United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
July 7, 2003
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
__________________________ Clerk
No. 02-10198
__________________________
TOMMY THOMPSON, SECRETARY,
DEPARTMENT OF HEALTH & HUMAN SERVICES,
Plaintiff-Appellant,
v.
STEPHEN GOETZMANN; ET AL.,
Defendants,
STEPHEN GOETZMANN; BERNICE LOFTIN;
ZIMMER, INC.,
Defendants-Appellees.
___________________________________________________
Appeal from the United States District Court
for the Northen District of Texas
___________________________________________________
ON PETITION FOR REHEARING EN BANC
(Opinion December 17, 2002, 5th Cir. 2002, ___F.3d___)
Before JOLLY, DUHÉ, and WIENER, Circuit Judges.
PER CURIAM:
On petition for rehearing, we amend our opinion by deleting
Part B.4, titled “Zimmer Cannot Pay for Medical Services
‘Promptly,’ and Thereby Fails the MSP Statute’s Requirement for a
‘Self-Insurance Plan,’” in its entirety, and deleting, in Part B.2,
the italicized portion of the following sentence: “Although we
agree with the district court’s determination that Zimmer is not
liable under the MSP statute because it could not be reasonably
expected to pay ‘promptly’ for Loftin’s medical care, we also agree
with the other district courts that have concluded that an alleged
tortfeasor who settles with a plaintiff is not, ipso facto, a
‘self-insurer’ under the MSP statute.”
These withdrawn portions of the opinion addressed the holding
of the district court that the tort settlement —— the ad hoc
settlement agreement entered into between Zimmer and Loftin in the
course of Loftin’s products-liability lawsuit against Zimmer ——
from which the government was seeking reimbursement under the MSP
statute was not a “self-insurance plan” within the meaning of §
1395y(b)(2)(A)(ii), because the purported self-insurance plan could
not have been expected to “pay promptly” for Loftin’s healthcare
services. As that part of the opinion was an alternative holding,
our withdrawal of these portions of the opinion does not affect the
central holding of our decision that the government lacked
authority under the MSP statute to seek reimbursement from the
Zimmer.
Notwithstanding the foregoing withdrawals, we remain convinced
that the plain language of the MSP statute makes the reasonable
expectation of a prompt payment a requirement for the government’s
collection from those “primary plans” listed in §
1395y(b)(2)(A)(ii), including a self-insurance plan. In short,
under the language of § 1395y(b)(2)(B)(i), which expressly cross-
references § 1395y(b)(2)(A)(i)-(ii), absent an expectation of
2
prompt payment, the government has no cause of action to collect
from a “self-insured plan,” or from any of the other primary plans
enumerated in § 1395y(b)(2)(A)(ii).
As a result of arguments made for the first time in the
government’s petition for rehearing, however, we concede that it is
arguable that this plain language of the statute produces an absurd
result: The MSP statute seeks to cast Medicare as the secondary
payer in virtually all situations in which there is any other
insurance, providing a cause of action for reimbursement to
Medicare from such insurance funds and allowing the government to
intervene in litigation between the beneficiary and the primary
insurer when the primary insurer is disputing the beneficiary’s
claim. Yet, at the same time, the plain language of this statute
requires a reasonable expectation of prompt payment from the
primary insurer. As a practical matter, this requirement precludes
the right to reimbursement from any disputed or potentially
disputed funds. Furthermore, the plain language of the MSP statute
permits a reimbursement action with respect to the “primary plans”
enumerated in § 1395y(b)(2)(A)(ii) only in situations in which
Medicare usually would not make conditional payments, that is, when
it is reasonably expected for “payment . . . to be made promptly”
by the “primary plan.”
Because our holding with regard to the prompt payment
requirement was an alternative holding, and because there is no
3
necessity for us to grapple with whether the arguably absurd
results may somehow militate against enforcing the plain language
of the statute, we delete the above-noted portions of the opinion.
In all other respects, the opinion remains unchanged.
Finally, we reiterate that the courts are not in the business
of amending legislation. If the plain language of the MSP statute
produces the legislatively unintended result claimed by the
government, the government’s complaint should be addressed to
Congress, not to the courts, for such revision as Congress may deem
warranted, if any.
Except as provided in this order, the petition for rehearing
and the petition for rehearing en banc are DENIED. This court’s
opinion, 315 F.3d 457 (5th Cir. 2002), is hereby withdrawn, and the
following opinion is substituted:
Plaintiff-Appellant Tommy Thompson, Secretary of the United
States Department of Health & Human Services (“government”) appeals
from the district court’s dismissal of complaints against (1)
Defendant-Appellee Zimmer, Inc. (“Zimmer”), pursuant to FED. R. CIV.
P. 12(b)(6), and (2) Defendant-Appellee Bernice Loftin and her
attorney, Defendant-Appellee Stephen Goetzmann, by summary judgment
in their favor. The government had filed suit against all three
Defendants-Appellees, seeking reimbursement for Medicare
expenditures related to Loftin’s medical treatment. This was the
same treatment that was the genesis of Loftin’s retaining Goetzmann
4
to sue Zimmer, the manufacturer of her artificial hip prosthesis,
which suit was settled prior to trial. Concluding that the
government’s complaint is without any basis in law and that there
is no legal right of recovery against these three parties, we
affirm the district court’s dismissal of the government’s action.
I. FACTS & PROCEEDINGS
In June 1993, Loftin underwent surgery to replace her hip
joint with a prosthesis manufactured by Zimmer. That procedure was
paid for by the government through the Medicare program.
Complications arose, requiring Loftin to undergo a second surgery.
Thereafter, Loftin continued to experience medical problems related
to her hip prosthesis. Medicare paid approximately $143,881.82 for
Loftin’s two surgeries and subsequent medical treatment.
Representing Loftin, Goetzmann filed suit against Zimmer for
products liability, alleging defective design of the hip
prosthesis. Lofitn’s claims included the medical expenses paid for
by Medicare. Loftin and Zimmer settled in lieu of going to trial.
Without admitting liability, Zimmer paid Loftin the unitemized lump
sum of $256,000. Zimmer disbursed the full amount of the
settlement to Goetzmann, who, after deducting his 40% contingency
fee, distributed the balance to Loftin. The entire settlement was
paid by Zimmer; no part was paid from insurance.
In October 2000, the government filed suit against Goetzmann,
Loftin, and Zimmer under the Medicare Secondary Provider (“MSP”)
5
statute,1 which authorizes the government to seek reimbursement
from entities providing primary insurance coverage for medical
services previously paid by Medicare. Among other things, the MSP
statute authorizes the government to obtain reimbursement from a
firm or entity that has a “self-insurance plan.”2
The government alleged that Zimmer was “self-insured for its
liability to Loftin,” which, as a putative tortfeasor settling
Loftin’s products-liability action against it, had paid Loftin a
substantial sum of money. This payment, insisted the government,
was ostensibly for Loftin’s medical expenses, which were originally
paid for by the Medicare program. Claiming entitlement to relief
under the MSP statute and its implementing regulations, the
government sought reimbursement from Goetzmann and Loftin, and
double damages from Zimmer.
Zimmer moved to dismiss the government’s complaint against it
under Rule 12(b)(6) for failure to state a claim on which relief
could be granted. Zimmer asserted that its tort settlement with
Loftin was not tantamount to maintaining a “self-insurance plan,”
as defined in the MSP statute. Zimmer argued, in the alternative,
that its inability to pay for Loftin’s medical services “promptly,”
as required by the MSP statute, precluded it from meeting the
definition of a “self-insured plan.” The district court declined
1
42 U.S.C. § 1395y(b) (2002).
2
§ 1395y(b)(2)(A)(ii).
6
to determine, on a motion to dismiss, whether Zimmer’s settlement
agreement with Loftin met the statutory definition of a “self-
insured plan.” The district court nonetheless ordered the
government’s complaint dismissed, holding that, as a matter of law,
Zimmer could not have paid for Loftin’s medical services
“promptly,” as required by the MSP statute.
Goetzmann and Loftin subsequently moved for summary judgment,
arguing that they were not required to reimburse Medicare because
they did not receive payment from an insurer or self-insured
entity. Agreeing with Goetzmann and Loftin that the MSP statute
predicates their reimbursement liability on their receipt of
payment from, inter alia, a self-insurance plan that would pay
“promptly” for medical services, the district court granted summary
judgment to both Goetzmann and Loftin. The government timely filed
a notice of appeal from the court’s dismissals of Zimmer,
Goetzmann, and Loftin.
II. ANALYSIS
A. Background.
Although the government has litigated similar cases in several
district courts around the country, we are the first appellate
court to address the issue of an alleged tortfeasor’s reimbursement
liability under the MSP statute. Notably, the government’s prior
7
efforts have proved uniformly feckless —— every court that has
heard its arguments on this issue, including the district court in
the instant case, has rejected the government’s expansive
interpretation of the MSP statute.
In this case, the government retreads the same unsuccessful
arguments that it has advanced in these prior cases. As we
conclude that the statutory analyses performed by the district
courts in the prior cases are sound, that the law has not changed,
and that the government has not adduced any new facts that require
us to reconsider the meaning or scope of the MSP statute, we affirm
the district court’s decision in this case. We shall first discuss
the government’s claims against Zimmer, because the liability of
Goetzmann and Loftin is predicated on determining whether Zimmer
qualifies as having a “self-insured plan” under the MSP statute.
B. Zimmer’s Reimbursement Liability Under the MSP Statute.
1. Standard of Review.
A district court’s order dismissing a complaint under Rule
12(b)(6) is reviewed de novo.3 On appeal, we must liberally
construe the complaint and assume that all facts pleaded therein
are true,4 keeping in mind that such dismissals of complaints are
3
Lowrey v. Tex. A&M Univ. Sys., 117 F.3d 242, 246 (5th Cir.
1997).
4
Id. at 247 (citing Campbell v. Wells Fargo Bank, 781 F.2d
440, 442 (5th Cir. 1986)).
8
“viewed with disfavor.”5 We must also remain mindful of the
Supreme Court’s injunction that a Rule 12(b)(6) motion should not
be granted “unless it appears beyond doubt that the plaintiff can
prove no set of facts in support of his claim that would entitle
him to relief.”6
2. Zimmer’s Settlement Agreement with Loftin is Not a “Self-
Insurance Plan” Under the MSP Statute.
The government contends that Zimmer is liable for reimbursing
the government’s Medicare expenditures by virtue of Zimmer’s having
a “self-insurance plan” because Zimmer was “required or
responsible” to make healthcare-related payments to Loftin, a
Medicare recipient. The government’s argument for holding Zimmer
liable under the MSP statute is relatively straightforward: (1) The
legislative history reflects that the purpose of the MSP is to
reduce Medicare expenditures, (2) the statute achieves this purpose
by requiring reimbursement of payments from any “self-insurance
plan,”7 (3) an entity is “self-insured” if it is “required or
responsible” for making payments to a Medicare recipient,8 and (4)
the MSP statute provides a right of recovery to the government in
seeking reimbursement from such “self-insurance plans” that have
5
Kaiser Aluminum & Chem. Sales v. Avondale Shipyards, 677
F.2d 1045, 1050 (5th Cir. 1982).
6
Conley v. Gibson, 355 U.S. 41, 45-46 (1957).
7
§ 1395y(b)(2)(A)(ii).
8
§ 1395y(b)(2)(B)(ii).
9
paid monies to Medicare recipients.9 In this case, the “self-
insurance plan” is alleged by the government to exist by virtue of
Zimmer’s payment to Medicare recipient Loftin under the terms of
their products-liability settlement agreement. Thus, the
government concludes, Zimmer (as well as Goetzmann and Loftin) must
reimburse the government for its Medicare expenditures because this
is in accord with the legislative intent underlying the MSP
statute.
In assessing whether the MSP statute applies to Zimmer’s
settlement agreement with Loftin, we must start with the actual
words of the MSP statute,10 for it is the words of the statute that
set the metes and bounds of the authority granted by Congress.11
Thus, we need not —— and, indeed, should not —— look to legislative
history when the statute is clear on its face. When “the language
of the federal statute is plain and unambiguous, it begins and ends
our enquiry.”12
The terms and structure of the MSP statute aptly reflect its
9
Id.
10
Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997)
(recognizing that the “first step in interpreting a statute is to
determine whether the language at issue has a plain and unambiguous
meaning”).
11
Blue Cross & Blue Shield of Tex. v. Shalala, 995 F.2d 70,
73 (5th Cir. 1993) (noting that the words of a statute reflect the
intention of Congress, and “Congress’s intention is the law and
must be followed”).
12
United States v. Osborne, 262 F.3d 486, 490 (5th Cir. 2001).
10
general purpose. In enacting this law, Congress laudably sought to
reduce Medicare costs by making the government a secondary provider
of medical insurance coverage when a Medicare recipient has other
sources of primary insurance coverage.13 The MSP statute states,
in pertinent part, that:
Payment under [the Medicare program] may not be made . . .
with respect to any item or service to the extent that
(i) payment has been made, or can reasonably be
expected to be made, . . . as required [under a
group health plan], or
(ii) payment has been made or can reasonably be expected
to be made promptly (as determined in accordance
with regulations) under a workmen’s compensation
law or plan of the United States or a State or
under an automobile or liability insurance policy
or plan (including a self-insurance plan) or under
no fault insurance.
In this subsection, the term “primary plan” means a group
health plan or large group health plan, to the extent that
clause (i) applies, and a workman’s compensation law or plan,
an automobile or liability insurance policy or plan (including
a self-insured plan) or no fault insurance, to the extent that
clause (ii) applies.14
The MSP statute also authorizes the government to make conditional
healthcare payments when a Medicare recipient already has coverage
provided by a primary insurance plan; and the government has a
right of action in reimbursement to recover these conditional
healthcare payments from such primary plans:
13
Blue Cross & Blue Shield of Tex., 995 F.2d at 70-73. See
also In re Silicone Gel Breast Implants Prods. Liab. Litig., 174 F.
Supp. 2d 1242, 1250 (N.D. Ala. 2001) (summarizing the purpose and
structure of the MSP statute).
14
§ 1395y(b)(2)(A) (emphasis added).
11
(i) Primary Plans
Any payment under this subchapter . . . shall be conditioned
on reimbursement to the appropriate Trust Fund established by
this subchapter when notice or other information is received
that payment for such item or service has been or could be
made under such subparagraph. . . .
(ii) Action by United States
In order to recover payment under this subchapter for such an
item or service, the United States may bring an action against
any entity which is required or responsible (directly, as a
third-party administrator, or otherwise) to make payment with
respect so such item or service (or any portion thereof) under
a primary plan . . ., or against any other entity (including
any physician or provider) that has received payment from that
entity with respect to the item or service, and may join or
intervene in any action related to the events that gave rise
to the need for the item or service. . . .15
Thus, the structure of the MSP statute is relatively simple.
If a Medicare recipient has medical insurance provided through a
“primary plan,” then Medicare is precluded from paying for medical
services except to provide secondary coverage. Stated differently,
Medicare serves as a back-up insurance plan to cover that which is
not paid for by a primary insurance plan.
A “primary plan” is defined as a group health insurance plan,
or as any another type of insurance plan, such as workman’s
compensation, liability insurance, or a self-insurance plan, that
may reasonably be expected to pay for services promptly.
“Promptly” is defined by the Health Care Financing Administration
(“HCFA”) regulations as payment within 120 days after the earlier
of (1) the date the claim is filed, or (2) the date the service was
15
§ 1395y(b)(2)(B) (emphasis added).
12
provided or the patient was discharged from the hospital.16 If the
Medicare program chooses to make conditional payments when a
Medicare recipient has coverage under a primary plan, then the
government may seek reimbursement for these payments by suing the
insurance entities that provide the primary coverage.
To entice us to consider the lengthy and abstruse legislative
history of the MSP statute, the government urges us to agree with
it that the statute is ambiguous; however, we decline to find
ambiguity where none exists.17 As ably pointed out by Zimmer and
amici curiae, the term “self-insurance plan,” as used in the MSP
statute, is not only clear in its meaning; it plainly does not
apply automatically to alleged tortfeasors, such as Zimmer, who
settle with plaintiffs. We also agree with the other district
courts that have concluded that an alleged tortfeasor who settles
with a plaintiff is not, ipso facto, a “self-insurer” under the MSP
statute. We are compelled to draw this conclusion when we apply
several well-established canons of statutory interpretation.
First, the term “self-insurance plan” does not exist in a
vacuum within the MSP statute. Rather, it is predicated on the
term “primary plan.” As the MSP statute plainly provides, Medicare
16
42 C.F.R. § 411.50(b).
17
A prior district court also rejected the government’s
attempt to rely upon the MSP statute’s legislative history, noting
then that the “legislative history of the MSP Statute is cryptic
and uninformative on the interpretative question now raised.”
Mason v. American Tobacco Co., 212 F. Supp. 2d 88, 93 (E.D. N.Y.
2002).
13
is a secondary provider of insurance if and only if a Medicare
recipient has another source of medical coverage under a “primary
plan.” The term “primary plan” is pivotal to the applicability of
the MSP statute —— its reimbursement provisions are not triggered
unless a Medicare recipient’s source of recovery meets the
definition of “primary plan,” regardless of whether that source is
a group healthcare plan, workman’s compensation, liability
insurance, or a self-insurance plan.
The government asks us to accept its interpretation of “self-
insurance plan” without reference to the more fundamental
requirement of the MSP statute that this type of insurance plan
constitute a “primary plan.” To do so would violate the most basic
principle of statutory construction: Unless indicated otherwise in
a statute, its words are to be given their ordinary meaning, which
“cannot be determined in isolation, but must be drawn from the
context in which [they are] used.”18 This maxim is particularly
apposite here because the MSP statute does not define the term
“self-insurance plan”; neither does it define a “primary plan”
beyond listing some examples of various types of plans that are
deemed primary.
We must, accordingly, look to the ordinary meaning of these
terms.19 A “plan” denotes “a method for achieving an end” or “a
18
United States v. Lyckman, 235 F.3d 234, 238 (5th Cir. 2001).
19
See INS v. Phinpathya, 464 U.S. 183, 189 (1984) (noting that
“in all cases involving statutory construction, our starting point
14
detailed formulation of a program of action.”20 “An insurer is the
party to a contract of insurance who assumes the risk and
undertakes to indemnify the insured, or pay a certain sum on the
happening of a specified contingency.”21 Therefore, in the sense
used in the MSP statute, a “primary plan” of “self-insurance”
requires an entity’s ex ante adoption, for itself, of an
arrangement for (1) a source of funds and (2) procedures for
disbursing these funds when claims are made against the entity.22
Recognizing that “[t]he term ‘self-insurance’ had no precise legal
meaning,” a leading insurance treatise nonetheless confirms this
definition of “self-insurance,” noting that
must be the language employed by Congress, . . . and we assume that
the legislative purpose is expressed by the ordinary meaning of the
words used”) (quotations and citations omitted); White v. Black,
190 F.3d 366, 368 (5th Cir. 1999) (“The canons of statutory
construction dictate that when construing a statute, the court
should give words their ordinary meaning and should not render as
meaningless the language of the statute.”) (citation omitted).
20
Webster’s Ninth New Collegiate Dictionary 898 (Merrian-
Webster 1985). Dictionaries are a principal source for
ascertaining the ordinary meaning of statutory language, see
generally Babbitt v. Sweet Home Chapter of Communities for a Great
Oregon, 515 U.S. 687 (1995) (invoking dictionaries by both the
majority and the dissent in defining terms in the Endangered
Species Act).
21
3 COUCH ON INSURANCE 39:1 (3d 2002).
22
See In re Orthopedic Bone Screw Prods. Liab. Litig., 202
F.R.D. 154, 166 (E.D. Penn. 2001) (noting that a “‘plan’ connotes
some type of formal arrangement . . . to set aside funds to cover
potential future liabilities and a formal procedure for processing
claims made against that fund”); In re Diet Drugs, 2001 WL 283163,
at *10 (E.D. Penn. 2001) (noting that “the existence of a primary
‘plan’ connotes some type of formal arrangement”).
15
to meet the conceptual definition of self-insurance, an entity
would have to engage in the same sorts of underwriting
procedures that insurance companies employ; estimating likely
losses during the period, setting up a mechanism for creating
sufficient reserves to meet those losses as they occur, and,
usually, arranging for commercial insurance for losses in
excess of some stated amount.23
Thus, according to the ordinary meaning of the terms of the MSP
statute, it is wrong for the government to contend that an entity’s
negotiating of a single settlement with an individual plaintiff is
sufficient, in and of itself, for such entity to be deemed as
having a “self-insurance plan.”
In addition, the regulations promulgated under the MSP statute
by the HCFA reflect the ordinary meaning of a “self-insurance
plan.” The HCFA regulations define a “plan” as “any arrangement,
oral or written, by one or more entities, to provide health
benefits or medical care or assume legal liability for injury or
illness.”24 The regulations further define a “self-insurance plan”
as “a plan under which an individual, or a private or governmental
entity, carries its own risk instead of taking out insurance with
a carrier.”25 It is clear from the regulations implementing the MSP
statute that the existence of a self-insurance plan requires that
23
1 COUCH ON INSURANCE 10:1 (3d 1997). See also Alderson v. Ins.
Co. of N. Am., 223 Cal. App. 3d 397, 407 (1990) (noting that “[i]t
is implicit in the term, ‘self-insurer,’ that such person maintains
a fund, or a reserve, to cover possible losses, from which it pays
out valid claims, and that the self-insurer have a procedure for
considering such claims and for managing that reserve”).
24
42 C.F.R. § 411.21.
25
42 C.F.R. § 411.50(b) (emphasis added).
16
there by some form of arrangement —— the creation ex ante of a fund
and distribution procedures —— for making potential payments to a
set of prospective claimants. The HCFA regulations even speak in
prospective terms. For example, § 411.21 defines a “plan” as an
“arrangement . . . to provide health benefits or assume legal
liability.” Such language contemplates a pre-arrangement and makes
sense only if a self-insurer creates or maintains a fund or source
and establishes rules for making disbursements therefrom in
covering the self-insurer’s future risk, i.e., when one acts as an
insurance carrier for onself.26
Furthermore, the well-known interpretative canon, expressio
unius est exclusio alterius —— “the expression of one thing implies
the exclusion of another”27 —— confirms that the government is
advocating an unreasonably broad interpretation of the MSP statute.
The MSP statute explicitly speaks in terms of insurance plans that
provide primary medical coverage. Nowhere does the MSP statute
mention or even suggest that an alleged tortfeasor who settles a
single claim with a single plaintiff falls within the ambit of the
statute’s category of a self-insurance “plan.” The failure of
Congress to include in the MSP statute a right of action for
reimbursement of medical expenditures against tortfeasors indicates
26
See Silicone Gel Breast Implants,174 F. Supp. 2d at 1254
(noting that “the regulatory language defining ‘self-insured plan’
connotes some type of formal arrangement by which funds are set
aside and accessed to cover future liabilities”).
27
73 AM. JUR. 2d Statutes § 129 (2002).
17
that this statute “plainly intends to allow recovery only from an
insurer.”28
This application of expressio unius to the MSP statute is
further supported by the canon that instructs courts to adopt
harmonious interpretations of statutes addressing similar
subjects.29 In this respect, the Medical Care Recovery Act30
(“MCRA”) explicitly provides for the right of action that the
government is attempting to read into the MSP statute. The MCRA
expressly arms the government with a right to recover medical
payments that it has made “under circumstances creating a tort
liability upon some third person.”31 In such instances, the
government may “institute and prosecute legal proceedings against
the third person who is liable for the injury or disease . . . for
the payment or reimbursement of medical expenses or lost pay . . .
.”32 In express terms, then, the MCRA affords the government the
legal right of recovery that it is urging us to read into the MSP
28
Health Ins. Ass’n v. Shalala, 23 F.3d 412, 427 n.* (D.C.
Cir. 1994) (Henderson, J., concurring) (emphasis added).
29
73 AM. JUR. 2d Statutes § 168 (2002). We recently recognized
that “we should attempt to give horizontal coherence to the United
States Code and ensure that different statutes interact coherently
and harmoniously.” Murphy v. Penn. Higher Educ. Assistance Agency
& Educ. Mgmt. Credit Corp., 282 F.3d 868, 872 (5th Cir. 2002)
(citing Pierce v. Underwood, 487 U.S. 552, 561-63 (1988)).
30
42 U.S.C. § 2651-53 (2002).
31
§ 2651(a).
32
§ 2651(b).
18
statute, which is silent on the point. The express inclusion of
recovery from tortfeasors in the MCRA supports the conclusion that
Congress’s omission of tortfeasors from the list of those
potentially liable under the MSP statute was knowing and
intentional.33
Recognizing the government’s attempt to fold the MCRA into the
MSP, the In re Diet Drugs court noted that
[u]nlike the MCRA, the MSP does not mention a right by the
Government to recover from a tortfeasor. Rather, the express
wording of the [MSP] statute creates a cause of action only
against insurers and their payees. . . . Under the
Government’s construction of the [MSP] statute, every
tortfeasor that used its general assets to fund a tort
settlement with persons who had received federal health care
benefits would be potentially liable under the MSP. There is
simply no support for this extremely broad construction of the
[MSP] statute.34
When faced with two statutes on similar subjects, courts must,
whenever possible, interpret them so as to give effect to both.35
Yet, if we were to adopt the broad construction of the MSP statute
urged by the government in this case, we would, in effect,
33
Cf. In re Dow Corning Corp., 250 B.R. 298, 339 (Bankr. E.D.
Mich. 2000) (noting that the court is “dubious that the term ‘self-
insured plan’ covers or was meant to cover every tortfeasor who
fails to obtain insurance”); 54 Fed. Reg. 41727 (Oct. 11, 1989)
(responding to a comment that explicitly asks for clarification on
whether an alleged tortfeasor is liable under the MSP statute as a
“self-insurer,” the HFCA notes that “the mere absence of insurance
purchased from a carrier does not necessarily constitute a ‘plan’
of self-insurance”).
34
2001 WL 283163, at *10 (citations omitted).
35
United States v. Borden, 308 U.S. 188, 198 (1939) (“When
there are two acts upon the same subject, the rule is to give
effect to both if possible.”).
19
eliminate the need for the MCRA, or at least condemn some of
Congress’s language in the MCRA to the scrap heap of surplusage.
This would be unacceptable, particularly when a completely
reasonable interpretation of the MSP statute is offered by the
plain terms of the statute itself. As a district court noted in
rejecting another government attempt to read MCRA authority into
the MSP statute: “[I]t is clear that Congress did not intend MSP
to be used as an across the board procedural vehicle for suing
tortfeasors.”36
By its plain terms, the MSP statute and the HCFA regulations
predicate reimbursement liability on the existence of a primary
insurance plan. In its First Amended Complaint, the government
obfuscates this fact when it cabins the MSP statute’s requirements
as applying to those entities that have only “primary payment
responsibility.”37 More important, in its specific count against
Zimmer, the government never alleges that Zimmer paid Goetzmann and
Loftin according to a pre-existing plan; it asserts only the
conclusions that Zimmer was “responsible to pay for Defendant
36
Philip Morris, Inc., 116 F. Supp. at 135. See also
Orthopedic Bone Screw, 202 F.R.D. at 165 (“Unlike the MCRA, the MSP
does not mention a right by the government to recover from a
tortfeasor.”).
37
In its discussion of the HCFA regulations later in the
complaint, the government acknowledges that a “third party payer”
must possess an “insurance policy, plan . . ., or program that is
primary to Medicare” in order to be liable under the MSP statute,
citing 42 C.F.R. § 411.21. The government, however, never
indicates how this essential legal element for liability under the
MSP statute applies to Zimmer in this case.
20
Loftin’s medical expenses” and that Zimmer “was self-insured for
its liability to Loftin.” As the D.C. district court noted in
granting a motion to dismiss by a similarly situated defendant
corporation in a parallel case: “In fact, the Complaint does not
even allege the existence of any elements of a ‘primary plan,’ such
as a ‘plan’ or ‘arrangement.’”38
Even when we liberally construe the government’s complaint, as
we must, we see that the MSP statute and its implementing
regulations require a primary insurance plan. But Zimmer has only
negotiated a discrete settlement with a single plaintiff and paid
that plaintiff accordingly. It is simply a non sequitur for the
government to infer from “payment responsibility” in tort a pre-
existing primary plan of self-insurance. In considering the
government’s allegations against Zimmer under the MSP statute, we
are compelled to pose the rhetorical question, where’s the plan?39
Beyond oblique references to Zimmer’s responsibility to pay Loftin,
the existence of a “primary plan” is nowhere to be found in the
government’s complaint against Zimmer.
On appeal, the government repeatedly (but in isolation) quotes
the MSP statute’s phrase that an entity which is “required or
38
United States v. Philip Morris, Inc., 116 F. Supp. 2d 131,
145 (D.D.C. 2000) (original emphasis).
39
See Orthopedic Bone Screw, 202 F.R.D. at 165-66 (noting that
the “Government’s argument . . . fails to account for the repeated
use of the word ‘plan’ throughout the MSP and regulations
promulgated thereunder”).
21
responsible” for paying for a Medicare recipient’s healthcare
expenses is liable to reimburse the government. Ergo, the
government urges, Zimmer is arguably liable under the MSP statute,
or at least there is a basis for inferring potential liability
sufficient to survive a Rule 12(b)(6) motion to dismiss. Yet,
litigants cannot cherry-pick particular phrases out of statutory
schemes simply to justify an exceptionally broad —— and favorable
—— interpretation of a statute.40 As the D.C. district court held
only one year ago in a similar case litigated by the government
under the MSP statute, “MSP liability attaches only to an entity
that is ‘required or responsible’ to pay under a ‘primary plan.’”41
As we already noted, nothing in the government’s pleadings can be
read to support the conclusional allegation that Zimmer maintained
such “primary plan” of self-insurance for paying claimants such as
Loftin.42 According to the plain terms of the MSP statute and the
40
“It is a ‘fundamental canon of statutory construction that
the words of a statute must be read in their context and with a
view to their place in the overall statutory scheme.’” FDA v. Brown
& Williamson Tobacco Corp., 529 U.S. 120, 133 (2000) (quoting Davis
v. Michigan Dept. of Treasury, 489 U.S. 803, 809 (1989)).
41
United States v. Philip Morris, Inc., 156 F. Supp. 2d 1, 4
(D.D.C. 2001) (citing 42 U.S.C. § 1395y(b)(2)) (emphasis added).
42
On appeal, the government submits a copy of a portion of the
10-K filing by Zimmer’s parent corporation, Bristol-Myers Squibb
Company (“Bristol-Myers”), showing that Bristol-Myers has obtained
insurance coverage for a substantial number of breast-implant
products-liability claims. Beyond another oblique argument that
this 10-K filing reveals that Bristol-Myers has arranged for
additional insurance coverage, the government fails to explain how
this is relevant to whether Zimmer settled Loftin’s discrete hip-
prosthesis product-liability lawsuit under a “primary plan” of
22
HCFA regulations, therefore, Zimmer can have no MSP liability.
3. No Chevron Deference for the Government’s Interpretation
of the MSP Statute.
The government further argues that the term “self-insurance
plan,” as used in the MSP statute, is ambiguous, entitling the
agency’s own interpretation to Chevron deference.43 According to
the government, this is particularly relevant because Zimmer is a
“large and sophisticated manufacturer of medical devices.” As
such, Zimmer’s status as a “large corporation” permits a reasonable
inference that Zimmer “can readily be regarded as self-insured.”
The government concludes that this is a reasonable interpretation
of the MSP statute’s ambiguous terms and legislative history, to
which we must defer.
We reject this effort by the government to clothe itself in
the deference given to agencies’ reasonable interpretations of
ambiguous statutory provisions. First, the clarity of the MSP
statute’s terms readily discloses the statute’s plain meaning,
eschewing the label of ambiguity. Thus, there is no need even to
consider Chevron deference because the government’s argument fails
the first prong of the analysis for granting such deference —— the
determination that a statutory grant of authority to a regulatory
“self-insurance.”
43
Chevron U.S.A. v. Natural Res. Def. Council, 467 U.S. 837,
843-44 (1984) (holding that courts must defer to an agency’s
“permissible construction” or “reasonable interpretation” of
ambiguous statutory terms).
23
agency is ambiguous. As the Chevron court recognized, “[i]f the
intent of Congress is clear, that is the end of the matter; for the
court, as well as the agency, must give effect to the unambiguously
expressed intent of Congress.”44
Second, even if the MSP statute were ambiguous and we were to
consider legislative history and the agency’s regulations, and
conclude that the HCFA regulations would support the government’s
appellate argument that Zimmer’s settlement agreement with Loftin
constituted a primary self-insurance plan, there is simply no
statutory support for the government’s position that uninsured
“sophisticated corporations” are per se self-insurers. There is no
language in the MSP statute justifying a distinction between a
“sophisticated corporation” and an individual or small business.
The government does not invite our attention to anything that could
serve as a statutory hook on which to hang this argument. In fact,
the government has already attempted to sell this argument to
district courts in New York and D.C., but to no avail.45 It offers
us no reason why we should reject or depart from these previous
judicial decisions. In summary, the government’s proffered
interpretation of the MSP statute, as it currently stands,
44
Id. at 842-43. Notably, the Court recognized that the
meaning of a statute is ascertained by “employing traditional tools
of statutory construction,” such as the above-referenced canons.
Id. at 843, n.9.
45
See Mason, 212 F. Supp. 2d at 92; Philip Morris, 156 F.
Supp. 2d at 7.
24
constitutes nothing more than “the litigation position of agency
counsel that is wholly unsupported by regulations, rulings, or
administrative practice [and thus] is not entitled to deference” by
this or any court.46
C. Goetzmann and Loftin’s Reimbursement Liability Under the MSP
Statute.
1. Standard of Review.
We review a grant of summary judgment de novo, applying the
same standard as the district court.47 A motion for summary
judgment is properly granted only if there is no genuine issue as
to any material fact.48 A fact issue is material if its resolution
could affect the outcome of the action.49 In deciding whether a
fact issue has been created, we view the facts and the inferences
to be drawn therefrom in the light most favorable to the nonmoving
party.50
The standard for summary judgment mirrors that for judgment as
46
Silicone Gel Breast Implants, 174 F. Supp. 2d at 1249
(citing Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 211 (1988)).
See also Orthopedic Bone Screw, 202 F.R.D. at 164 (denying Chevron
deference to the government’s interpretation of the MSP statute and
regulations).
47
Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380
(5th Cir. 1998).
48
Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986).
49
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
50
See Olabisiomotosho v. City of Houston, 185 F.3d 521, 525
(5th Cir. 1999).
25
a matter of law.51 Thus, we must review all of the evidence in the
record, but make no credibility determinations or weigh any
evidence.52 In reviewing all the evidence, we must disregard all
evidence favorable to the moving party that the jury is not
required to believe, and should give credence to the evidence
favoring the nonmoving party as well as the evidence supporting the
moving party that is uncontradicted and unimpeached.53 The
nonmoving party, however, cannot satisfy his summary judgment
burden with conclusional allegations, unsubstantiated assertions,
or only a scintilla of evidence.54
2. Goetzmann and Loftin are not Required to Reimburse the
Government Because They did Not Receive Payment from an
Insurer.
The government asserts a right of recovery against Goetzmann
and Loftin based on their receipt of monies from Zimmer pursuant to
the terms of the settlement agreement. “Under the MPSA, the United
States is limited to pursuing an independent right of recovery
against two types of entities: a ‘primary plan;’ or an entity that
has received payment from a primary plan.”55 As neither Goetzmann
51
Celotex Corp., 477 U.S. at 323.
52
Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133,
150 (2000).
53
Id. at 151.
54
Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.
1994) (en banc).
55
Dow Corning Corp., 250 B.R. at 337 (citing cases). See also
Silicone Gel Breast Implants, 174 F. Supp. 2d at 1253 (noting that
26
nor Loftin can be found to have received monies from an entity ——
Zimmer —— that distributed funds under a “primary plan,” neither
Goetzmann nor Loftin can be required to reimburse the government
under the MSP statute.
III. CONCLUSION
This case is the latest illustration of the government’s
refusal to accept the burgeoning weight of jurisprudence comprising
at least seven judicial rejections of its repeated attempts to have
the MSP statute construed beyond its plain terms. Six federal
district courts and one bankruptcy court have already rejected the
government’s interpretation of the MSP statute to include alleged
tortfeasors who settle with injured plaintiffs.56 In this case, the
government brings nothing new to the table in support of the very
same interpretation of the MSP statute that it has repeatedly
advanced and had repeatedly rejected by the courts. Rather, the
government simply regurgitates yet again the same unavailing
arguments.
We appear to be the first appellate court to address this
issue, but we see no valid reason to depart from the numerous trial
courts’ adept analyses of the MSP statute and its implementing
“[t]he express wording of the [MSP] statute creates a cause of
action against insurers and their payees”).
56
See generally Mason, 212 F. Supp. 2d at 91-93; Silicone Gel
Breast Implants, 174 F. Supp. 2d at 1250-59; Philip Morris, 156 F.
Supp. 2d at 3-8; Orthopedic Bone Screw, 202 F.R.D. at 163-69; Diet
Drugs, 2001 WL 283163, at *9-*12; Philip Morris, 116 F. Supp. 2d at
144-46; Dow Corning Corp., 250 B.R. at 335-42, 348.
27
regulations. Although we might applaud its motive in seeking to
recoup funds it has disbursed for Medicare treatment and services,
the government’s desire to expand the list of those responsible for
reimbursement likely should be directed to Congress rather than to
the courts, lest future repetitions be met with sanctions for
unnecessarily protracting baseless or even frivolous litigation.
As the In re Dow Corning Corp. court noted:
Despite the relatively simple structure of the MSP
[statute], it has generated considerable case law. . . .
[S]adly, a significant amount of the legal melee is the direct
result of the Government urging statutory constructions, as it
has done in this case, that are entirely unsupported by the
statute and which appear to be intended to convert the MSP
[statute] from an important and sensibly fashioned fiscal
cost-cutting measure into a mere, heavy-handed collection
tool.57
When the instant case is reduced to basics, the government’s
allegations do not depict Zimmer as having had acted under a
primary self-insurance plan when it settled with Loftin. Zimmer
was simply an alleged tortfeasor —— nothing more and nothing less.
Loftin, through her attorney, Goetzmann, was simply a plaintiff in
a products-liability lawsuit who, through Goetzmann, agreed to
settle with the defendant rather than proceeding to trial. As
alleged, the settlement reached between Zimmer and Loftin was a
discrete agreement, the result of nothing more than the parties’
particular litigation tactics in this one case. In fact, the
government does not allege anywhere in its complaint that Zimmer
57
Dow Corning Corp., 250 B.R. at 336 n.21.
28
paid Goetzmann and Loftin according to a pre-existing primary plan
of self-insurance. The conclusion is thus inescapable: These
three parties are well outside the scope of the MSP statute. For
the foregoing reasons, the district court’s dismissals of the
government’s claims against Zimmer under Rule 12(b)(6), and against
Goetzmann and Loftin via summary judgment, are, in all respects,
AFFIRMED.
29
Thompson v. Goetzmann
Court: Court of Appeals for the Fifth Circuit
Date filed: 2003-07-07
Citations: 337 F.3d 489
Copy CitationsCombined Opinion