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Medicare Secondary Payer Double Damages Imposed on Employer

The Medicare Secondary Payer (MSP) statute allows private citizens to collect double damages if they prevail in a “private cause of action” claim where they show that a “primary plan” did not reimburse Medicare for conditional payments previously made by Medicare. Congress authorized this to encourage private parties, who may be more aware of a Medicare reimbursement failure, to help enforce Medicare’s reimbursement rights.

Specifically, the MSP private cause of action language states the following:

42 USC 1395y(b)(3)(A) Private cause of action.—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).

Hull v. The Home Depot was a workers’ compensation case that resulted in double damages being awarded when a Michigan State Court determined that The Home Depot did not reimburse Medicare until after the plaintiff filed a private cause of action claim. Also, The Home Depot’s denial of the claim was no excuse for them to not reimburse Medicare. As a result, The Home Depot was ordered to pay an additional $42,233.16 to the claimant to reward him for his collection efforts on behalf of Medicare. If this case is appealed, we will follow it and let you know the result.

A very similar result occurred in a Kentucky case decided in 2014, The Estate of Clinton McDonald v. Indemnity Insurance, where O’Reilly Auto Parts was the employer. Click here to read our previous blog about that case.

Click here to read the 2.17.2016 Hull v. The Home Depot opinion.

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