MSP Recovery Law Firm Acted As Amicus Curiae In Seminal Case Finding For Secondary Payer’s Right to Recover Double Damages

The Eleventh Circuit Court of Appeals follows the Third Circuit’s lead by finding a Medicare Advantage Organization (MAO) has a private cause of action to pursue reimbursement under the Medicare Secondary Payer Act (MSP).

A case of first impression, Humana Med. Plan v. W. Heritage Ins. Co., touched upon whether the MSP private cause of action permits a MAO to sue a primary payer that refuses to reimburse the MAO for a secondary payment.

The Eleventh Circuit affirmed the district court’s order granting Humana’s Motion for Summary Judgment, and found that Humana was entitled to recover double damages as a result of Western’s failure to reimburse the company for medical expenses it advanced on behalf of an enrollee.

The court relied on the Third Circuit’s interpretation of the MSP’s private cause of action provision and held that “[t]he statutory text of the MSP Act clearly indicates the MAOs are included within the purview of parties who may bring a private cause of action.” Thus, an MAO has a statutory right to charge a primary plan when an MAO payment is made secondary pursuant to the MSP.

The court also agreed with the district court in finding Western the primary payer as a result of the settlement agreement the liability insurer had paid Humana’s enrollee for covered medical expenses.

Western’s claim it lacked constructive knowledge that Medicare made a payment was unavailing. Its attempt to list Humana as a payee on the settlement check indicates the insurer knew of Humana’s lien. The court also rejected Western’s contention that it provided for appropriate reimbursement by placing funds into trust pending the resolution of the dispute between the enrollee and Humana.

Therefore, Western’s failure to reimburse the MAO after the settlement with the enrollee entitled Humana to double damages. This decision provides further evidence that MAOs continue to gain momentum in their recovery rights.