Seniors Group Sues Tobacco Companies To Recover $60B in Medicare Costs
The United Seniors Association has filed a lawsuit in U.S. District Court in Boston against several of the nation's largest tobacco companies, seeking to recover billions of dollars spent by Medicare to treat smoking-related diseases, the Wall Street Journal reports.
The case involves a "little-known but recently strengthened provision" of Medicare law that allows someone to sue on behalf of Medicare when it pays medical expenses that another party was legally obligated to cover -- such as when a corporate health plan has agreed to cover the expenses or when a business or other party has injured a Medicare beneficiary and is liable, according to the Journal. The provision exists in part because the government does not have the resources to prosecute every case, the Journal reports.
The suit names Philip Morris USA, Lorillard Tobacco, the Liggett Group and R.J. Reynolds Tobacco and two of its subsidiaries. The lawsuit draws a link between nicotine addiction and smoking-related diseases such as lung cancer and emphysema. It argues that "addiction is the key ... [to] the prolonged use of cigarettes that commonly causes these diseases," and that tobacco companies hid the addictive nature of their products and sought to enhance their addictiveness. According to the suit, "The Medicare beneficiaries who have suffered from or are suffering from diseases attributable to smoking the defendants' cigarettes did not consent to being exposed to the addictive properties of the defendants' cigarettes."
The group -- which has supported initiatives backed by the pharmaceutical and energy industries -- says it would like to recover at least $60 billion that it estimates Medicare has spent on treatment for smoking-related diseases in the past five years, the statute of limitations on the law. If the court finds in favor of the group, Medicare would collect the damages and the group would be eligible for an equal amount.
"Our motivation is one of taxpayer protection," Charles Jarvis, the group's chair and CEO, said. He added, "Considering how badly the taxpayers have been injured financially, we believe the responsible parties -- the tobacco companies -- should be reimbursing the taxpayer to the greatest amount possible under the law."
A lawyer for Altria, the parent company of Philip Morris, said he thought the case would be dismissed. David Howard, an R.J. Reynolds spokesperson, said, "Virtually all courts have rejected third-party health care reimbursement claims, and in the rulings they've stated that they lack standing to sue because claims by the third parties are too remote from any alleged injury." Lorillard and Liggett declined to comment (Goldfarb, Wall Street Journal, 8/5).