Synergy out flanks Rawlings and reduces self-funded ERISA claim by 50%

This case involved a self-funded ERISA plan participant who was injured in a motor vehicle accident.  The plaintiff was injured when the  car in which he was riding was rear-ended by the tortfeasor.  The plaintiff incurred significant injuries which resulted in a healthcare subrogation claim, in the amount of $26,669.18, being asserted by the self-funded ERISA plan.  The plaintiff’s attorney engaged Synergy Lien Resolution Services to resolve the subrogation/reimbursement claim that was being prosecuted by The Rawlings Company on behalf of Aetna and the employer group.  Rawlings is a third party recovery vendor for Aetna, but despite this status they attempted to avoid dealing directly with Synergy by advising plaintiff’s counsel that they “limited communication” with  lien resolution groups and offered a nominal reduction.  Wise plaintiff’s counsel did not fall for this ruse.  Synergy then negotiated directly with the Plan Administrator and within three (3) weeks had secured a reduction of 50% from Plan Administrator. This was a savings of $13,334.59 to the injured plaintiff.

What In The World Is FEHBA And How Do I Deal With Their Reimbursement Claim?

By Director of Lien Resolution

The Federal Employees Health Benefits Act (FEHBA) of 1959 (5 U.S.C. 8901 et seq.) is the largest employer-sponsored group health insurance program in the world, covering more than 8 million federal employees, retirees, former employees, and family members.  FEHBA Plans are contracts between the insurance carrier and the United States Office of Personnel Management (OPM).  Most federal employees are eligible to enroll in FEHBA Plans, although regulations exclude certain persons and positions (such as employees of the Tennessee Valley Authority and workers paid on a contract or piecework basis). After the determination of eligibility, the employee selects from available plans, many of which restrict enrollment by geographic region or category of service (e.g. the Foreign Service Benefit Plan and the Rural Carrier Benefit Plan).

FEHBA contains a preemption provision which provides that certain contract terms in health insurance plans “shall” preempt state or local law.  The language of a FEHBA Plan preempts state law, whether consistent or inconsistent with federal plan provisions, on matters of “coverage or benefits” (5 U.S.C. 8902(m)(1)).  However, the United States Supreme Court rendered an important decision limiting preemption under FEHBA in the case of Empire HealthChoice Assurance, Inc. v. McVeigh,   547 U.S. 677,   126 S. Ct. 2121 (2006).  In McVeigh, The Supreme Court declined to exercise subject matter jurisdiction, holding that Section 8902(m)(1) does not raise a federal question to support federal jurisdiction. The Court noted it was undisputed that FEHBA did not expressly create a federal right of action, and the carrier’s right to reimbursement arose by contract, not federal law.  The Court noted that FEHBA’s preemption clause displaced state law on issues relating to “coverage or benefits,” but

“[t]he Act contains no provision addressing the subrogation or reimbursement rights of carriers”

McVeigh at 683

therefore,

“No law opens federal courts to carriers seeking reimbursement from beneficiaries or recovery from.”

 McVeigh at 687

  The Court continued its analysis by stating in unequivocal terms,

“[I]f Congress intends a preemption instruction completely to displace ordinarily applicable law, it may be expected to make that atypical intention clear. Congress has not done so here.”

McVeigh at 698

“[A] reimbursement of the kind Empire here asserts stems from a personal injury recovery, and the claim underlying that recovery is plainly governed by state law. We are not prepared to say that under 8902(m)(1) an OPM-BCBS contract term would displace every condition state law places on that recovery.”

McVeigh at 698

The Court reasoned that along with the reimbursement right created in the FEHBA plan documents there was also a subrogation right which was mingled with the reimbursement right.  Had the FEHBA Plan chosen to assert it subrogation right then,

“no access to a federal forum could have been predicated on the [FEHBA] contract right. The tortfeasors’ liability, whether to the insured or the insurer, would be governed not by an agreement to which the tortfeasors are strangers, but by state law.”

McVeigh at 698

Therefore, since there was held to be no federal cause of action to enforce such contract terms, any claims by FEHBA carriers for such reimbursement would have to be presented in state court.

“In sum, the presentations before us fail to establish that §8902(m)(1) leaves no room for any state law potentially bearing on federal employee-benefit plans in general, or carrier-reimbursement claims in particular. Accordingly, we extract from §8902(m)(1) no prescription for federal-court jurisdiction.”

McVeigh at 698

This rationale not only made it clear that FEHBA Plan’s must bring reimbursement actions in state court but also that state laws which impact that recovery right can be applied.  In the wake of McVeigh, other federal circuit courts have issued opinions rejecting preemption of various state law provisions governing tort recoveries.  In Blue Cross Blue Shield of Ill v. Cruz,  495 F.3d 510 (7th Cir. 2007), the court rejected preemption of the state’s “common fund” rule and in Van Horn v. Arkansas Blue Cross, 629 F. Supp 2d 905 (D. Ark. 2007), the court rejected preemption of the “made whole” doctrine.  (See also, Morris v. Humana Health Plan, Inc., 829 F.Supp2d.848 (W.D. Missouri, 2011); Calingo v. Meridian Res. Co. LLC, 2011 U.S. Dist. Lexis 83496 (S. D. N.Y. 2011); Cedars-Sinai Med. Ctr. V. Natl League of Postmasters of the U.S.,  497 F.3d 972 (9th Cir. 2007)).

To combat the rising tide of Federal Circuits supporting the above rationale, the U.S. Office of Personnel Management (OPM) issued an “FEHB Program Carrier Letter,” dated June 18, 2012 (the “OPM Letter”), which was sent to BCBSA and all other insurance carriers administering plans under FEHBA.  OPM expressed its official position that FEHBA preempts state laws on issues of subrogation and reimbursement, and instructed carriers such as BCBSA to “utilize this correspondence as needed in your recovery efforts.” The OPM explained its reasoning as follows:

“FEHB Program contracts … require enrollees to reimburse the plan in the event of a third party recovery. Carriers are required to seek reimbursement and/or subrogation recoveries in accordance with the contract. The funds received by [carriers] from these recoveries are required to be credited to [a fund] established by 5 U.S.C. § 8909, held by the Treasury of the United States, and … subrogation and reimbursement recoveries serve to lower subscription charges for individuals enrolled in the Federal Employees Health Benefits Program. The carrier’s right to subrogation and/or reimbursement recovery is both a condition of, and a limitation on, the payments that enrollees are eligible to receive for benefits; the carrier’s contractual obligation to obtain them necessarily relates to the enrollee’s coverage or benefits (including payments with respect to benefits) under the FEHB program. These recoveries therefore fall within the purview of the FEHBA’s preemption clause, and supersede state laws that relate to health insurance or health plans.”

Despite the fact that all the legal authority cited in the “OPM Letter” by John O’Brien the Director Healthcare and Insurance for the OPM predates McVeigh, one federal district court was persuaded.  In Calingo v. Meridian Res. Co., LLC, 2013 WL 1250448 (S.D.N.Y. 2013) (Calingo II), the Court gave deference to the OPM Letter noting that reimbursement and subrogation play an integral role in the overall administration of the Federal Employees Health Benefits Program and thus “relate to” the coverage and benefits of those insured under the program. Specifically, the Court noted that the OPM Letter explains that “subrogation and reimbursement recoveries serve to lower subscription charges for individuals enrolled in” FEHBA Plans, because monies recovered under contractual subrogation and reimbursement provisions are returned to the government and used to lower the subscription charges of all FEHBA enrollees. Therefore, the Court acknowledged that subrogation and reimbursement provisions in FEHBA benefits Plans directly reduce the amount of money enrollees pay for their health insurance, and presumably affect the benefits they receive.

In working to reduce or eliminate the amount your client must repay his FEHBA plan, plaintiff’s counsel should expect to receive both the “OPM Letter” and Calingo II from the recovery vendor. Despite the Southern District of New York’s reliance on the self-serving “OPM Letter” the rational of McVeigh and is progeny is still controlling.  Claims for reimbursement by a FEHBA Plan must be brought in state court and state laws which bear on reimbursement rights of collateral sources can still be applied.

The first step in addressing the purported recovery rights of the FEHBA Plan should be to download and review the correct plan document.  All FEHBA Plans can be viewed and downloaded on the OPM’s website at http://www.opm.gov/healthcare-insurance/healthcare/plan-information/.

This may address many issues such as if the particular plan allows for a reduction to reflect attorney fees.  Secondly plaintiff’s counsel will need to obtain and audit the claim’s summary associated with their client’s specific date of loss.  As is often the case, the claim’s summary is likely to include charges which are unrelated to the personal injury action.  Finally, the plaintiff’s attorney should argue the rationale of McVeigh and use state collateral source laws to diminish or eliminate the FEHBA Plan’s reimbursement claim.

If you need assistance with a FEHBA lien reduction issue, Synergy can help.  We specialize in reducing these liens so contact us today for a free assessment.

Add the Administrative Services Agreement to your ERISA Document Request

By Director of Lien Resolution

An Administrative Services Agreement between a Plan Administrator and a Claims Administrator may fall within the purview of a document request under ERISA 29 U.S.C. § 1024(b)(4), with non-compliance subject to the penalty assessment authorized under ERISA 29 U.S.C. § 1132(c).   As Synergy has long advocated, one of the keys to properly defending against an asserted subrogation or reimbursement claim from an ERISA plan is making requests to the plan administrator.  ERISA places certain responsibilities upon the Plan Administrator to assist with the proper management of ERISA qualified employee welfare-benefit plans and to promote communication with the plan beneficiaries.

One of the major responsibilities of the plan administrator, in so far as dealing with providing information to beneficiaries, is contained in 29 U.S.C. 1024(b)(4).  This section of the statute deals with requests for information made upon the plan administrator:

29 U.S.C. 1024(b)(4)– The administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated summary plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated.

 

In Grant v. Eaton, S.D.Miss, Civil Action No. 3:10CV164TSL-FKB, decided 2/6/13, there was an allegation that the Administrative Services Agreement between the third party claims administrator and the plan administrator contained a provision that purports to grant discretion as well as authority from the plan administrator to the claims administrator.  Due to this allegation of the transfer of certain rights from the Plan to the Claims Administrator, the court found that the Administrative Services Agreement was not excluded from the 29 U.S.C. 1024(b)(4) requests and the failure to provide the contract would subject the plan to penalties under 29 U.S.C. § 1132(c)(1)(B).

 

The court further reasoned that the Administrative Services Agreement contained information on “who are the persons to whom the management … of his plan … have been entrusted.” Hughes Salaried Retirees Action Comm., 72 F.3d 686, 690 (9th Cir. 1995). As a result, the Court found that the Administrative Services Agreement was subject to the ERISA disclosure requirements as it is a document “that restrict[s] or govern[s] a plan’s operation.” Shaver v. Operating Eng’rs Local 428 Pension Trust Fund, 332 F.3d 1198, 1202 (9th Cir. 2003).

 

The Southern District of Mississippi relied upon the rationale of other courts who had evaluated whether or not a 29 U.S.C. 1024(b)(4) request included Administrative Services Agreements.  In Michael v. American International Group, Inc., No. 4:05CV02400 ERW, 2008 WL 4279582 (E.D. Mo. 2008), the court wrote at length on the issue, stating, in pertinent part,

 

“The proper inquiry for the Court to determine whether the contract at issue should have been disclosed is to consider whether the administrative services agreement “allow[s] ‘the individual participant [to] know … exactly where he stands with respect to the plan-what benefits he may be entitled to, what circumstances may preclude him from obtaining benefits, what procedures he must follow to obtain benefits, and who are the persons to whom the management and investment of his plan funds have been entrusted.”

 

(See also, Hughes Salaried Retirees Action Comm. v. Administrator of the Hughes Non-Bargaining Retirement Plan, 72 F.3d 686, 690 (9th Cir. 1995)).

 

The court also looked to the Eleventh Circuit and noted that the Eleventh Circuit has found that the Administrative Services Agreement may be subject to disclosure under ERISA not just as “other instruments under which the plan is established or operated” but as a “contract” pursuant to 29 U.S.C. § 1024(b)(4). Heffner v. Blue Cross and Blue Shield of Alabama, Inc., 443 F.3d 1330, 1343 (11th Cir. 2006). The Eleventh Circuit succinctly stated that “[a] contract between a group and an insurer such as Blue Cross is specifically listed as an ERISA document which may control a plan’s operation.”

 

The court also recognized Fisher v. Metropolitan Life Ins. Co., 895 F.2d 1073, 1077 (5th Cir. 1990) which noted that the Plan, by its own terms, contemplated delegation of the Plan Administrator’s responsibilities to a third party administrator “arguably incorporat[ed] the Administrative Services Agreement … as a further delineation of how the Plan would in fact operate”. Which meant disclosure of the Administrative Services Agreement was required under a 29 U.S.C. 1024(b)(4) request.

 

Though there is case law which stands for the opposite conclusion reached by the Southern District of Mississippi, the distinction seems to be one of degree.  If the Administrative Services Agreement transfers any authority or discretion, or there are allegations that it does, from the Plan Administrator to another party then under the rationale expressed by the courts above that agreement needs to be provided in response to the beneficiary’s 29 U.S.C. 1024(b)(4) request.  Similar to the requirement created by Cigna v. Amara, 131 S.Ct. 1866 which necessitates a comparison between the Summary Plan Description and the Master Plan Document, there is need to review the Administrative Services Agreement to determine if a transfer of authority or discretion has taken place.  Under the cases cited, above failure of the Plan Administrator to provide the Administrative Services Agreement so that this review can be conducted could subject the plan to penalties under 29U.S.C. § 1132(c)(1)(b) & 29 CFR § 2575.502c-1.

 

Forcing a Plan Administrator to fully comply with its obligations under 29 U.S.C. 1024(b)(4) is one of the few ways to exert pressure on a self-funded ERISA plan who is attempting to enforce purported recovery rights.  Understanding that neither the Plan Administrator, nor the Claims Administrator, wants to provide their Administrative Services Agreement can be used as a negotiation tool by the wise plaintiff’s attorney to reduce repayment. Get the documents your client is owed, or demand a discount from the Plan or recovery vendor.

 

Synergy can help with reduction or possibly elimination of ERISA liens.  Contact us today to see how we can help you.

Synergy’s executive team brings an unparalleled amount of experience to assist you at settlement

Synergy allows trial lawyers to focus on what they do best.  Our entire team is made up of experts who can help resolve the most complicated issues at settlement.  Synergy’s executive team brings an unparalleled amount of experience to assist you at settlement.  Jason Lazarus, Synergy’s CEO, is a former trial attorney practicing in the areas of workers’ compensation and medical malpractice.  He has an LL.M. in Elder Law as well as multiple professional certifications including Medicare Set Aside Consultant Certified.  To view Jason’s full bio click HERE.  Anthony Prieto, Synergy’s President, is a Certified Financial Planner with 15 years of financial services experience.  Anthony oversees Synergy’s settlement asset management group.  To view Anthony’s full bio click HERE.  Dan Alvarez, Synergy’s Vice President and General Counsel, is a former state attorney and plaintiff personal injury lawyer.  Dan has developed significant expertise in Medicare Secondary Payer compliance.  To view Dan’s full bio click HERE.  Josh Pettingill, Synergy’s Vice President of Medicare Secondary Payer compliance has an MBA and is a PHD candidate in Economics.  Josh’ oversees Synergy’s Medicare Secondary Payer compliance group and brings the unique insight of his certification as a Medicare Set Aside consultant.  To view Josh’s full Bio click HERE.  Dave Place, Synergy’s Director of Lien Resolution, is a former lead attorney for one of the largest ERISA recovery contractors in the United States.  Dave’s experience allows him to provide invaluable advice and guidance regarding tough lien resolution issues.  To view Dave’s full bio click HERE.  Rodd Santomauro, Synergy’s Chief Operations Officer, is a former plaintiff personal injury attorney and Executive Director of a national non-profit.  Rodd’s personal experience as a trial lawyer gives Synergy clients one more resource with spot on insight regarding the needs at settlement.  To view Rodd’s full Bio click HERE.  When the time comes, be prepared with a settlement services partner that can give you the edge you need.

Lien Res Success Story – Synergy use Medicare appeal process to secure a 100% reduction and $16,019.73 refund from MSPRC

Synergy successfully employed the Medicare appeals process and obtains a 100% reduction of Medicare’s Final Demand.  This case involved a Medicare beneficiary who was injured in a motor vehicle accident. The beneficiary suffered back injuries as well as injuries to both his hand and foot.  The injured beneficiary made a claim against the negligent tortfeasor and recovered a policy limits settlement in the amount of $25,000.00.  Medicare asserted
a lien for the conditional payments they had made in the amount of $30,801.35.  After the statutory reduction for procurement costs Medicare demanded repayment of the entire net settlement.  The injured beneficiary received zero.  Plaintiff’s counsel made the payment to MSPRC and engaged Synergy Lien Resolution Service.  After submitting consecutive appeals
Synergy was successful in having MSPRC agree to reduce the demand amount to zero ($0.00) and issue a refund in the amount of $16,019.73.  Had Synergy not aggressively used the Medicare appeals process, the injured beneficiary would have received nothing out of the settlement.

Breaking Down Florida’s New Proposed Bar Rule on Lien Resolution Outsourcing

Recently there has been some confusion caused by the Florida Bar introducing subsection (E) to Rule 4-1.5(f)(4) and its application to non-lawyer lien resolution companies.  Subsection (E) was approved by the FL Bar Board of Governors at their meeting on May 31st and the rule now awaits adoption by the Florida Supreme Court.  The confusion, though not unexpected, is clearly resolved by a plain reading of the comment to this proposed amendment.

The comment states that given the complex nature of certain “extraordinary” lien types (the Special Committee specifically mentions ERISA and Medicare conditional payments) it may be in the best interest of the client to engage another with significant experience in lien resolution and subrogation to maximize the plaintiffs’ net recovery.  In the event that the reasonable efforts of the personal injury attorney fail to resolve these liens a non-lawyer third party can be engaged.  Moreover, the comment expressly states that with the client’s written informed consent the cost associated with the engagement of the lien resolution expert can be billed as a “cost to the client”.

Our lien resolution unit specializes in the resolution of “extraordinary” liens and has policies and practices in place to ensure that Florida attorneys abide by the ethical guidelines that are being established under Rule 4-1.5(f)(4)(E).  To aid the personal injury attorney in compliance our intake packages include a specific and detailed informed consent form which clearly articulates the lien resolution services offered, and the fees charged for those services.

To view the amended rule adoped by the Florida Bar, click HERE

Synergy reduces self-funded ERISA plan by over 70% for a savings of $85,955.02

This case involved a Virginia plaintiff who was injured when a shower chair collapsed.  The plaintiff had a pre-existing hip injury which involved an implanted prosthetic.  The plaintiff retained the services of an attorney and was able to obtain $525,000.00 in settlement proceeds. The self-funded ERISA plan demanded full repayment of the $122,393.32 in medical benefits they provided and were unwilling to consider a reduction or listen to arguments about the pre-existing injury.  Plaintiff’s counsel engaged Synergy Lien Resolution Service to assist in the resolution of the ERISA plan’s reimbursement claim.  Despite the unfavorable law in the 4th Circuit, which was recently bolstered by U.S. Airways v.McCutchen, within two (2) weeks Synergy was able  to obtain a 70.2% reduction for a savings of $85,955.02.

Medicare Advantage Plan’s Statutory Recovery Rights – Private Cause of Action?

By Synergy Director of Lien Resolution

Medicare Advantage plans, otherwise known as Medicare Part C, have proven to be a hot and confusing topic for plaintiff’s attorneys over the past few years.  Recent rulings by the U.S. Supreme Court and 9th Circuit have done little to eliminate this confusion.  Instead, the latest case law has increased the complexity.  The Medicare Secondary Payer Act has been appropriately described as one of “the most completely impenetrable texts within human experience.” (See Cooper Univ. Hosp. v. Sebelius, 636 F.3d 44, 45 (3 Cir. 2010)) and the line of reasoning in the area of repayment to Medicare Advantage plans for benefits they have provided is a shining example of this sad truth.  The question boils down to the ability of the Medicare Advantage Organization (“MAO”) to utilize the Medicare Secondary Payer Act as the basis for enforcement of the MAO’s reimbursement rights.  It appears that due to the cross referencing between 42 U.S.C. §1395w-22(a)(4) and 42 U.S.C. § 1395y(b)(2)(A) the MAO plan is allowed to seek a repayment under 42 U.S.C. § 1395y(b)(3)(A).

Approximately twenty five percent (25%) of all Medicare beneficiaries, twelve million (12,000,000) people, are enrolled in MAO plans.  Medicare Advantage plans allow Medicare entitled individuals to receive healthcare services through a non-governmental organization, commercial insurance companies, who contract with the Centers for Medicare and Medicaid Services (“CMS”) to administer Medicare benefits. CMS pays a capitated monthly fee for the traditional Part A & B coverage and a separate amount for Part D, prescription drug benefits.  The MAO plan then is entitled to charge a premium to their enrollee.  These MAO plans must handle all aspects of benefit administration, including the recoupment of benefits paid that should have been paid by a “primary payer.”  It is this responsibility, and the mechanism for performing it, that has sparked much litigation and created significant uncertainty.

Over the past few years a consensus had been growing that MAO plans had no private right of action under the Medicare statutes, rather, they have state court contract claims. (See, Care Choices HMO v. Engstrom, 330 F.3d 786 (6th Cir. 2003); Nott v. Aetna U.S. Healthcare, 303 F.Supp.2d (E.D. Pa. 2004); Parra v. Pacificare, 2011 WL 1119736 (D. Ariz. 2011), Humana v. Reale, 2011 WL 335341 (S.D. Fla. 2011)).  However, this trend was derailed when the U.S. Supreme Court denied the petition for writ of certiorari in In re Avandia Marketing, Sales Practices and Product Liability Litigation, 685 F.3d 353 (3d Cir. 2012), called Avandia II.

In Avandia II the Third Circuit reasoned that the MSP should be read broadly and that the language of the Medicare Advantage Organization statute (42 U.S.C. §1395w-22(a)(4)) cross references the Medicare Secondary Payer Act’s (“MSP”) language (42 U.S.C. § 1395y(b)(2)(A)) which allows these plans to utilize the enforcement provision of the MSP (42 U.S.C. 1395y(b)(3)(A)).  The Third Circuit added to their opinion that the MAO plans are able to use the MSP since to deny them this ability would put them at a competitive disadvantage and moreover that the federal agency had enacted reasonable regulations in 42 C.F.R. § 422.108.  This regulation is relied on by the MAO plans in their recovery actions as it states that the MAO plans have the same recovery rights as traditional Parts A & B.  This decision was considered by most to be outside the trend in this area of law, but when the U.S. Supreme Court denied certiorari it became clear that MAO plans now had equal and parallel rights for a private cause of action as did traditional Medicare.

Immediately following this decision by the U.S. Supreme Court the Ninth Circuit weighed into the fray and issued its ruling in Parra v. Pacificare of Arizona, 2013 U.S. App. LEXIS 7861.  In Parra the MAO enrollee was struck by a car and later died from his injuries. Para’s wife and children (“Survivors”) made a demand for wrongful death damages, which under the Arizona Wrongful Death Statute did not include the debts or liabilities of the deceased.   PacifiCare, the MAO, argued that it had a private right of action under two provisions of the Medicare Act: (1) §1395w-22(a)(4) (the “MAO Statute); and (2) §1395y(b)(3)(A) (the Medicare Secondary Payer Act “Private Cause of Action”). The Ninth Circuit Court of Appeals rejected both arguments.

Unlike the Third Circuit the Ninth Circuit was not persuaded that the cross referencing of the MAO Statute (42 U.S.C. §1395w-22(a)(4) ) and the MSP (42 U.S.C. §1395y(b)(2)) created a federal cause of action.  The Ninth reasoned that this cross-reference simply explains when MAO coverage is secondary to a primary plan, but does not create a federal cause of action in favor of a MAO.

PacifiCare then attempted to invoke 42 C.F.R. §422.108(f) as support for its position to the creation of a private cause of action. This regulation confers on the MAO “the same rights to recover from a primary plan, entity, or individual that the Secretary exercises under the MSP regulations.” Here the Court found that “[l]anguage in a regulation may invoke private right of action that Congress through statutory text created, but it may not create a right that Congress has not”.  They elaborated by stating in clear terms that “[i]t is relevant laws passed by Congress, and not rules or regulations passed by an administrative agency, that determine whether an implied cause of action exists”.

Attempting to rely on Avandia II and the U.S. Supreme Court’s de facto endorsement of the Third Circuit’s holding, PacifiCare turned to the private cause of action created under 42 U.S.C.  §1395y(b)(3)(A). Here the Ninth Circuit chose not to take on the rationale of the Third Circuit and rather made a fact specific determination that the language of the statute applies only “in the case of a primary plan which fails to provide for primary payment”.   That was not the circumstance in the Parra litigation.  Here the primary plan had “long ago tendered the sum claimed by PacifiCare … [and] Pacificare’s claim for relief is not against the insurer, or even against the Parra’s estate for sums received from a primary plan for medical expenses, but rather against the Survivors.”

The holding of the Ninth in Parra is not of much assistance to the practitioner as it is tailored narrowly to the facts of the specific case.  Though not cited, the reasoning is the same as found in Bradley v. Sebelius, 621 F.3d 1330 (11th Cir. 2010) which found that a “primary payer” under 42 U.S.C.  §1395y(b)(2)(A) is not defined as “surviving children with tort property beneficiary rights.”  This ruling, while helpful, has limited applicability as currently the only opportunity to avoid repayment to the MAO plan under MSP is in situations involving a wrongful death claim where the proceeds of any settlement or award are not held by the estate of the MAO enrollee.

Synergy reduces AARP Medicare Advantage repayment by 95% for a savings of $49,000.00

This case involved an elderly plaintiff who had Medicare Part C coverage through his AARP Medicare Advantage plan.  The plaintiff was injured when he was walking through a parking lot and was forced to jump out of the way of a speeding motor vehicle.  The member injured his hip and legs in the leap and subsequent fall.  The AARP Medicare Advantage plan asserted a reimbursement claim in the amount of $51,669.34.  The entire underlying personal injury action settled for $50,000.00 from which the injured plaintiff’s attorney took $16,666.66 as his fee, resulting in a net recovery of approximately $33,333.00 for the plaintiff.  Rather than pay the balance of these funds over to AARP, counsel for the injured plaintiff engaged Synergy Lien Resolution to assist in resolving AARP’s  claim. Synergy applied itsproven tactics and within forty five (45) days had reduced the claim to $2,690.40.  This is a reduction of almost 95% which created a savings of $48,978.94 allowing the injured plaintiff to retain over 80% of his net recovery.