With 21% of Florida’s population over the age of 65, we imagine that a decent portion of your personal injury clientele receive Medicare benefits. If so, understanding and complying with the Medicare Secondary Payer Act (MSPA) is critical to your practice. In this two-part post, we’ll answer four questions concerning the “when,” “who,” and “what” of liability under the MSPA.
Who can be sued?
To answer this question, we first need to know who’s suing – the government or a private party? (Refer to Part I for the answer to “Who can sue?”)
If it’s the government, watch out. Not surprisingly, the government can go after a wide range of defendants. The first category of defendants includes “primary plans,” which include group health plans, workers’ compensation plans, no-fault insurance, and automobile or liability policies.
The second category includes recipients of payments from primary plans. In the personal injury context, attorneys often become such recipients upon obtaining settlements or judgments in favor of their clients, so it’s easy to see how they can quickly fall within the government’s crosshairs.
If you’re skeptical, don’t be. Since just 2018, the government has collected the following amounts from attorneys based on allegations that they failed to reimburse Medicare for conditional payments:
- $250,000 from Meyers, Rodbell & Rosenbaum, P.A. in Maryland;
- $90,000 from Saiontz & Kirk, P.A. in Maryland;
- $53,295 from Angino Law Firm, P.C. in Pennsylvania;
- $28,000 from Rosenbaum & Associates in Pennsylvania;
- $6,604 from Simon & Simon, P.C. in Pennsylvania.
And in case its message wasn’t clear enough, in two of these cases, the government essentially warned the attorneys that further failure to reimburse Medicare under the MSPA could subject them to liability under the False Claims Act (which provides for treble damages, we may add).
Fortunately, when it comes to private parties, the pool of defendants is much shallower – at least in the jurisdiction of the Eleventh Circuit Court of Appeals. In 2019, the court ruled that only primary plans can be sued under the MSPA private cause of action and affirmed the dismissal of a lawsuit against a healthcare provider. In light of the basis for the ruling, it should extend to insulate attorneys from lawsuits instituted by private parties as well.
(Be aware, though, that this is not the case everywhere, as at least one district court – borrowing from Third Circuit Court of Appeals precedent – permitted suit against a law firm under the MSPA private cause of action.)
What are the damages?
The MSPA provides for “double damages.” This means that a successful plaintiff can recover twice the amount of the conditional payment at issue. The assumption is that the plaintiff would pay half back to Medicare and keep the other half for herself. In this way, the MSPA advances its “aim of reducing costs for Medicare.”
In addition, unreimbursed conditional payments accrue interest until they’re reimbursed; thus, the interest amount can be tacked on top of the double damages, if appropriate.
Thus far, we’ve taken a backward-looking approach to the MSPA by focusing on conditional payments. In our next posts, we’ll shift to a forward-looking approach by wading through the gray area of Medicare set-asides.
In the meantime, if you’re in need of assistance in identifying or reimbursing conditional payments, contact our lien resolution professionals today.
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