In a decision filed in MSP Recovery, LLC v. Allstate, et. al on August 30, the Eleventh Circuit Court of Appeals concluded that the existence of a primary plan insurance company’s contractual obligation to pay medical expenses is enough to trigger the demonstrated responsibility prerequisite under the Medicare Secondary Payer (MSP) Act. As a result, Medicare Advantage Plans (MAPs) may sue a primary plan insurance company for a double damages under the MSP Act private cause of action. MAPs can do so without a judgment or settlement from a separate proceeding finding the primary plan responsible.
Seven consolidated cases were brought by MAP assignees MSP Recovery LLC and MSPA Claims 1 LLC against certain primary plan insurance companies covering Florida vehicle owners and operators. In each case, a person was injured in a vehicle accident and was covered by one of the defendants’ personal injury protection (PIP) no-fault insurance and also enrolled in a Florida Healthcare Plus MAP. The plaintiffs alleged Florida Healthcare Plus was a secondary payer under the MSP and that the defendants were obligated to pay some of the medical costs related to the accidents.
At first, all the cases were dismissed when the Court relied on precedent from Glover v. Liggett Group, Inc. According to the Glover decision, a judgment or settlement is needed to identify a primary plan’s responsibility to pay for a person’s medical bills associated with a liability claim. In the Eleventh Circuit Court of Appeals, however, the plaintiffs urged Glover should only apply when that responsibility arises from a tort case. Furthermore, the plaintiffs claimed that merely alleging the existence of a primary plan’s contractual obligation to pay is sufficient in demonstrating its responsibility under the MSP Act.
The Court ultimately decided the MSP permits demonstration of responsibility through contractual obligation, as it falls under the umbrella of “other means” as noted in 42 U.S.C. § 1395y(b)(2)(B)(ii), which states adequate demonstration can be made through “… a judgment, a payment conditioned upon the recipient’s compromise, waiver or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan’s insured, or by other means.”
Ensuring Medicare Compliance in Every Case
A complex situation arises when MSPs are involved during settlement – now more than ever. This groundbreaking decision has the potential to affect liability claims involving Medicare beneficiaries, putting even more pressure on settling parties. It’s yet another reason to have a plaintiff-loyal settlement expert reviewing Medicare compliance with every relevant liability claim.
For example, a Medicare set-aside account may be needed when a Medicare beneficiary receives a settlement from an injury claim. The set-aside protects the claimant’s future Medicare rights and avoids the possibility of improper consideration leading the government to discontinue health benefits.
Milestone Consulting is well-versed in navigating and complying with the MSP Act. We provide clients with all possible options regarding Medicare and beyond, and we implement the best course of action to ensure compliance with government regulations. Talk with a settlement expert today.
A West Point graduate where he served as captain and military aviator, John Bair continues his commitment to our country through his efforts within the settlement planning industry. He has represented families of victims lost in the Flight 3407 crash, offered pro bono services to the families of 9/11 victims and drafted the first consumer protection bill for plaintiffs (H.R. 3699).