Ninth Circuit Concludes Judgment in Favor of CIGA as a Guaranty Fund Not Subject to MSP Obligations

As we had blogged about last October, the 9th Circuit in CIGA v. Azar held that CIGA as a Guaranty Fund was not a “primary plan” under the MSP, due to the fact that CIGA pays for medical care only if the insurer is insolvent, and as such the WC claim does not automatically trigger coverage. For our prior blog, click here.

Just recently on February 11, 2020, the Ninth Circuit entered Final Judgment in favor of CIGA for the reasons set forth in the October 10, 2019 judgment and the Clerk will now be closing the case. This also arose as a Joint Entry of Judgment meaning that the Department of Health & Human Services (DHHS)/Centers for Medicare & Medicaid Services (CMS) has agreed to the judgment. The Ninth Circuit’s decision is now final and binding, and CIGA is not held to MSP obligations, according to the Circuit Court.

Commentary: What is interesting and unfortunately confusing about this Final Judgment is that the Centers for Medicare & Medicaid Services (CMS)’ technical guidance is seemingly not in line with this logic that Guaranty Funds are not subject to the MSP or reporting of claims via Section 111 Medicare Reporting.  In fact, at least two sections of the NGHP User Guide reference Guaranty Funds as entities that may be subject to reporting. See Sections 6.1.3 and 6.5.1 of the most recent NGHP User Guide.

This decision by the Ninth Circuit unfortunately creates confusion for Guaranty Funds. We are hopeful that this matter is clarified by CMS in the future via additional guidance or perhaps in the Final Proposed Rule on MMSEA Section 111 Reporting CMPs.

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