CMS Issues Updated NGHP User Guide; Florida District Court Analyzes the Applicable Statute of Limitations for MSP Double Damages Claims
Two new Medicare Secondary Payer updates (a CMS User Guide update and interesting MSP decision out of Florida) were issued this week which are covered briefly below.
Update to CMS NGHP User Guide
On April 5, 2021, the Centers for Medicare & Medicaid Services (CMS) issued an updated NGHP User Guide which can be found here. CMS has now defined clearly in Section 6.5.1 of the Guide regarding periodic payments and one-time settlements as it pertains to ORM. Responsible Reporting Entities (RREs) should find the clarified language in 6.5.1 of the Guide helpful which states now:
“In situations where the applicable workers’ compensation or no-fault law or plan requires the RRE to make regularly scheduled periodic payments, pursuant to statute, for an obligation(s) other than medical expenses, or a one-time “indemnity-only” payment or settlement for obligation(s) other than medical expenses is made to or on behalf of the claimant, the RRE does not report these periodic payments or one-time settlements as long as the RRE separately assumes/continues to assume Ongoing Responsibility for Medicals (ORM) and reports this ORM appropriately. Otherwise, such scheduled periodic payments or settlements are considered to be part of and are reported as ORM. The periodic payments or one-time settlement to compensate for lost wages are not reported as TPOCs, but may be included to compute the total TPOC amount. (Note: TPOC computation is outlined in Section 6.4.) In summary, under the aforementioned circumstances, one claim report record is submitted reflecting ORM.”
In other words, while an RRE maintains ORM, periodic payments or one-time settlements made during that time are not separate TPOCs. However, when ORM is terminated and a TPOC is later reported, those one-time settlements may be included to compute the TPOC amount.
Florida District Court Analyzes the Applicable Statute of Limitations for MSP Double Damages Claims
In a Summary Judgment decision out of the Northern District of Florida, entitled MSPA Claims 1, LLC v. Tower Hill Prime Ins. Co., 2021 U.S. Dist. LEXIS 66921 (March 31, 2021) MSPA Claims’ suit for double damages pursuant to the MSP Private cause of action, 42 USC § 1395y(b)(3)(A) was dismissed as untimely. As brief background, MSPA Claims was assigned claims by a defunct Medicare Advantage Organization (MAO) known as FHCP, and via its Complaint alleged a representative Medicare claim in which it claimed Tower Hill insurance company allegedly failed to reimburse the MAO conditional payments.
As the representative claim was settled and reported in 2012, but this lawsuit not filed until 2018, the question before the Court was the applicable statute of limitations for such MSP Private cause of action claims. While the Court noted the MSP’s general statute of limitations as three (3) years under 42 USC § 1395y(b)(2)(B), it found that statute of limitations as inapplicable specific to the private cause of action provision. Finding that all parties agreed that the MSP private cause of action was silent as to a specific statute of limitations, the Court noted that it could borrow from similar statutory schemes as to an appropriate statute of limitations period.
MSPA Claims argued that the Court should adopt the False Claims Act statute of limitations period of six (6) years, as one Court had similarly adopted in the Second Circuit. On the other hand, defendant Tower Hill argued that the applicable statute of limitations was Florida’s four-year limitations period located at §§95.11(3)(f), 95.11(3)(k), and 95.11(3)(n), which cover actions “founded on a statutory liability involving a "legal or equitable action on a contract, obligation, or liability not founded on a written instrument," or an "action for a statutory penalty or forfeiture," respectively.
If a four-year limitations period applied, then MSPA Claims’ claim would be too late and the Complaint must be dismissed, which is ultimately what the Court concluded on Summary Judgment. The Court was persuaded by Tower Hill’s argument that the Florida Statute of limitations of 4 years would apply as to this suit, and that the four-year limitations period provided under Florida law was not so short to undermine federal policy. Further, MSPA Claims’ arguments behind the FCA’s statute of limitations applicability was so broad such that it could cover nearly any Federal Action.
Decisions like these should be watched. Unless clarified, the MSP private cause of action statute of limitations could result in case law variances state-by-state and become subject to a wide variance of interpretation in various jurisdictions. No doubt, MSPA Claims/MSP Recovery and other MAOs are continuing to file suits like these nationwide. Diligence in MSP Best Practices and Traditional Medicare/Medicare Advantage/Part D conditional payment practices is highly recommended.
