US District Court: Requires More Than Contractual Obligation to Establish Primary Payer Responsibility
October 12, 2015
We continue to see courts acknowledging the rights of Medicare Advantage Organizations (MAOs) to pursue an action for recovery of conditional payments under the private cause of action provision of the Medicare Secondary Payer Act (MSPA). Recently, the discussion has revolved around the requirement to establish an obligation for primary payment before an action under the MSPA is allowed to proceed. Interestingly, courts have found that contractual relationship alone will not suffice to demonstrate primary payer responsibility. See MSPA Claims 1, LLC v. Liberty Mut. Ins., No. 1:15-cv-21417-UU, 2015 U.S. Dist. LEXIS 99188 (S.D. Fla. July 22, 2015); see also Glover v. Liggett Group, Inc., 459 F.3d 1304 (11th Cir. 2006). Instead, courts are looking for additional evidence in the form of a separate adjudication or other agreement indicating that the insurer is responsible for primary payment before an action for double damages can be brought.
In MSP Recovery, LLC v. Allstate Ins. Co., 2015 U.S. Dist. LEXIS 130834 (S.D. Fla. Sept. 18, 2015), the United States District Court for the Southern District of Florida held, again, that primary payer responsibility must be established before an action can be brought under the MSPA. In this case, after a MAO Enrollee was injured in a car accident, Enrollee’s MAO, represented here by Plaintiff, filed suit seeking recovery from Defendant, Enrollee’s no-fault insurer, for payments made on an Enrollee's behalf related to injuries suffered in the motor vehicle accident. The Court declined to accept Plaintiff's argument that Defendant's liability for primary payment of Enrollee's claims resulting from the accident was established based solely on the insurance contract with Enrollee. Instead, the Court required a more definite demonstration of responsibility. The Court does not explicitly state that a contractual agreement alone is insufficient to establish responsibility for payment; however, the Court found that Plaintiff cannot proceed with claims under the MSPA until Plaintiff demonstrates by judgment or other agreement that the Defendant has an obligation to pay Enrollee’s medical expenses.
We expect to see more cases addressing the requirements that must be met for an MAO to proceed with a private cause of action for double damages under the MSPA. As always, we will keep you updated on the latest developments on this issue, as well as all decisions related to the Medicare Secondary Payer Act.