Over the past several years, we have witnessed Medicare Advantage Plans (MAPs) flex their muscles in establishing their rights to recover double damages through a Medicare Secondary Payer (MSP) private cause of action for double damages against “primary plans” (workers’ compensation, liability, and no-fault insurance carriers/self-insured entities) for failure to timely reimburse MAP conditional payments.

Well known and important decisions in this regard are the In Re Avandia decision out of the Third Circuit (covering New Jersey, Pennsylvania and Delaware) and the Humana v. Western Heritage decision out of the Eleventh Circuit (covering Alabama, Florida and Georgia) which have now established that MAPs have a right to a MSP double damages private cause of action against primary plans for failure to timely reimburse MAP conditional payments.

While primary payers have been a target of this litigation and the current state of ability to recover double damages is unknown in the other Circuits across the country, we have not seen a written decision in any circuit on whether Plaintiff attorneys (the attorney representing the Medicare beneficiary) are responsible for double damages under the MSP private cause of action.

We have seen lawsuits against plaintiff attorneys, by Medicare Advantage Plans, but they have settled out of court, hence no case law.  To wit, last year, we did see United Healthcare and Aetna MAPs jointly sue several plaintiff attorney law firms that represented asbestos Medicare beneficiary claimants enrolled in MAPs for failure to reimburse conditional payments. For our prior blog on this matter, click here.  We also saw Humana MAP individually pursue an action against a Plaintiff attorney law firm Paris Blank LLP, which matter settled. For our prior blog on this matter, click here.

Just recently, Humana has filed two more MSP private cause of action double damage complaints against Plaintiff attorneys. Additional actions across the country are likely to come in what we suspect will go to written decision and create new law. The actions are titled Humana v. Pelham (Northern District of Florida) and Humana v. Floyd Falcon (Middle District of Louisiana). In both actions, Humana has asserted that it put the Medicare beneficiary’s attorneys on notice of its lien and the Plaintiff attorneys ignored and/or failed to reimburse Humana. As a result, Humana is seeking both a Declaratory Judgment that it is entitled to its reimbursement of conditional payments as well as a double damages private cause of action pursuant to 42 USC 1395y(b)(3)(A).

Commentary: Humana is clearly seeking to establish that MAPs have the right to recover its conditional payments from any entity, including a beneficiary, provider, supplier, physician, attorney, state agency or private insurer that has received a “primary payment” just as the Centers for Medicare & Medicaid Services (CMS) has the right to do pursuant to 42 CFR 411.24(g) by holding Plaintiff attorneys accountable in these matters. The In Re Avandia and Western Heritage decisions have clearly established this right in both the Third and Eleventh Circuits, and Humana is continuing to seek to expand its recovery rights in various jurisdictions against various parties.

By pursuing these actions against both Plaintiff attorneys as well as primary plans, Humana and other MAPs will be setting forth nationwide precedent as to its ability to recover its conditional payments. No longer can parties to a settlement with a Medicare beneficiary bury their heads in the sand as to Medicare Advantage plan conditional payments. It is interesting that in the Pelham lawsuit, attorney Pelham asserted that because he received a letter from the “COBR contractor” that because there were no Part A and B Medicare conditional payment liens, that he “considered the matter closed.” Clearly, attorney Pelham was not aware that traditional Medicare does not pursue recovery of Medicare Advantage plan conditional payments and does not have information of such liens.

Plaintiff attorneys and primary plans need to obtain Medicare Advantage enrollment information from the Medicare beneficiary and/or the beneficiary’s attorney prior to settlement and ensure the MAP is reimbursed or a double damages private cause of action is ripe and actionable sixty (60) days after the settlement check is issued.

The time is now to ensure that settlements with Medicare beneficiaries include consideration of any payments by possible MAPs. For more information and advice on MAP conditional payment best practices, or to obtain a copy of either of the foregoing referenced Humana complaints, please contact Heather Sanderson at Heather.Sanderson@francosignor.com.


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