Another Double Damages MSP Private Cause of Action Filed Against Plaintiff Attorneys
Heather Sanderson
December 5, 2016

A few months ago, we issued a blog regarding MSP private cause of action litigation against a Plaintiff attorney law firm for failure to reimburse the MAP its conditional payments (Humana v. Paris Blank LLP). For our prior blog on this case, click here.

The Paris Blank matter has now settled and the parties are subject to a confidentiality provision.  Notwithstanding, it appears that this is not the end of MAPs pursuing double damages against Plaintiff attorneys that are settling claims with Medicare beneficiaries and failing to ensure that any MAP conditional payments are repaid.

We have just become aware that Humana, United Healthcare and Aetna jointly filed a lawsuit against several Plaintiff attorney law firms that represented asbestos claimants. The litigation is currently in the United States District Court, Southern District of Texas Galveston Division. A copy of the Complaint can be found here.

There are multiple Counts within the Complaint; however, of particular interest and relevant to MSP is that the Medicare Advantage Plans have included an action for a double damages MSP private cause of action against the Plaintiff attorneys (there are several plaintiff firms named in the Complaint) for failure to reimburse conditional payments.

Count II of the Complaint states: “Hundreds of matched asbestos claimants are enrolled in MA plans, and millions of dollars have been paid to them in connection with resolving all, or a portion, of their asbestos claims. In many, if not most, of these instances, the matched asbestos claimants received asbestos recoveries without disclosing them to or reimbursing the MA plan plaintiff who provided their medical benefits. By doing so, the matched asbestos claimants, the defendant law firms, and the tortfeasors are cheating the MA plan plaintiffs and gaming the Medicare system in violation of the MSP.”

Franco Signor Commentary: This litigation is in its infant stages; however, this litigation is definitely a clear indicator of several items:

1)      We have historically seen Humana primarily as the Plaintiff in the vast majority of these double damages actions. However, the two other largest MAP plans (United Healthcare and Aetna) have joined in this suit and are clearly looking to enforce their rights to have the same recovery rights as Medicare against Plaintiff attorneys. We will likely see more litigation by these other large MAPs in the future.

2)      Plaintiff attorneys seem to be the new target. However, we have historically seen MAPs bring an MSP double damages private cause of action against primary plans and providers too. All parties to the settlement are at risk for an MSP cause of action.

3)     MAPs are looking to set precedent in various Circuits and are bringing these actions nationwide. This instant litigation is out of the Fifth Circuit, where local case law has previously favored MAP rights. Based on this prior case law, we believe that the Court will find that the MAPs have a plausible cause of action for double damages against these Plaintiff attorney firms.

Heather Schwartz Sanderson, Esq., MSCC, CHPE, CLMP, CMSP
Chief Legal Officer
Franco Signor LLC