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Humana Medical Plan, Inc. v. Mary Reale, et al., Case No. 3D12-2882 (3rd DCA)

In Reale, Humana appealed a final judgment determining its right to reimbursement of conditional Medicare payments under Florida subrogation law, including Florida’s collateral sources of indemnity statute, section 768.76, Florida Statutes. The Third District ruled that the trial court did not have subject-matter jurisdiction to review the dispute and that Florida’s collateral sources of indemnity statute is on its face inapplicable.

In about 2009, Humana paid conditional Medicare benefits for the plaintiff’s medical treatment in the amount of $19,155.41, the result of a third party’s liability. Humana provided benefits under a Part C Medicare advantage program. The plaintiff filed suit, and later recovered a settlement of $135,000. The trial court applied section 768.76, Florida Statutes, and determined that Humana was entitled to approximately $3,000 as reimbursement. Humana appealed.

The Third District ruled that the trial court lacked subject-matter jurisdiction because the plaintiff failed to exhaust mandatory administrative remedies and, even if exhaustion had occurred, the plaintiff’s claim was subject to exclusive federal jurisdiction. The Third District noted that under the Medicare Act, the Social Security program’s judicial review process is the sole avenue for judicial review of all claims arising under the Medicare Act. The statutory provisions additionally limit jurisdiction of claims arising under the Medicare Act to the federal courts but only after exhaustion of administrative remedies. Accordingly, 42 U.S.C. 405(h) and 405(g), when read together, “create an exclusive review process for all claims arising under the Medicare Act, including claims brought in the context of the Medicare Advantage program.”

The Third District additionally ruled that Florida’s subrogation law is expressly preempted by Part C’s broad and unambiguous preemption provision, 42 U.S.C. 1395w-26(b)(3). The Third District ruled that on its face, Fla. Stat. 768.76 provides that benefits received under Medicare are not collateral sources. The plaintiff argued that Humana did not provide Medicare conditional benefits and Humana is not Medicare. The Third District ruled, however, that Humana is a Medicare advantage organization that provides Medicare benefits. Therefore, the benefits paid are indisputably benefits received under Medicare, and Fla. Stat. 768.76 makes clear that such benefits shall not be considered a collateral source. As such, Fla. Stat. 768.76 was inapplicable to the benefits paid in this case.

The Third District also noted that even if Fla. Stat. 768.76 may be applicable to determine Humana’s right to reimbursement, Fla. Stat. 768.76 is preempted by the broad, express preemption clause in Part C of the Medicare Act.

Accordingly, the Third District ruled that the trial court erred in its finding of subject-matter jurisdiction and its determination of Humana’s reimbursement rights pursuant to Florida’s subrogation law.

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