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Netro v. Greater Baltimore Medical Center, Inc.

United States Court of Appeals, Fourth Circuit

June 4, 2018

KATHY A. NETRO, Personal Representative of the Estate of Barbara Bromwell, Deceased, Plaintiff - Appellant,
v.
GREATER BALTIMORE MEDICAL CENTER, INC., Defendant-Appellee.

          Argued: March 22, 2018

          Appeal from the United States District Court for the District of Maryland, at Baltimore. George L. Russell, III, District Judge. (1:16-cv-03769-GLR)

         ARGUED:

          George Somerville Tolley, III, DUGAN BABIJ & TOLLEY, LLC, Timonium, Maryland, for Appellant. Christina Nicole Billiet, WARANCH & BROWN, LLC, Lutherville, Maryland, for Appellee.

         ON BRIEF:

          Neal M. Brown, WARANCH & BROWN, LLC, Lutherville, Maryland, for Appellee.

          Before WILKINSON, TRAXLER, Circuit Judges, and Leonie M. BRINKEMA, United States District Judge for the Eastern District of Virginia, sitting by designation.

          WILKINSON, CIRCUIT JUDGE

         Kathy Netro brought a medical malpractice suit in state court against the Greater Baltimore Medical Center for its negligent care of her now-deceased mother. When she won, GBMC became liable under federal law for payments Medicare had made for Netro's mother's treatment. GBMC did not immediately satisfy the judgment. And three weeks after the state court entered its final order, Netro brought this suit to recover solely the funds owed to Medicare and to collect for herself under the Medicare Secondary Payer Act, 42 U.S.C. § 1395y, which authorizes a private cause of action for double damages where a recalcitrant payer "fails" to reimburse Medicare. But before the litigation went very far, GBMC paid Netro the state court judgment, which included the full amount owed to Medicare. This series of events brings us to the straightforward question in this case: Did GBMC "fail" to pay the funds owed to Medicare? The district court said no, and we agree.

         I. A.

         In 1980, Congress enacted the Medicare Secondary Payer Act to address ballooning medical entitlement costs. Before the legislation went into effect, Medicare would pay for all medical treatment within its ambit, even if a private party such as an insurer was also responsible. The MSP Act "inverted that system" and made Medicare "an entitlement of last resort, available only if no private [party] was liable." Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 832 F.3d 1229, 1234 (11th Cir. 2016).

         Congress designed this new arrangement with an important caveat. Where a private party responsible for medical costs does not or cannot promptly meet its obligations, Medicare may pay up front, so long as the responsible party eventually reimburses the government. See 42 U.S.C. § 1395y(b)(2)(B). Congress later added two tools to ensure that so-called "primary plans" would compensate Medicare for these "conditional payments": a direct government action against the responsible party, and a private enforcement provision.

         42 U.S.C. § 1395y(b)(3)(A) provides that "[t]here is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) . . . ." Legislative history is scant, but "[c]ourts considering the provision have generally agreed that the apparent purpose of the statute is to help the government recover conditional payments from insurers or other primary payers." Stalley v. Catholic Health Initiatives, 509 F.3d 517, 524 (8th Cir. 2007) (collecting authorities).

The thinking behind the statute is apparently that (1) the beneficiary can be expected to be more aware than the government of whether other entities may be responsible to pay his expenses; (2) without the double damages, the beneficiary might not be motivated to take arms against a recalcitrant insurer because Medicare may have already paid the expenses and the beneficiary would have nothing to gain by pursuing the primary payer; and (3) with the private right of action and the double damages, the beneficiary can pay back the government for its outlay and still have money left over to reward him for his efforts.

Id. at 524-25.

         B.

          In June 2011, GBMC performed hip replacement surgery on Barbara Bromwell. After the surgery, she suffered complications that resulted in partial paralysis. Bromwell died two years later. Her daughter, Kathy Netro, was named personal representative of Bromwell's estate.

         Netro filed a medical malpractice suit against GBMC in Maryland state court. After a trial on the merits, a jury found GBMC liable for $451, 956 in damages on July 22, 2016. That figure included compensation for $157, 730.75 in "conditional payments" made by Medicare for Bromwell's treatment. Netro was obligated to pass along that portion of the state court judgment to Medicare.

         Shortly after the jury verdict, GBMC filed a post-trial motion seeking to reduce the amount of the initial judgment to more accurately reflect the medical expenses actually paid, rather than the amount billed, for Bromwell's care. While the state court considered the motion, GBMC began making arrangements to pay Netro. It requested a Tax Identification Number for Bromwell's estate, but the parties disagreed about whether that information was necessary to make the payment. The state court granted GBMC's motion and entered a final judgment of $389, 014.30 on October 31, 2016.

         Just three weeks later, on November 21, Netro brought this suit in the United States District Court for the District of Maryland. Alleging that GBMC refused to pay the state court judgment, Netro invoked the private cause of action laid out in the MSP Act.

         Sixteen days after Netro filed the federal suit, GBMC paid her $403, 722.24, which represented the amended final judgment amount plus post-judgment interest. GBMC then filed a motion arguing that the district court should dismiss Netro's suit for lack of standing, or, in the alternative, grant GBMC summary judgment because it did not "fail" to provide reimbursement for Medicare.

         Without addressing the standing argument, the district court granted GBMC's motion for summary judgment on the merits. See Netro v. Greater Baltimore Med. Ctr. Inc., No. CV GLR-16-3769, 2017 WL 5635446, at *4 (D. Md. Apr. 13, 2017). It reasoned that the statute did not require GBMC to pay Netro or reimburse Medicare immediately after the state court's final judgment, and that GBMC's December 7 payment had satisfied its obligations under the MSP Act.

         This appeal followed. We "review legal questions regarding standing de novo." David v. Alphin, 704 F.3d 327, 333 (4th Cir. 2013). We also "review a district court's decision to grant summary judgment de novo, applying the same legal standards as the district court, and viewing all reasonable inferences drawn from the evidence in the light that is most favorable to the non-moving party." Heyer v. U.S. Bureau of Prisons, 849 F.3d 202, 208-09 (4th Cir. 2017).

         II.

         We first consider whether Netro had Article III standing to bring this suit. "A plaintiff invoking federal jurisdiction bears the burden of establishing the 'irreducible constitutional minimum' of standing by demonstrating (1) an injury in fact, (2) fairly traceable to the challenged conduct of the defendant, and (3) likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1543-44 (2016). GBMC argues that Netro lacked standing because the money she sought to recover was owed to the government, and not to her. In other words, GBMC contends Netro was not injured.

         A.

         We believe, to the contrary, that Netro suffered a ...


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