RECENT COURT DECISIONS
Leggette v. B.V. Hedrick Gravel & Sand Company
In Leggette v. B.V. Hedrick Gravel & Sand Company, 2006 U.S. Dist. LEXIS 98297 (USDC North Carolina, 2006), plaintiffs commenced an action to recover health insurance benefits pursuant to the Employee Retirement Income Security Act ("ERISA") and the Medicare Secondary Payer Act ("MSP"). Plaintiff, Willie Leggette, suffered from End-Stage Renal Disease ("ERSD"). This disease is one of the qualifiers for receipt of Medicare benefits. The main dispute in the case concerns the interpretation of an ERISA Plan. Additional plaintiffs are Bio Medical Applications of North Carolina, Inc., d/b/a BMA of Albemarle as Assignee of Willie Leggette. Defendants are B.V. Hedrick Gravel & Sand Company, and the Hedrick Employee Group Benefit Plan. Plaintiffs sued to obtain clarification of an "assignment" provision of the ERISA Plan, and to appeal the Plan's denial of health insurance benefits to Mr. Leggette. The court found that BMA had standing to pursue the ERISA claim. The court also found on behalf of Mr. Leggette, "Hedrick abused its discretion when it limited Mr. Leggette's healthcare benefits."
The court's handling of the MSP issue can be found on the last page of the decision. The issue was how to apply MSP's private cause of action for "double damages against a primary plan which fails to provide for primary payment." (42 USC ยง 1395y(b)(3). The court states, "Although there is no binding authority on the point, the few courts to consider the issue have held that a MSP 'double damages' claim may be maintained only where Medicare has, in fact, paid claims that a primary payer should have, but refused, to pay." Therefore, there is a prerequisite of actual payment by Medicare in order to maintain a double damages action. In Leggette, Medicare was likely to assume a role or payer, but no payments had actually been made by Medicare. Thus, defendant's motion for summary judgment was granted with respect to the MSP "double damages" claim.