Earlier this year, we reported on several filings by MSP Recovery LLC which involved class action lawsuits against large insurance carriers/primary payers for double damages pursuant to the Medicare Secondary Payer (MSP) private cause of action. These lawsuits, amongst others similarly filed by MSP Recovery, have all been consolidated into one appeal in the 11th Circuit. On September 4, 2020, the 11th Circuit found in favor of MSP Recovery continuing to pursue these consolidated double damages claims. The 11th Circuit decision finding in favor of MSP Recovery can be found here.
In our blog on the MSPA Claims v. Kingsway Amigo case, we reported that Plaintiff MSPA Claims (aka MSP Recovery LLC) persuaded the 11th Circuit that the Medicare Secondary Payer (MSP) 3-year claims filing provision located at 42 USC § 1395y(b)(2)(B)(vi) does not preclude a Medicare Advantage Organization (MAO) from filing an MSP double damages cause of action pursuant to 42 USC § 1395y(b)(3)(A). In other words, Medicare Advantage Plans can file a private cause of action against primary payers for double damages under the MSP private cause of action without claims filing/time limitations. In the 11th Circuit decision referenced above, the 11th Circuit again confirmed this notion paving the way for these claims to continue on despite the MSP 3-year claims-filing provision.
Further, in our other related blog on the amicus curiae filing by the Department of Health and Human Services (DHHS)/CMS in the MSP Recovery Claims, LLC v. Ace American Insurance Company, et al case, it was noted that DHHS/CMS supported the ability for Medicare Advantage downstream organizations such as Management Service Organizations (MSOs) to pursue a private cause of action as well, if that downstream organization had in fact made payment as a secondary payer. The 11th Circuit confirmed DHHS’ position in the 11th Circuit decision referenced above. The 11th Circuit decision demonstrates that MSP Recovery and other Medicare Advantage/downstream organizations can pursue primary payers in the 11th Circuit for an MSP private cause of action without any time or entity limitations.
Due to the fact that Medicare Advantage Organizations, along with their assignors such as MSP Recovery LLC, have been successful in several Circuits (the 11th and 3rd), as well as many District Courts across the country, primary payers may want to consider best practices for Medicare claims which involve proactive identification of Medicare Advantage conditional payments in order to avoid any such double damages litigation.
Lastly, in an interesting declaratory bankruptcy decision out of Florida filed on September 2, 2020, In Re Jordan, 2020 Bankr. LEXIS 2363, Progressive Insurance Company was successful in holding back releasing settlement funds until the Plaintiff Medicare beneficiary could prove that they satisfied Medicare’s final demand. The bankruptcy judge, acknowledging that if the Medicare beneficiary did not reimburse Medicare, that Progressive would be liable to Medicare within sixty (60) days of settlement, found that Progressive’s refusal to rely on Medicare hold-harmless language in the settlement agreement was “certainly permissible and reasonable.”
In summary, it is in a primary payer’s strong interest to ensure Medicare/Medicare Advantage is reimbursed, rather than rely on the Plaintiff or their attorney’s hold harmless language, as it is not adequate protection in the event that Medicare is not reimbursed. Similar to the private cause of action for double damages, the Federal government also has a right to pursue double damages from a primary payer if it has to file suit to recover traditional Medicare conditional payments.
Avoidance of disruption of settlements and potential double damages is possible. A primary payer’s best bet is simply to proactively identify Medicare beneficiaries at the outset of workers’ compensation, liability, and no-fault claims, and reimburse any Medicare/Medicare Advantage/Part D conditional payments directly and timely.
For questions, please contact Heather.Sanderson@francosignor.com.