Telecare Corp. v. Leavitt

409 F.3d 1345, 2005 U.S. App. LEXIS 9521
CourtCourt of Appeals for the Federal Circuit
DecidedMay 25, 2005
Docket04-1389
StatusPublished
Cited by15 cases

This text of 409 F.3d 1345 (Telecare Corp. v. Leavitt) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Telecare Corp. v. Leavitt, 409 F.3d 1345, 2005 U.S. App. LEXIS 9521 (Fed. Cir. 2005).

Opinion

409 F.3d 1345

TELECARE CORP., Plaintiff-Appellant,
v.
Mike LEAVITT, Secretary of Health and Human Services, Department of Health and Human Services, and Center for Medicare and Medicaid Services, Defendants-Appellees.

No. 04-1389.

United States Court of Appeals, Federal Circuit.

May 25, 2005.

Jeffrey L. Fisher, Davis Wright Tremaine LLP, of Seattle, Washington, argued for plaintiff-appellant. On the brief were James P. Walsh, of San Francisco, California, and D. Bruce Lamka, of Seattle, Washington. Of counsel was Peter L. Isola, of San Francisco, California.

Alisa B. Klein, Attorney, Appellate Staff, Civil Division, United States Department of Justice, of Washington, DC, argued for defendants-appellees. With her on the brief were Peter D. Keisler, Assistant Attorney General, Kevin V. Ryan, United States Attorney, of San Francisco, California, and Mark B. Stern, Attorney. Of counsel on the brief were Alex Azar, II, General Counsel, Robert P. Jaye, Acting Associate General Counsel, Carol Bennett, Deputy Associate General Counsel for Program Integrity, and Howard S. Cohen, Attorney, United States Department of Health and Human Services, of Washington, DC.

Before CLEVENGER, RADER, and DYK, Circuit Judges.

DYK, Circuit Judge.

This case involves a dispute between Telecare Corp. ("Telecare") and the government as to Telecare's liability under the Medicare Secondary Payer statute, Social Security Act § 1862, codified at 42 U.S.C. § 1395y. The United States District Court for the Northern District of California held that Telecare was liable as a secondary payer. We affirm.

BACKGROUND

* The defendants in this case administer the Medicare program. Medicare provides health insurance to the elderly, the disabled, and other eligible beneficiaries. Medicare was enacted in 1965 as Title 18 of the Social Security Act, commonly known as the Medicare Act. See Health Insurance for the Aged Act, Pub.L. No. 89-97, 79 Stat. 286 (1965).

Beginning in 1980, Congress provided that where beneficiaries are covered for medical expenses by both a group health plan and Medicare, Medicare would be a "secondary payer" of those medical expenses. This provision is known as the Medicare Secondary Payer ("MSP") statute and is found at section 1862 of the Social Security Act, codified as 42 U.S.C. § 1395y. "When the MSP statute applies, a private group health plan must pay for an expense first. Thus, it is the `primary payer.' Medicare pays for any remaining amount of the expense not satisfied by the group health plan. Consequently, it is the `secondary payer.'" N.Y. Life Ins. Co. v. United States, 190 F.3d 1372, 1374 (Fed. Cir.1999).

Although a private group health plan is obligated to make payment when primarily liable, and Medicare is to avoid payment in such circumstances, Medicare nonetheless sometimes makes payments in error. See United States v. Baxter Int'l, Inc., 345 F.3d 866, 901 & n. 30 (11th Cir.2003). The government has the right to reimbursement in such circumstances, and that reimbursement right is not limited to the beneficiary, the health care provider, or the group health plan. Under the statute, as amended in 2003, the government may recoup the payment from

any or all entities that are or were required or responsible (directly, as an insurer or self-insurer, as a third-party administrator, as an employer that sponsors or contributes to a group health plan, or large group health plan, or otherwise) to make payment with respect to the same item or service (or any portion thereof) under a primary plan....

Social Security Act § 1862(b)(2)(B)(iii), codified at 42 U.S.C.A. § 1395y(b)(2)(B)(iii) (Supp.2004) (emphasis added).

The issue in this appeal is whether the statute authorizes recovery against an employer that "sponsors or contributes to" a group health plan.

II

Telecare is a company that provides services to those suffering from mental illness. The issue concerns Telecare's liability for Medicare payments made to Telecare's employees (and their dependents). Telecare makes available to its employees a prepaid health care plan from Kaiser Foundation Health Plan and pays a premium to Kaiser, thereby sponsoring and contributing to the group health plan. Under the arrangement between Kaiser and Telecare, Kaiser is obligated to provide a defined list of health care items and services for Telecare employees and their dependents. Telecare is not itself contractually obligated to pay health care providers for these medical services.

Some of Telecare's employees and their dependents are also covered by Medicare. One such individual incurred medical expenses, for which Medicare initially paid. Invoking the MSP statute, Medicare then demanded that Telecare reimburse it, allegedly without seeking payment from the group health plan (Kaiser). Telecare eventually paid Medicare the sum of $1470.96 under protest. Telecare then filed this action in the United States District Court for the Northern District of California, seeking recovery of the amount paid to Medicare under the Little Tucker Act, 28 U.S.C. § 1346(a)(2), and declaratory and injunctive relief against further reimbursement demands under the Administrative Procedure Act ("APA"), 5 U.S.C. § 701 et seq. Telecare also sought class certification with respect to the APA claim.

The district court dismissed the complaint. The district court held that there was jurisdiction over Telecare's claim for $1470.96 under the Little Tucker Act but dismissed the suit for failure to state a claim, because the MSP statute, as amended in 2003, gave Medicare the right to seek reimbursement from Telecare. Telecare Corp. v. Thompson, No. 03-CV-3797, slip op. at 2-3, 6-7 (N.D.Cal.2004). The district court concluded that "[a]n employer that sponsors or contributes to a group health plan ... falls squarely into the language of the statute." Id. at 6. The district court dismissed the APA claim for lack of jurisdiction because there was no APA waiver of sovereign immunity where an adequate remedy existed under the Tucker Act or Little Tucker Act to recover the amounts illegally extracted by the government.1 Id. at 2-3. The district court did not rule on Telecare's motion for class certification. Telecare appeals.2

DISCUSSION

* We must first consider whether the district court had jurisdiction over the claim for $1470.96 under the Little Tucker Act. Although the government concedes jurisdiction under the Little Tucker Act, every "appellate federal court must satisfy itself not only of its own jurisdiction, but also of that of the lower courts in a cause under review." Mitchell v. Maurer, 293 U.S. 237, 244, 55 S.Ct. 162, 79 L.Ed. 338 (1934).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Eteros Techs. USA, Inc. v. United States
2025 CIT 99 (Court of International Trade, 2025)
McCarthy v. Del Toro
M.D. Florida, 2023
Hanser v. McDonough
56 F.4th 967 (Federal Circuit, 2022)
M. Nicolas Enterprises, Llc.
Federal Claims, 2022
Alpine Pcs, Inc. v. United States
878 F.3d 1086 (Federal Circuit, 2018)
Changzhou Trina Solar Energy Co. Ltd. v. United States
255 F. Supp. 3d 1312 (Court of International Trade, 2017)
Patricia A. Martin v. Eric K. Shinseki
26 Vet. App. 451 (Veterans Claims, 2014)
Nebraska Public Power District v. United States
590 F.3d 1357 (Federal Circuit, 2010)

Cite This Page — Counsel Stack

Bluebook (online)
409 F.3d 1345, 2005 U.S. App. LEXIS 9521, Counsel Stack Legal Research, https://law.counselstack.com/opinion/telecare-corp-v-leavitt-cafc-2005.