Get it While its Hot! – Four Year Time Limit Applies to Lawsuits for Double Damages Under the Medicare Secondary Payor Act

On August 10, 2022 the United States Court of Appeals for the 11^th Circuit ruled that private parties have four years to file suit to recover double damages under the Medicare Secondary Payor Act (“MSPA”).  MSPA Claims 1, LLC v Tower Hill Prime Insurance Co, 11^th Circuit Case No. 21-1135.  This is the first time a Federal appellate court ruled on the issue.  The next logical question is – so what?

1. What is the MSPA?

 The United States Congress passed the MSPA in 1980 in an attempt to lower Medicare costs.  The law says that Medicare is the payer of last resort – the secondary payer – in cases where the Medicare beneficiary has coverage for illness or injury through any other insurer.  Private insurance pays first, if it applies.  That’s the rule.

2. Why is the MSPA relevant for medical providers?

 Medicare beneficiaries often have double insurance coverage for a treatment encounter.  For example, the beneficiary may have no fault coverage (if treatment relates to injuries sustained in an accident), workers compensation coverage (if the beneficiary works and was injured during the course and scope of employment) or private health insurance (through personal or spousal employment).  In such cases, Medical providers must look first to the private insurance for payment of the incurred expenses.

3. What happens if the primary insurance won’t pay?

The MSPA allows Medicare to pay the incurred expenses “conditionally”, if primary insurance denies the claim, or refuses to pay it timely.  But the Medicare payment is conditioned on reimbursement from the primary insurance, if the denial or delay was unlawful.

4. What if the denial from primary insurance was unlawful?

Sometimes primary insurers deny claims that they should pay.  But the government does not have unlimited resources to investigate and pursue primary insurance for reimbursement in all such instances.  So, Congress added a private cause of action to the MSPA. This part of the law empowers private actors with legal standing to sue primary insurance for “double damages” in cases where private insurance wrongfully denied a claim, and Medicare was forced to temporarily foot the bill.  Awarding “double damages” against the primary insurance has a dual purpose.  To reward private actors for investigating and pursuing bad insurance denials.  And to punish primary insurance for wrongfully denying payable claims.

5. Can a Medical Provider enforce the MSPA private cause of action, and if so, what are the applicable time lines?

Medical providers witness the claim payment process first hand.  And are often in the best position to know when primary insurance violates the MSPA.  The law says that Medical Providers have legal standing to sue primary insurance for “double damages” under the MSPA private cause of action.  And based on this new decision, Medical providers have four years from the date of Medicare’s conditional payment to bring the action.

Please contact Andrew Oostema or any of the attorneys in Miller Johnson’s Medical Recovery Group for questions about this alert or for a review of any of your claims at mjmedrecovery.com.  We are here to help.