Delaware Superior Court: Importance of MAOs in Medicare System

In Honey v. Bayhealth Medical Center, Inc., 2015 Del. Super. LEXIS 378, a Superior Court in Delaware recently bolstered the importance given to Medicare Advantage Organizations in recent months by finding that, with regards to the application of the state’s collateral source rule, an MAO is subject to the same limitations as Medicare, rather than those attributed to private insurers. This determination supports the status that MAOs have been gaining recently within the court decisions. While the application of the rule to Medicare had previously been addressed by the Delaware Supreme Court in Stayton v. Delaware Health Corporation, the Supreme Court did not address how the rule applies to MAOs. In deciding whether to treat the MAO as akin to Medicare or a private insurer, the Honey Court looked to the Third Circuit’s decision in In Re Avandia as support and noted that an MAO is “a federal program” and “squarely within the traditional Medicare system.” 

This recent decision further evidences how more and more courts are likening MAOs to Medicare and remains a trend that we will closely monitor.