UPDATE: Eleventh Circuit Court of Appeals Upholds District Court Decision Giving Medicare Advantage Plans a Private Cause of Action Under the MSP
February 27, 2018
As you will recall, in August 2016, the United States Court of Appeals for the Eleventh Circuit, following the lead of the Third Circuit’s decision in In re Avandia, affirmed the decision of the lower court in Humana Med. Plan v. W. Heritage Ins. Co., 832 F.3d 1229 (11th Cir. 2016). In an opinion written by Judge Black, the Eleventh Circuit determined that Humana, as a Medicare Advantage Organization (MAO), had a private cause of action under the Medicare Secondary Payer Act (MSP) and was entitled to recover double damages as a result of Western Heritage Insurance Company’s (“Western”) failure to reimburse Humana for medical expenses advanced on behalf of the plaintiff. The Eleventh Circuit so held despite the fact that the plaintiff in the case had agreed to be responsible for Medicare liens as part of the settlement agreement. The Eleventh Circuit’s decision indicated that, similar to the reimbursement rights of Medicare, the reimbursement rights of an MAO will not be bound by the terms of a settlement agreement. Judge Pryor dissented.
Following this decision, the judges in active service on the Eleventh Circuit Court of Appeals conducted a poll as to whether the matter should be reheard en banc. A majority of voting judges voted against granting a rehearing, and it was ordered that the case would not be reheard en banc. Humana Med. Plan v. W. Heritage Ins. Co., (2018 U.S. App. LEXIS 1939). This latest decision was issued on January 25, 2018. Judge Tjoflat dissented. Accordingly, the decision from the lower court stands, and MAOs retain rights to double damages under the MSP in the Eleventh Circuit.
Given the potential for double damages, it is important to ensure that MAO liens are resolved. Under the decision of the Eleventh Circuit and other federal courts, MAOs, like Medicare, can seek recovery from the defendant/insurance carrier if any liens are not resolved, even if the claimant has agreed to be responsible. Please let us know if you would like our assistance in determining whether a claimant is enrolled in a MAO and in addressing MAO liens. We would be happy to help!