Downstream Actors May Have a Right to Reimbursement

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Downstream Actors May Have a Right to Reimbursement: MSP Recovery Claims v. Ace Am. Ins. Co, 2020 U.S. Dist. Lexis 28610

In Ace, the U.S. Court of Appeals for Eleventh Circuit reversed a District Court’s decision and determined that a “downstream actor” from a Medicare Advantage Organization (MAO) had the right to seek reimbursement under the Medicare Secondary Payer Act.

A downstream actor in this case appears to be a vendor for a MAO that provides healthcare and administrative services for beneficiaries. This results in the vendor making payments to medical providers on behalf of the MAO or reimburse an MAO for payments associated with a non-group health plan (NGHP) claim. In this case, the vendor then assigned any rights to repayment to “MSP Recovery Claims.” 

The Appellate Court determined the “non-MAO status” of the vendor and assignee allowed reimbursement rights under the Medicare Secondary Payer Act. The Court found the intent of the Medicare Secondary Payer Act would be thwarted if downstream actors were precluded from seeking reimbursement under the Medicare Secondary Payer Act. 

The Court’s basis for this decision zeroes in on the fact that the Medicare Secondary Payer Act is NOT a qui tam provision. This means one factor (of many) you need to satisfy to seek recovery for conditional payments associated with a claim is to show a connection to the conditional payment. This limits the type of plaintiff that can seek reimbursement under the Medicare Secondary Payer Act.

The Court determined downstream actors that have made conditional payments on behalf of a MAO, or have reimbursed an MAO, associated with a NGHP claim have the right to seek reimbursement under the Medicare Secondary Payer Act.  This also allows the downstream actor to access the double damages provision. This requires reimbursement of twice the amount of conditional payments if suit is filed for recover. 

This means litigation likely will continue for this matter. As new information develops, we will keep you posted.