Humana, Inc., a private health insurer which offers Medicare Advantage and Part D prescription coverage to Medicare beneficiaries, has filed lawsuits in four District Courts (Eastern Tennessee, Kansas, Western District of Missouri and the Eastern District of Texas) to expand its reimbursement rights under the Medicare Secondary Payer Act. The target defendant is the Farmers Insurance Group, but it may as well be every no-fault, Med Pay or PIP carrier as the decision will have far reaching impact. Humana alleges deceptive trade practices, conditional payment reimbursement, double damages and an accounting action for all claims to discover missed reimbursements from Farmers. If Humana prevails, the damages could be staggering, not to mention having repercussions for workers’ compensation and general liability claims involving Medicare beneficiaries reaching settlement, judgment or award.
We have received copies of the lawsuits for your review: Tennessee, Texas, Missouri & Kansas. We blogged previously, about Humana’s win in the Third Circuit Court of Appeals in the Avandia case. That lawsuit established Humana’s private cause of action for double damages against a general liability carrier under the Medicare Secondary Payer Act. These new filings appear to be an attempt by Humana to extend these rights beyond the third circuit to other jurisdictions. As you may recall, the Parra v. Pacificare decision, out of the 9th Circuit Court of Appeals, could have been perceived by Humana as contra to the decision in Avandia. This is an obvious bold move to re-establish momentum on the part of Humana on this issue.
We will monitor these lawsuits as they progress. In the interim, we urge all of our clients to exercise caution when resolving a Medicare beneficiary claim. Always inquire about Medicare Advantage and Part D status. This can be accomplished through our new Medicare Advantage/Part D identification service and resolution service offerings. Do not ignore letters from a Medicare Advantage or Part D plan, but promptly respond. With our strategies in place the front line adjuster will avoid liability and be properly guided through the maze of this developing exposure. We look forward to discussing these issues with you.
Please watch our blog for important updates. Whichever way this decision goes, it will have a significant impact to the Industry and how claims are processed. We are available anytime to discuss.