Eleventh District Court Dismisses MAO Private Cause of Action

Medicare Advantage Organizations (MAOs) right to recovery under the private cause of action provision of the Medicare Secondary Payer Act (MSP) continues to be a hot issue in court decisions as more and more Plans seek recovery under this provision.

As you may recall, a private cause of action exists under the Medicare Secondary Payer (MSP) Act when a primary plan fails to pay for Medicare’s conditional payment. Additionally, the private cause of action allows for double damages. See 42 USC §1395y(b)(3)(A). While decisions on this issue continue to fall both ways, currently the Third, Fifth and Eleventh circuits are allowing MAOs a right to recovery under this provision. The provision further requires that a primary plan's responsibility be demonstrated “by a judgment, a payment conditioned upon the recipient's compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan's insured, or by other means.” 42 U.S.C. § 1395y(b)(2)(B)(ii).

The issue of demonstrating responsibility was recently addressed in MSP Recovery, LLC v. Progressive Select Insurance Company, 2015 U.S. Dist. LEXIS 47784 (11th Cir. April 1, 2015). In the case at issue, a Medicare beneficiary held coverage through a Medicare Advantage Plan (MAP) when he was injured in a car accident. The medical bills related to the accident should have been paid through his PIP coverage with Progressive, the Defendant in this case. The Defendant, however, did not immediately pay the related bills. As such, those bills were covered by the MAO. MSP Recovery, LLC, Plaintiff, through assignment by the MAO, filed for recovery against the Defendant’s PIP coverage due to the Defendant’s failure to provide reimbursement. Although the Court followed the Third Circuit’s holding in In re Advandia, and found that the MAO did in fact have a private cause of action under the MSP, the Plaintiff’s claim was eventually dismissed for failure to demonstrate responsibility to reimburse. We will continue to monitor all upcoming decisions for discussions on this issue.

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