On August 8, 2016, the United States Court of Appeals, in Humana Medical Plan v. Western Heritage, held that the Medicare Secondary Payer Act (“MSP Act”) “clearly indicates” that a Medicare Advantage Organization (“MAO”) may bring a private cause of action” against a primary plan, which completely supports MSP Recovery Law Firm’s (“MSP Recovery”) long-held basis for seeking reimbursement under the MSP Act.
MSP Recovery, a specialist in the recovery services for numerous MAOs, filed its Amicus Curiae Brief in Western Heritage to assert its prevailing interest in the appeal. MSP Recovery explained that “a private cause of action exists for any private plaintiff when a primary plan fails to provide payment” and, as such, the court agreed. Particularly, in Western Heritage, an MAO sued a primary plan to receive reimbursement for funds paid on its enrollee’s behalf after she slipped and fell on a property. The MAO argued that “the MSP private cause of action is unambiguous and broadly permits any private party with standing (including an MAO) to sue a primary plan.” While considering the MAO’s motion for summary judgment, the court considered three issues, whether: (1) the MAO is a primary plan; (2) the MAO made payment or reimbursement; and (3) the amount of damages incurred.
The court explained that since the MAO was the enrollee’s liability insurer, it was, therefore, the primary payer. Furthermore, although the primary plan argued it lacked constructive knowledge of the MAO’s payment, the court ruled that the primary plan “had actual knowledge of [the MAO’s] claim,” since the primary plan “had the ability to discern the precise nature of [the enrollee’s] health insurance coverage.” Also, unless the enrollee chose to contest the amount owed to the MAO, through an administrative appeals process, the primary plan could not contest it. The court reasoned that the amount the MAO “may recover is[,] therefore[,] fixed,” as the enrollee failed to challenge the amount owed. Hence, on all issues, the court further supported MSP Recovery’s overall objective and proposition, which is any plaintiff that fails to receive reimbursement from a primary plan, after it paid an enrollee’s medical expenses, may seek relief through a private cause of action for double damages under the MSP Act.