Stroock Special Bulletin
"The Eleventh Circuit Expands Private Insurers’ Exposure for the Reimbursement of Medicare Payments Under the Medicare Secondary Payer Act"
This Stroock Special Bulletin examines two cases recently decided by the Eleventh Circuit Court of Appeals – Humana Medical Plan, Inc. v. Western Heritage Insurance Company, 832 F.3d 1229 (11th Cir. 2016), and MSP Recovery, LLC v. Allstate Insurance Company et al., 835 F.3d 1351 (11th Cir. 2016) – which expand private insurers’ exposure for the reimbursement of Medicare payments under the Medicare Secondary Payer Act (“MSP”).
In Western Heritage, the Court held that the MSP gives Medicare Advantage Organizations (“MAOs”) a private cause of action to seek double damages against private insurers that fail to reimburse MAOs for Medicare payments when the private insurers have demonstrated a responsibility for those payments. Western Heritage merits special attention because an insurer’s settlement of a claim brought by a Medicare enrollee could subject the insurer to double damages if the MAO is not reimbursed for Medicare payments – even if the claimant promises to satisfy any Medicare liens.
In Allstate, the Eleventh Circuit held that a contractual obligation alone – such as a policy offering personal injury protection no-fault insurance – can demonstrate a private insurer’s responsibility for the reimbursement of Medicare payments. This holding may be limited to no-fault insurance.