“Where They’ve Been and Where They’re Going: Secondary Payer Lawsuits Involving Medicare Advantage Organizations”
Now that approximately 19 million Medicare beneficiaries (or 33 percent) are using Medicare Advantage Plans (MA Plans) to deliver their Medicare benefits, the certainty that tort liability settlements generally brought liability insurers in decades past has waned. The Medicare Secondary Payer Act (the MSP Act), codified in 42 U.S.C. §1395y(b), is the reason for this change.
The MSP Act prohibits Medicare from paying medical expenses when another payer is responsible for the payment. Based on recent developments in the law, courts have authorized Medicare Advantage organizations (MAOs)—private sector managed care organizations that contract with the U.S. government to provide MA Plans to Medicare beneficiaries—to transform these once-settled tort liability claims into new actions that seek not just reimbursement for paid-out medical expenses, but also an award of double damages. A liability insurer that settled and paid a claim once now is potentially liable for paying the same claim again—two more times, years later.
Read more in this article published in the May 2018 issue of DRI’s For The Defense.