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Medicare Advantage Private Cause of Action is Now Sweeping the Country

Medicare Advantage Private Cause of Action is Now Sweeping the Country

Courts across the country continue to rule that Medicare Advantage Plans (MAP or MAO) are enforceable and shall be entitled to double damages if not repaid in third party liability situations.  The trial bar has been aware of this significant exposure since 2016 when Humana Insurance Company v. Paris Blank LLP et al., No. 3:2016cv00079 – Document 23 (E.D. Va. 2016) confirmed that attorneys are personally liable to repay Medicare Advantage plans. (See previous Synergy Blog Post).  Adding to the concern is Western Heritage’s ruling which stated that the amount due “shall” be double the amount of the Medicare Advantage plan’s Final Demand (Humana v. Western Heritage Insurance Co., No. 15-11436 (11th Cir. 2016) (See previous Synergy Blog Post)).   Two recent cases continue the reasoning that Medicare Advantage Plans, via the Medicare Secondary Payer Act, have a private cause of action and are entitled to double damages when a “primary plan” fails to reimburse them for conditional payments made on behalf of a beneficiary.

The first is Aetna Life Insurance Co. v. Guerreras, et al.  filed in the US District Court for the District of Connecticut.  In this case, Aetna, who was the Medicare Advantage Plan, filed an action against Nellina Guerrera, her attorneys and the defendant in the personal injury action.   Guerrera and her attorneys were dismissed. However, the case is moving forward against the defendant.  The private cause of action provision, entitling Aetna to double damages, was not dismissed against Big Y, the defendant, as they were found to be the primary plan or payer as defined by the MSP law.  Big Y’s duty was to be sure that Aetna was reimbursed and this was not guaranteed or accomplished by making payment to the insured and their attorney.

The second case is Humana, Inc, United Healthcare Services, Inc. and Aetna, Inc. v. Shrader Sc Associates LLP, out of the US District Court for the Southern District of Texas.  In this case, Shrader Associates LLP (a Plaintiff’s law firm representing asbestos trusts) argued that the trusts were not primary plans under the MSP “primary plan” definition.  The court disagreed in this opinion, holding that the MSP permits a MAP to sue a primary plan that fails to reimburse it for primary payments.

Unlike the Connecticut case, which held that attorneys are not personally liable, the Texas court found, as has every other court who has dealt with this issue, that attorneys are “primary plans” and are personally liable.  In Shrader, the court found that attorneys are expressly listed in the regulations as a “primary plan.”

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(i)(1):

“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 U.S.C. § 1395y(b)(3)(A)

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 [ ] payment … or reimbursement.

Trial Attorneys Beware!

If a trial attorney reports a case to Medicare and the plaintiff is actually on a Medicare Advantage Plan, neither CMS nor BCRC inform the trial attorney. Unless the plaintiff has informed the trial attorney of the existence of a Medicare Advantage Plan, there is no way for the attorney to know. 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. 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) plans. Humana and other Medicare Advantage plans continue to benefit from this lack of transparency to avoid disclosure and to make the private cause of action a profit center funded by the trial bar.

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 an MAO and back each year.
  • Potentially a repayment obligation to both CMS and an 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 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 with Medicare or Medicare Advantage plans give us a call and speak to an expert 877-242-0022.


Janice Vincent

Senior Medicare Lien Resolution Specialist

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