Humana Strikes Again Against WC Insurer Pursuant to the MSP Private Cause of Action
In a recent Complaint filed in the U.S. District Court for the Southern District of Florida entitled Humana v. Associated Industries Insurance Company, Humana has filed a lawsuit for declaratory judgment and monetary damages to recover conditional payment amounts allegedly due to Humana Medicare Advantage (Plaintiff) against Associated Industries Insurance Company (Defendant). Defendant provided workers’ compensation coverage to Arnold Hariton (Injured Worker) (Plaintiff’s Medicare Advantage enrollee) who was employed by DNP Associates, Inc.
The specific action/count by Plaintiff lodged against Defendant is a private cause of action under the Medicare Secondary Payer Act (MSP) for double damages pursuant to 42 U.S.C. § 1395y(b)(2). The underlying facts of the case involved Injured Worker falling from a ladder while maintaining a light fixture at work. At the time of the accident, Injured Worker was enrolled in Humana Medicare Advantage which paid for his workplace injury medical needs. Plaintiff alleges that it paid at least $26,214.83 in conditional payments as it relates to the Injured Worker’s workplace injury.
Plaintiff learned of the workers’ compensation claim after Injured Worker’s attorney contacted Plaintiff in 2019 to notify Humana of his representation of Injured Worker. Plaintiff claims that Defendant was aware that Humana had made conditional Medicare payments on Injured Worker’s behalf because Humana sent Defendant notices of its Medicare lien rights in April and September 2019. Plaintiff became aware that Injured Worker settled his claim with Plaintiff in October 2019, in which Defendant allegedly acknowledged its primary payer status under the MSP.
Further, Plaintiff alleges that although Injured Worker was responsible for reimbursing Plaintiff within 60 days of Defendant’s settlement payment, pursuant to 42 C.F.R. § 411.24(i)(1). Citing the Humana Med. Plan, Inc. v. Western Heritage Ins. Co. case[1], Plaintiff alleges that even though Defendant has already paid Injured Worker, Defendant remains responsible for reimbursing Humana.
Additionally, Plaintiff via its Complaint is demanding double damages in an amount to be determined under the formula set forth under 42 C.F.R. § 411.37 in accordance with 42 U.S.C. § 1395y(b)(3)(A). In summary, the Plaintiff, Humana, seeks the following relief: (1) Double damages under 42 U.S.C. § 1395y(b)(3)(A); (3) Pre- and post-judgment interest; and (4) Such other relief the Court deems proper.
Commentary:
As mentioned in our prior blog on MSP Predictions for 2021, these types of MSP double damages private cause of actions for double damages are continuing to increase and are a foreboding of more to come in 2021 and beyond. Key take-aways:
1. Here, Injured Worker’s attorney notified Humana of its representation of the Injured Worker and thereby notified Humana Medicare Advantage the existence of a workers’ compensation primary payer from which to seek reimbursement. Therefore, even though a Section 111 report may not have occurred yet by Defendant, the Medicare Advantage plan knew of the primary payer and alerted it as such. Self-reports by Medicare beneficiary attorneys to traditional Medicare and Medicare Advantage Plans are not uncommon.
Attorneys representing Medicare beneficiaries have a stake in the game to ensure that the Medicare program to not incur personal liability as well. See Humana v. Paris Blank LLP, in which Plaintiff’s counsel’s firm was sued for double damages under the MSP private cause of action for allegedly failing to reimburse Humana conditional payments made on behalf of the attorney’s client. Primary payers should be aware of the possibility of a self-report to Medicare/Medicare Advantage, and the fact that it may be the first alert to Medicare of a secondary payer. Further, it is possible and not uncommon that the injuries/ICD 10 codes reported by the attorney may be slightly different from the primary payer’s Section 111 report, which may be problematic in the conditional payment recovery and dispute process. It is best for primary payers to control all reports to Medicare to ensure consistency as it pertains to the Medicare beneficiary’s specific injury(ies).
2. Conditional payment letters sent by a Medicare Advantage plan to primary plans should not be ignored, and as alleged in the Complaint, pursuant to 42 CFR § 411.24, Medicare/Medicare Advantage can pursue the primary payer entity even though it has already paid the Medicare beneficiary and pursue double damages under the MSP private cause of action pursuant to 42 U.S.C. § 1395y(b)(3)(A).
3. Release language holding the Injured Party and/or their attorney for reimbursing Medicare/Medicare Advantage is not a defense to a claim by the Medicare program for conditional payment reimbursement. Medicare has an absolute right to reimbursement under the Medicare Secondary Payer Act, despite release language.
4. Lastly, there is no clear delineated process for Medicare Advantage conditional payment recoveries. Each Medicare Advantage plan is charged with pursuing its own recoveries (some are more proactive than others) and Medicare Advantage plan conditional payments cannot be resolved with the Centers for Medicare & Medicaid Services (CMS) and their recovery contractors. They must be resolved with the Medicare Advantage plan directly and each one has a different process of recovery. Either way, known Medicare Advantage plan conditional payment recoveries should be addressed or a double damages lawsuit as discussed herein is a possibility. Additionally, even if in receipt of a $0 conditional payment letter from CMS, settling parties should determine whether a Medicare Advantage plan may have paid for the injured party’s medical treatment.
For a copy of the Complaint or for questions, please contact me at heather@sandersoncomp.com.
[1] 832 F.3d 1229 (11th Cir. 2016).
