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Medicare Advantage Plan Awarded Double Damages in MSP Private Cause of Action Case

An interesting Medicare Secondary Payer (MSP) private cause of action case has just been decided that involves a Medicare Advantage Plan (MAP) and double damages.

Medicare Part C established Medicare Advantage Plans (MAPs) in 1997 to give Medicare beneficiaries the option of receiving Medicare benefits through private insurers. The goal was to harness the power of private sector competition to hopefully create a less expensive Medicare system.

The pertinent facts in this case are that Mary Reale was enrolled in a Humana Gold Plus Medicare Advantage Plan (MAP) when she sustained injuries in a slip-and-fall accident at a condominium complex. Humana paid $19,155.41 for her injury related medical expenses. Ms. Reale later filed a personal injury claim with the condo’s liability carrier, Western Heritage, in state court. While that state court case was awaiting an appellate court decision, the Humana v. Western Heritage action was filed in the United States District Court for the Southern District of Florida by Humana to recover $19,155.41 in conditional payments plus another $19,155.41 in double damages.

The U.S. District Court found that:

  • The Third Circuit’s analysis in In re Avandia 685 F.3d was persuasive that the statutory text of the MSP clearly indicates that MAPs can bring a private cause of action.
  • Western Heritage was a primary payer under the MSP Act and is responsible for reimbursing Humana.
  • Humana was statutorily entitled to recover double the amount that it paid on behalf of Ms. Reale.

The U. S. District Court granted the plaintiffs Motion for Summary Judgment and ordered Western Heritage to pay $38,310.82 to Humana.

To read Humana v. Western Heritage, 2015 U.S. Dist. Lexis e31875 click here.

2 Comments

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  1. bizatl Apr 03, 2016 - 05:31 PM

    I couldn’t resist commenting. Very well written!

    Reply
    • Douglas L. Shaw, CPA, CMSP Apr 28, 2016 - 02:32 PM

      Thanks. I appreciate the positive feedback.

      Reply