A Medicare Advantage Plan’s right to pursue a private cause of action against a law firm and individual attorney under the Medicare Secondary Payer Act (MSP) was considered in the recent Humana Insurance Co. v Parris Blank, LLP: 3:16CV79HEH(E.D. Va.2016) case . Humana Insurance Company, a Medicare Advantage Plan, brought this action seeking to recover the conditional payments made to treat the Enrollee’s injuries from a motor vehicle accident on October 11, 2013. Enrollee was represented in the underlying personal injury claim by attorney Keith Marcus and the Paris Blank LLP law firm.
Enrollee resolved his liability claim against multiple liability insurance companies and settlement checks were issued for a total settlement of $475,600.00. Most of the liability insurance companies issued settlement checks with Paris Blank as the sole payee. On April 17, 2014, Rockingham Casualty Company issued its settlement check, payable to Paris Blank and Humana. The Rockingham settlement check was deposited without Humana’s endorsement.
On January 15, 2015, Humana notified the Enrollee that they were seeking reimbursement for payments made related to the car accident in the amount of $191,612.09. Humana requested payment within 60 days and provided information for waiver and appeal of the payment. Enrollee’s attorney, Marcus, sent Humana a copy of CMS’ correspondence stating that no benefits were owed under Part A or Part B in its request for waiver. The request for waiver was denied by Humana on April 23, 2015.
Humana filed a complaint to recoup its conditional payments against Paris Blank and Marcus in the United States District Court for the Eastern District of Virginia. Paris Blank filed a motion to dismiss arguing that Humana did not have a private cause of action under the Medicare Secondary Payer Act.
Although the District Court acknowledged that the Fourth Circuit had yet to determine whether a Medicare Advantage Organization (MAO) has the same recovery rights as Medicare under the Medicare Secondary Payer Act (MSP) 42 U.S.C. §1395y(b)(3)(A), it found the Third Circuit’s decision in the In Re: Avandia, 685 F.3d 353, case persuasive in determining that MAOs may pursue recovery under the MSP private cause of action section. The Court also rejected Defendants argument that a law firm is not a “primary payer” under the MSP noting that CMS’ regulations, specifically identify attorneys as an entity from which conditional payment recovery may be sought by the Secretary.
When settling claims with Medicare beneficiaries, parties should be mindful of the potential exposure for the reimbursement of payments made by Medicare Advantage Plans. Since CMS does not provide information regarding these payments in a conditional payment search, this information may be secured through discovery and close review of medical billing. We will keep you updated as more cases develop surrounding recovery rights to entities under the MSP Act.