Eleventh Circuit Allows Private Cause of Action for Entities Affiliated with Medicare Advantage Plan
In MSPA Claims 1, LLC v. Liberty Mutual Fire Insurance Company, No. 18-13312 (11th Cir. 2020), the Eleventh Circuit Court of Appeals held that certain entities that are affiliated with Medicare Advantage Plans and have suffered a financial loss can assert a private cause of action for double damages against primary payers under the Medicare Secondary Payer Act. The case involved claims asserted by MSP Recovery Claims, Series LLC and MSPA Claims 1, LLC as assignees of management services organizations that had contracted with Medicare Advantage Plans to assist with healthcare and administrative services. MSP Recovery Claims, Series LLC had also asserted claims as an assignee of an independent physician association that had contracted with a Medicare Advantage Plan with the physician association responsible for paying medical expenses for Medicare beneficiaries.
Prior to the court’s decision, the U.S. District Court for the Southern District of Florida had dismissed the claims asserted, holding that MSP Recovery Claims, Series LLC and MSPA Claims 1, LLC could not assert a private cause of action under the Medicare Secondary Payer Act because they were not asserting claims directly on behalf of Medicare Advantage Plans but rather on behalf of entities affiliated with Medicare Advantage Plans. In reversing the district court’s decision, the Eleventh Circuit noted that the only limitation that federal circuit courts have placed on the private cause of action is that it is not a qui tam statute, meaning that it does not allow a plaintiff to assert claims when the plaintiff has no connection to the case. Further, the Eleventh Circuit found that the private cause of action is broad enough to allow entities that are affiliated with Medicare Advantage Plans and have suffered damages to pursue claims. The court also noted that allowing such entities to assert a private cause of action would serve the purpose of financially benefiting Medicare Advantage Plans and in turn strengthening the Medicare program. As such, the court vacated the dismissals of the plaintiffs’ lawsuits and remanded the case to the district court for further proceedings.
The Eleventh Circuit’s decision opens the door for other entities affiliated with the Medicare program and Medicare Advantage Plans to assert a private cause of action for double damages when such entities have suffered a financial loss as a result of an alleged failure of the primary payer to provide for appropriate payment or reimbursement. Given the aggressive efforts of MSP Recovery and related entities to seek double damages, it is critical for primary payers to ensure that conditional payment claims and Medicare Advantage Plan liens are resolved when appropriate and to develop policies and procedures for ensuring such claims are resolved. If you have any questions about identifying and resolving conditional payment claims and Medicare Advantage Plan liens, please let us know and we will be happy to help.