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Damages “shall” be in an amount double… Medicare Advantage Plans

On Monday, August 8th, the 11th Circuit affirmed the decision of the Southern District of Florida to award a Humana Medicare Advantage plan double damages when they were not repaid at the conclusion of a personal injury action. In Humana Medical Plan, Inc. v. Western Heritage Ins. Co., No. 15-11436 (11th Cir. Aug. 8, 2016) the 11th Circuit found that Humana’s claim against Western Heritage, the liability carrier in a personal injury action, for double the amount of benefits it provided to the plaintiff was proper. In fact, the 11th Circuit stated that Humana was entitled to summary judgment as to such a claim. Though, this decision by the 11th Circuit involves the complex cross-referencing of different sections of the Medicare Secondary Payer Act (MSP), the facts are ones trial attorneys are confronted with on a daily basis.

In June, 2009 the plaintiff sued a condominium association in state court for damages arising out of a slip-and-fall accident. In resolving the underlying personal injury action plaintiff’s counsel confirmed there were no outstanding Medicare liens as evidenced by a letter from The Center for Medicare and Medicaid Services (“CMS”) dated December 3, 2009. Near the conclusion of the underlying personal injury action it was discovered that the plaintiff’s medical benefits were provided by a Humana Medicare Advantage plan, which paid $19,155.41 in medical benefits related to the slip-and-fall.

Eventually Western Heritage, the third party liability carrier, learned of Humana’s Medicare Advantage lien and attempted to include Humana as a payee on the settlement draft. The state court judge ordered full payment to the plaintiff without including any lien holder on the settlement check. The judge simultaneously ordered plaintiff’s counsel to hold sufficient funds in a trust account to be used to resolve all medical liens. The plaintiff attempted to resolve the Humana claim, but while Humana and the plaintiff remained in ongoing litigation Humana filed an action against Western Heritage seeking double damages pursuant to 42 U.S.C. § 1395y(b)(3)(A).

In affirming the Sothern District of Florida’s opinion, the 11th Circuit found that the Medicare Secondary Payer Act’s (MSP) private cause of action extends to Medicare Advantage plans. The MSP provides:

“there is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).” 42 U.S.C. § 1395y(b)(3)(A)(emphasis added)

The 11th Circuit, in agreeing with the 3rd Circuit, found that 42 C.F.R. §422.108(f) extends the private cause of action to Medicare Advantage Plans (Medicare Advantage Organizations “MAO”s).

“The district court concurred with the Third Circuit’s analysis of the MSP private cause of action and held that ‘[t]he statutory text of the MSP Act clearly indicates that MAOs are included within the purview of parties who may bring a private cause of action.’  We agree.”


What should be especially upsetting for the trial bar is that the 11th Circuit performed this analysis specifically regarding 42 C.F.R. §411.24(g).

“CMS has a right of action to recover its payments from any entity, including a beneficiary, provider, supplier, physician, attorney, State agency or private insurer that has received a primary payment.”

42 C.F.R. §411.24(g) (emphasis added) See Also, United States v. Weinberg, 2002 U.S. Dist. LEXIS 12289 (E.E. Pa. July 1, 2002); United States v. Harris, 2009 U.S. Dist. LEXIS 23956 (N.D. W. Va. March 26, 2009) affirmed, 334 F. App’x 569 (4th Cir. 2009); Denekas v. Shalala, 943 F. Supp. 1073 (S.D. Iowa 1996).

The reality of this exposure struck home in a recent case of national attention in which a Humana Medicare Advantage plan utilized these statutes and regulations to file suit against the ParisBlank law firm, one of the most respected firms in the Commonwealth. As both the ParisBlank law firm and Western Heritage discovered, Humana is aggressively using these statutes and regulations. Humana’s mantra, proven successful to date, has been “damages shall be in an amount double.” Despite the fact that Western Heritage placed the full amount of Humana’s claim in trust ($19,155.41) during litigation, Humana demanded the damages be doubled. The 11th Circuit found that placing the funds in trust was not the required “appropriate reimbursement” and thus Humana’s intractability was rewarded. In supporting Humana, the court drew a harsh bright line stating:

“If a beneficiary or other party fails to reimburse Medicare within 60 days of receiving primary payment, the primary plan ‘must reimburse Medicare even though it has already reimbursed the beneficiary or other party.” 42 C.F.R. § 411.24(i)(1).


If the MAO is not repaid within sixty days, regardless of ongoing negotiations, they shall collect double damages.

“Finally, we agree with the district court that double damages are required by statute. Unlike the Government’s cause of action, the private cause of action uses the mandatory language “shall” to describe the damages amount.  Compare 42 U.S.C. § 1395y(b)(2)(B)(iii) (“The United States may . . . collect double damages  . . . .” (emphasis added)) with 42 U.S.C.  § 1395y(b)(3)(A)  (Damages “shall be in an amount double the amount otherwise provided.” (emphasis    added)); see also Baxter Jnt’l, Inc. , 345 F.3d at 905.

Therefore, the district court correctly ordered Western to reimburse Humana $38,310.82, double the amount to which Humana was otherwise entitled.

As an expert witness in the ParisBlank suit, Synergy’s Director of Lien Resolution Services, Dave Place, testified that one factor that  makes this clear trend of the Circuits unsettling is that Medicare Advantage plans are not required to follow any of the reporting or disclosure obligations that exist for traditional fee-for-service Medicare (A&B). There is no “portal” to check, or central repository of information from which a trial attorney could obtain some level of certainty that any potential repayment obligation is satisfied. In both the Western Heritage case and the ParisBlank matter, the parties involved had confirmation from CMS that Medicare had no interest. Understandable confusion followed when Humana asserted repayment rights at the conclusion of both personal injury cases. Yet, despite this confusion, which is clearly a result of the lack of corresponding, reporting, and disclosure requirements for MAOs, in both cases there was a demand for double damages as penalty.

Making it even more difficult and confusing for the trial attorney is that neither CMS nor BCRC provide any assistance. If a trial attorney reports a case to BCRC and the plaintiff is actually on a Medicare Advantage Plan neither CMS nor BCRC will inform the trial attorney. The burden is on the trial attorney to discover and satisfy these Medicare Advantage repayment obligations or potentially be forced to pay double themselves.

A few best practices:

  • Get all insurance cards from your client or their personal representative – Clients on Medicare Advantage plans often refer to their coverage as Medicare.
  • Confirm effective dates of coverage – Clients can switch back and forth from Medicare A&B to a MAO and back each year.
  • Potentially a repayment obligation to both CMS and a MAO may exist in the same case for the same accident, so you must check for both.
  • If you are expecting a large conditional payment amount to return from CMS and it is small or zero this should be a red flag that potentially an MAO is paying.
  • Review billing statements from hospitals and providers to determine if an MAO is making payment.
  • Consult an expert.

Another likely result of this case is that the trial attorney should now expect the same treatment of Medicare Advantage claims by defense counsel as is now the case with Medicare A&B. Defense counsel may demand written confirmation that any purported Medicare Advantage lien has been satisfied, and may be reluctant to disburse funds to the plaintiff with only the expectation that the plaintiff will satisfy this obligation.

Synergy will continue to actively protect injury victims and the attorneys who represent them. If you are having an issue like ParisBlank, give us a call and speak to an expert 877-242-0022.





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