George Horvath

Recovery and Preemption: The Collision of the Medicare Secondary Payer Act and the Medical Device Amendments

Congress often uses its power to preempt state laws when a uniform nationwide regulatory environment is desirable. Unfortunately, preemption may have unintended, far-reaching effects. When Congress enacted the Medical Device Amendments of 1976 (“MDA”), it included an express preemption clause to ensure that only the Food and Drug Administration (“FDA”) could establish ex ante, premarket requirements for medical devices, thus allowing the Agency to establish a uniform regulatory floor. Just four years later, Congress enacted the Medicare Secondary Payer Act (“MSP”), part of a series of amendments to the Medicare program designed to improve the program’s finances. The MSP included provisions that allow the United States to recover payments Medicare had made on behalf of its beneficiaries, by standing in the place of those beneficiaries in state tort actions against tortfeasors. These provisions gave Medicare broad authority to seek recovery from the manufacturers of defective medical devices when the program had paid for the devices. However, in many cases the express preemption clause of the MDA and the Supreme Court’s overly broad implied preemption jurisprudence preempt Medicare beneficiaries’ state law claims. Since Medicare’s ability to recover under the MSP is based on its beneficiaries’ rights, the MDA may also prevent Medicare from recovering under the MSP. This collision between two statutes drafted within four years of one another illustrates the unintended effects that a broad preemption doctrine may have. This Comment argues that both Congress and the Supreme Court need to review and narrow the reach of preemption under the MDA—without completely abandoning preemption—so that both the MDA and the MSP may serve the purposes Congress intended.