Trezza v. Trezza
Justice Thomas Dickerson
Plaintiff participated in Oxford Health Plans' Medicare+Choice program authorized under Part C of the Medicare Act. Medicare secondary payer organization Oxford paid $37,787 for her medical expenses after a 2005 auto accident. Her 2007 injury suit against defendant husband and the second car's owners and operator was settled for $75,000. In 2010, Rawlings Co. claimed Oxford's entitlement to reimbursement. In 2011 supreme court extinguished Oxford's reimbursement claim under General Obligations Law §5-335. Second Department held the court erred in extinguishing Oxford's reimbursement claim based on §5-335. As applied to Medicare Advantage organizations §5-335 is federally preempted because it restricts the organizations' contractual reimbursement rights under the Medicare Act. Because §5-335 is neither a licensing law nor a law concerning plan solvency, in the context of personal injury settlements, it "takes away a Medicare Advantage organization's right under federal law and the Medicare secondary payer regulations to bill, or to authorize providers and suppliers to bill, for services for which Medicare is not the primary payer" in contravention of the federal regulations enabled by 42 USC §1395w-26(b)(1).