MSP Recovery LLC, a law firm out of Miami, Florida has been initiating class action litigation country-wide as assignees on behalf of Medicare Advantage Plans (MAPs) alleging that various primary payers have failed to reimburse MAP conditional payments allegedly giving rise to a Private Cause of Action under the Medicare Secondary Payer Act (MSP), specifically located at 42 USC §1395y(b)(3)(A). The litigation success of this organization should serve as a wakeup call for secondary payers, including the workers’ compensation industry. Here is the statutory back story to a new success story (for them) in a recently published appellate decision.
In 1980, to “curb the rising costs of Medicare,” Congress enacted the Medicare Secondary Payer Act, 42 U.S.C. § 1395y, which flipped the payment order, such that private insurers became the primary payers and Medicare became the secondary payer. A primary payer can include an entity responsible for providing workers’ compensation medical care.
When a primary-payer plan doesn’t or can’t pay “promptly” – say, for instance, when it is contesting liability – Medicare can make a conditional payment on behalf of a beneficiary, for which it can later seek reimbursement from the primary plan. If Medicare pays and then seeks reimbursement, only to be refused, the United States can sue the primary plan (or a medical provider) to recover its payment.
Section 1395y(b)(2)(B)(iii) contains a statute of limitations that requires the government to sue within three years of the date that Medicare receives notice of a primary payer’s responsibility to pay. The Act also contains a “private cause of action,” codified at § 1395y(b)(3)(A), which is available to Medicare beneficiaries and other private entities, who “are often in a better position than the government to know about the existence of responsible primary plans” that haven’t reimbursed Medicare or paid a beneficiary’s healthcare provider.
The private cause of action rewards successful plaintiffs with double damages after giving Medicare its share of the recovery, the plaintiff can keep whatever is left over. Unlike the government cause of action, the private cause of action contains no statute of limitations.
In 1997, in yet another effort to make Medicare more efficient, Congress enacted Medicare Part C, or the “Medicare Advantage” program. The legislation created Medicare Advantage Organizations. MAOs – like Medicare itself – were categorized as secondary payers. MAOs can sue to recover from primary plans that should pay, but don’t. MAOs, must utilize the Act’s private cause of action, rather than the government cause of action.
The case of MSPA Claims v. Kingsway Amigo began with an automobile accident in 2012. One of the people injured was a Medicare beneficiary who received her benefits from a Medicare Advantage Organization – Florida Healthcare Plus – that later assigned its claims to MSPA Claims (aka MSP Recovery LLC).
The other party involved in the accident was insured by Kingsway Amigo Insurance. The Medicare beneficiary obtained treatment for her accident-related injuries and Florida Healthcare made $21,965 in payments. The beneficiary settled a personal-injury claim with Kingsway and received a $6,667 settlement payment.
In 2015 MSPA sued Kingsway under the Act’s private cause of action. MSPA argued that Kingsway was the primary payer and Florida Healthcare was the secondary payer, giving MSPA – as Florida Healthcare’s assignee – the right to recover.
Kingsway filed a motion for judgment on the pleadings, arguing that MSPA’s claim was stale because it didn’t comply with the Act’s claims-filing provision limiting recovery claims to 3 years from the time item or service was furnished. The complaint alleged that services were provided between April 29 and July 26, 2012, Kingsway contended that a request for reimbursement had to have been made before July 26, 2015, which it wasn’t.
The district court granted Kingsway’s motion and MSPA appealed. The Court of Appeals for the 11th Circuit disagreed and reversed in the published case of MSPA Claims v. Kingsway Amigo .
The central issue in the appeal was whether MSPA’s failure to comply with the Medicare Secondary Payer Act’s claims-filing provision, § 1395y(b)is fatal to its suit against Kingsway, as the district court concluded.
In rendering its decision, the 11th Circuit Court noted that the plain reading of the MSP claims filing provision did not preclude MSPA Claims from filing suit. Essentially, the Court found that the dependent “notwithstanding” clause and the permissive term “may” in the actual text of the MSP claims filing provision means that MAOs are not required to bring suit as a prerequisite in the 3 year period.
Essentially, the permissive language within the law does not erect a separate bar that private plaintiffs must overcome to sue under the MSP private cause of action.