By Dave Place
This case has gained national attention amongst the trial bar for its far reaching implications. Synergy is on the forefront of protecting plaintiffs and the plaintiff’s bar which is why we feel so strongly about how the court in this case simply got it all wrong. In this shocking case, Humana alleges that despite the trial attorney (with the firm ParisBlank) having no reasonable, consistent, or reliable way to learn of a Medicare Advantage Plan’s (“MAP”) lien, the attorney should be personally liable for double damages.
Though this legal attack on the trial bar is unreasonable, some commentators have taken this as an opportunity to sell on fear. One commentator even asserting that perhaps ParisBlank “thought they could pull a fast one on Humana.” However, the key fact to remember is that ParisBlank maintained consistent contact with Medicare and had no knowledge of the existences of a Medicare Advantage plan until after the case was settled and funds disbursed. They did not try to “pull a fast one,” but followed all the best practices trial attorneys across the nation follow when dealing with Medicare. Unfortunately for ParisBlank Humana is attempting to use the Medicare Secondary Payer Act (MSP), and its attendant regulations to maintain a private cause of action against unsuspecting plaintiff’s counsel.
The MSP provides for a private cause of action when a primary plan fails to reimburse a secondary plan for conditional payments it has made.
“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).
Humana argues that 42 C.F.R. §422.108(f) extends the private cause of action to Medicare Advantage Plans.
“MAOs will exercise the same rights to recover from a primary plan, entity, or individual that the Secretary exercises under the MSP regulations in subparts B through D of part 411 of this chapter.”
Humana also relies on memorandum issued by CMS directors asserting that:
“notwithstanding recent court decisions, CMS maintains that the existing MSP regulations are legally valid and an integral part of Medicare Part C and D programs.”
CMS, HHS Memorandum: Medicare Secondary Payment Subrogation Rights (Dec. 5, 2011).
Humana asserts liability for the repayment and double damages against ParisBlank via:
“In addition, the United States may recover under this clause from any entity that has received payment from a primary plan or from the proceeds of a primary plan’s payment to any entity.”
42 U.S.C. § 1395y(b)(2)(B)(iii)
And pursuant to 42 C.F.R. 411, an attorney who is party to the settlement is defined as a “primary plan”:
“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)
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).
Remember 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) plans. Also, if a trial attorney reports a case to Medicare and the plaintiff is actually on a Medicare Advantage Plan, neither CMS nor BCRC will 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. Humana wants to use its ability to avoid disclosure as 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. That is why it has become vitally important to investigate the possibility that a client has elected Part C coverage if they already have Part A/B.
To keep up to date on lien resolution questions and other subrogation questions, visit http://www.synergysettlements.com/service/lien-resolution/