 4
Heading Rank: 5

Heading: Disposing of Central States' Remaining Arguments Regarding the Provision

Text: Central States makes three other arguments for its interpretation of the demonstrated responsibility provision, but none are persuasive. First, Central States argues that if we do not apply the provision in this case, we would render the provision surplusage. But that is plainly false: the demonstrated responsibility provision still applies in all instances where Medicare sues alleged tortfeasors for the reimbursement of medical expenses caused by the tortfeasors. Medicare cannot bring such a lawsuit until the alleged tortfeasor's responsibility to pay has been demonstrated. Second, Central States points to the word fails in the private cause of action, which provides for liability when a primary plan fails to [pay] in accordance with paragraphs (1) and (2)(A). See 42 U.S.C § 1395y(b)(3)(A). One cannot fail to pay, Central States argues, unless one has been told to do so and refused  in other words, unless one's responsibility to pay already has been demonstrated. Cf. Glover, 459 F.3d at 1309 (reasoning that it cannot be said that Defendants have `failed' to provide appropriate reimbursement until their responsibility has been demonstrated). But this argument stretches the word fails far beyond both its legal and common meanings. The most relevant definition in Ninth Edition of Black's Law Dictionary defines the verb to fail as to be deficient or unsuccessful; to fall short. Nowhere does this definition indicate that failing requires obstinacy, as Central States suggests. And in common usage, a student can fail an exam on his first attempt, just as a debtor can fail to make the first of many monthly payments. Third, Central States argues that the purpose of the demonstrated responsibility provision is to permit private insurers to contest their liability without the threat of double damages, which automatically apply under the private cause of action. In other words, Central States argues, the provision prevents the windfall recoveries that would accrue to private plaintiffs whenever a private insurer unsuccessfully contests its liability. But Central States provides no reason why Congress would seek to protect in this manner private insurers who violate the Act by shifting costs to Medicare. See Mason v. Am. Tobacco Co., 346 F.3d 36, 43 (2d Cir.2003) ([I]t is harsh to impose [Medicare Secondary Payer Act] liability against alleged tortfeasors, but it is not harsh to impose such liability against entities who renege upon a pre-existing contractual arrangement to provide healthcare coverage. That is, it is not harsh to use the statute to serve the purpose for which it was enacted.). Moreover, the double damages required by the Act's private cause of action are not a windfall to the private plaintiff; rather, as discussed below, the Act contemplates that Medicare will seek reimbursement out of that recovery, so the plaintiff most likely will keep only its half.