U.S., et al v. United distributors, Inc., et al., 2012 U.S. Dist LEXIS 162836.
Facts: The injured worker, Willie Archer was an employee of UDI, a privately owned beverage distribution company. On April 5, 2008, Mr. Archer was injured in a fall while at work and was admitted to Candler Hospital for emergency treatment and later transferred to St. Joseph’s Hospital where he died on May 27, 2008. A workers’ compensation claim was filed and referred by his employer to the workers’ compensation insurance carrier, AIG which denied the loss on March 26, 2008 after investigation. After the case was denied, Mr. Archer’s spouse called the Employer’s CEO to discuss how to pay for her husband’s medical benefits. During this call, the Employer alleges that Mr. Archer’s spouse elected COBRA and agreed to forego an appeal of her husband’s workers’ compensation claim. As Mr. Archer was a Medicare beneficiary at the time of the accident, Medicare paid $341,802.09 in benefits. Medicare, through the U.S. Attorney’s office filed the False Claims Act lawsuit, based on the belief that the Workers’ Compensation carrier should be primary for the loss, because the COBRA election was a sham.
Discussion: The case involves a discovery dispute that arose between the U.S. and Employer. The U.S. sought to quash a subpoena to allow discovery of CMS processes. While the case is primarily focused on whether, and to what extent, to allow such a subpoena, the real issue for all of us dealing with Medicare Secondary Payer is the fact that the U.S. is bringing such actions. It appears the driver of this lawsuit are the hospitals that have received significantly less in payment, compared to what they would have received if the workers’ compensation claim had been pursued and accepted. It is certainly a case worthy of being monitored as it is prosecuted in Georgia District Court.
It is this author’s opinion that this case marks an important point in the area of Medicare Secondary Payer Compliance. Whistleblower claims are more likely to lead to action against insurance carriers and self insured(s) than closely monitored penalties to the MSP Act. And since it is easier under the Fraud Enforcement and Recovery Act of 2009 to demonstrate an overpayment by the Federal Governement, it is important to tighten up the organization’s compliance process with clear steps implemented to:
1) Identify Medicare beneficiary status;
2) Reimburse Medicare;
3) Report to Medicare and
4) Protect Medicare.
Developing MSP best practices and implementing it across the enterprise mitigates risk. In a claim such as this, it’s important to understand the interrelation between what occurs in the human resources department and how it may reflect on the pending claim. Lesson learned, payments to Medicare beneficiaries outside of the claim will be scrutinized – not all by Medicare, but by providers looking for a better payback for its services.
Contact us and we can show you how to comply with Medicare Secondary Payer Act in a meaningful and practical way. We will plan to monitor this litigation and present on any outcomes that may come of it.