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Second Circuit Finds Section 111 Reporting Does not Establish Liability


In MSP Recovery Claims, Series LLC v. Hereford Insurance Co., 2023 WL 2993857 (2nd Cir. April 19, 2023), the United States Second Circuit Court of Appeals recently delivered a noteworthy ruling while affirming the dismissal of a suit brought by a Medicare Advantage Plan (MAP) assignee against a no-fault carrier for "double damages" under the Medicare Secondary Payer's (MSP) private cause of action statute.


MSP Recovery, the plaintiff in this case, was an assignee of EmblemHealth, a Medicare Advantage Plan (MAP), who sued the defendant, Hereford Insurance Company, for an alleged failure to reimburse the MAP for medical care provided to an enrollee, as well as multiple other claims. The district court initially dismissed the plaintiff's claim on standing grounds, which the Second Circuit later affirmed.


In this specific case, the court rejected the plaintiff's argument that the insurer's Section 111 report constituted an admission of liability for the claim. The Second Circuit’s interpretation of the Section 111 reporting statute (42 U.S.C. § 1395y(b)(8), et. seq.) determined that such reporting obligations are mandatory, regardless of an admission or determination of liability. The court's ruling emphasized that an insurer's report under Section 111 does not establish liability for the claim reported.


Furthermore, the court rejected the plaintiff's claim that the insurer's report of "on-going responsibility for medicals" based on CMS's Section 111 User Guide established liability.


In conclusion, the Second Circuit's decision clarifies the limitations of Section 111 reporting in establishing liability and sets a precedent for future cases in the Second Circuit involving private cause of action claims based on such reporting.


Overall, this ruling may have implications for future private cause of action claims based on Section 111 reporting in the Second Circuit, and it could be interesting to see how parties use this analysis to defend conditional payment claims when CMS or a Medicare Advantage Plan argue that Section 111 reporting establishes liability for reimbursement.

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