What Entities Can Avail Themselves of the MSP Private Cause of Action for Double Damages? United States Weighs in on this Question in the Eleventh Circuit Court of Appeals
Heather Sanderson
June 22, 2020

Just recently, the United States Department of Health & Human Services (HHS) submitted an Amicus Curiae Brief in the Eleventh Circuit in the MSP Recovery Claims, LLC v. Ace American Insurance Company, et al case. A copy of the Amicus Brief can be found here. For those without a legal background reading this blog, an amicus brief is a legal Latin term that refers to a document filed in an appellate court by a non-litigant with a strong interest in the subject matter. As HHS administers the Medicare program, the Eleventh Circuit therefore determined it had a strong interest in the interpretation of the statute at issue in this case.

This amicus brief is in response to the Court’s December 23, 2019 letter inviting the HHS to submit an amicus brief regarding “the appropriate interpretation of 42 U.S.C. § 1395y(b)(3)(A) and whether certain [management service organizations] and [independent physician associations] may access the private right of action.” Management service organizations (MSOs), which were the primary focus of this amicus brief, are essentially organizations that provide administrative and management functions for Medicare Advantage Organizations (MAOs).

The question posed to the Court by MSP Recovery was whether MSOs can file an action for double damages under the MSP private cause of action against a primary payer, just like an MAO could, as had been determined in the Eleventh Circuit previously in the Humana Med. Plan, Inc. v. Western Heritage Ins. Co. case.

MSP Recovery LLC is a law firm in Miami, Florida which alleges to have received assignments on behalf of various MAOs (and other affiliated entities) to pursue double damages Medicare Secondary Payer (MSP) private cause of action lawsuits and class actions nationwide. In response to this question in its Amicus Brief, HHS opined that for similar reasons, other entities that have paid for or provided coverage and for that reason suffer injuries in fact based on the failure to provide reimbursement may avail themselves of the private cause of action and pursue double damages.

But, HHS opined, MSOs and IPAs may avail themselves of the private right of action if and only if these organizations have paid for or provided medical care and would have been entitled to the reimbursement had it been made. Further, HHS stated that it was not taking any position on whether the particular MSOs or IPAs involved in this case could take advantage of the private right of action, nor was it opining on the validity of any purported assignment on which plaintiffs were relying.

Commentary: What is interesting about this amicus brief is that it is the first formal comment that HHS/CMS has issued on use of the private cause of action by MAOs since CMS issued its Memorandum stating that MAOs and Part D plans shall have the same rights to recovery of conditional payments as traditional Medicare. A copy of this 2011 memorandum can be found here. Thus, this is now the second occasion in which HHS has formally stated its position that MAOs and Part D plans have the right to this cause of action for double damages.

HHS/CMS acknowledged in the Amicus Brief that the MSP does not specify who may access that cause of action. The statute simply states that “[t]here is established a private cause of action for damages.” 42 U.S.C. § 1395y(b)(3)(A). Clearly, HHS is aware that the non-specific nature of the MSP private cause of action for double damages has spurred on entities such as MSP Recovery to utilize this private cause of action as a weapon against primary payers.  

More to come on this amicus brief though, as the Eleventh Circuit would still need still need to adopt HHS’ recommendations provided in the brief. The main takeaway on this is that CMS has now voiced their formal opinion for the second time on MAO/Part D recovery rights via this amicus brief, which may now be looked to or adopted in the Eleventh Circuit as well as in other litigation in other jurisdictions as guidance on MAO/Part D recovery rights.

As always, we recommend primary payers be on high alert of settling claims with MAO or Part D enrollees, as if they have made conditional payments and have not reimbursed, they may attempt to utilize the private cause of action to seek recovery of double damages.

For questions, please contact Heather.Sanderson@francosignor.com.