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In Parra v. PacifiCare, the question of a Medicare Part C plan’s right to reimbursement was analyzed by an Arizona federal district court.  Manuel Parra was struck by a car in a parking lot.  He suffered what turned out to be fatal injuries as a result of the accident.  He was treated prior to his death and bills were paid by PacifiCare.  The total value of the benefits provided to Mr. Parra prior to his death was $136,630.90.  Mr. Parra’s survivors brought a claim against the defendant driver and his insurance company, GEICO.  The damages sought were for the loss of their relationship with Manuel Parra and they did not seek or receive compensation for medical expenses.  No estate was established or appointment of a PR to pursue a claim under the survivorship statute in Arizona.

GEICO tendered its policy limits of $500,000 to settlement the wrongful death claim brought by the Parras.  PacifiCare informed plaintiff counsel and GEICO that it had a right of recovery for all medical expenses it paid for Manuel Parra’s medical care and treatment related to the personal injury action.  GEICO issued a separate check made payable to plaintiff counsel and Ingenix for the full amount of the lien of $136,630.90 to be held in trust pending resolution of the Medicare plan’s right of recovery. 

A declaratory action ensued because the parties were unable to resolve the dispute over the Medicare plan’s right or recovery.  The central question faced by the Court in Parra was whether the defendant, PacifiCare, had a federal cause action against the plaintiff because if not the federal court action must be dismissed for lack of jurisdiction.  PacifiCare argued that Congress created an implied private right of action for Medicare Advantage plans.  This argument was premised on an argument that because Medicare has an express right it has an implied right.  The Parra court found that the opposite was true.  Because Medicare had an express right while Medicare Advantage plans did not, there could not be an implied right.  The Parra court also found that preemption didn’t establish jurisdiction because there was not complete preemption which is the only way it would create federal court jurisdiction.  This was so because PacifiCare claimed it had a state law contractual recovery cause of action as well.  The Parra court put it as follows:

Defendant cannot create a federal right of action or subject matter jurisdiction in this Court by stating its contract claim as being based on a federal right. In other words, “a complaint alleging a violation of a federal statute as an element of a state cause of action, when Congress has determined that there should be no private, federal cause of action for the violation, does not state a claim ‘arising under the Constitution, laws, or treaties of the United States.’

Because there was no federal court jurisdiction, the action was dismissed for lack of subject matter jurisdiction.  The court did recognize that PacifiCare had a right of recovery based upon state law contractual claims.  An interesting point not addressed was whether there could be any recovery at all given the fact that medical damages were not sought in the action.  This case reaches a similar result to the Reale Florida decision and solidifies the fact that Medicare Advantage plans don’t have the ability to bring a private cause of action in federal court to recover payments made in connection with a personal injury claim.