(Harris v. United Healthcare) The MSP Saves the Day in a Georgia Class Action
I was reading a case this morning that again reminds me how badly the MSP is misunderstood and frequently overlooked. The case involves an attempted class action seeking to right the wrongs of a perceived collusion between a hospital and a health insurance company to I guess bill patients for care received in lieu of insurance. The injustice probably ends right there as the plaintiff is unlikely going to be able to prove her own case.
Plaintiff alleges that pursuant to a contract between the hospital where she received care following an auto accident and United HealthCare, the health insurer of the Georgia State Merit System from which plaintiff is retired and entitled to medical benefits, that the hospital had an obligation to not only bill but accept payment in full from United at the contract rate which was less than the $11,663.48 lien that was asserted against plaintiff’s tort recovery, which was ultimately reduced to $8,105.61. She felt that the lien against her tort claim was unlawful, and despite receiving reimbursement for the medical care in the tort recovery, that obviously she should also not be obligated to give to the hospital that provided the care or the insurer had they made payment she obviously felt it was obligated to make payment on her behalf while she pocketed the recovery, and that she’s going to help get that money back for not just herself, but all similarly situated people also treated at that hospital insured by United. Let’s let her forget about subrogation rights for a minute and just worry if the rest of her similarly situated friends are entitled to Medicare too.
It is important to understand that as a retired teacher, who was known to be over the age of 65 and entitled to Medicare at all times relevant to this litigation, Georgia law and her state health care plan provide that Medicare shall be her primary form of health coverage. The opinion doesn’t say, but in that type of retirement situation, United HealthCare typically acts as a Medicare supplement plan. With plaintiff’s ordinary health care needs, Medicare is primary and United secondary. However because of the tort recovery, Medicare is statutorily exempt from payments related to the accident pursuant to the MSP, making Medicare secondary, United HealthCare tertiary and the auto/GL policy primary. It is this fact that Defendants apparently overlooked for nearly a year, as that is how long it took it to file a motion to remove the case to federal court as their ultimate defense is a federal question.
The hospital elected to assert a lien against plaintiff’s lawsuit against the at fault driver in lieu of seeking a Medicare conditional payment as is the hospital’s prerogative pursuant to the Medicare Secondary Payer Manual, the Medicare Intermediary Manual, and about three other manuals available on Medicare’s website [https://www.cms.gov/Manuals/]. The hospital had the option to bill Medicare and Medicare the right to make a conditional payment from which it would have been entitled to a statutory, priority right of recovery from the tort recovery, no questions asked. To do that, the hospital has to accept only the Medicare fee schedule payment in exchange for immediate payment and guaranteed recovery and is not entitled to seek anything beyond that payment from the beneficiary or any other party. Instead the hospital elected to roll the dice and seek recovery at its full billable rate from the auto/GL policy of the at fault driver, as is its legal right as acknowledged in those Medicare policy manuals. The hospital’s contract with Medicare has no such mandatory billing policy as it apparently does with United HealthCare, and therefore given that Medicare was in fact the primary payer in this case, the hospital’s election is governed by Medicare law and not state contract law.
Now the case has been remanded back to state court because it was in fact an untimely removal, and while a federal question exists, it does not require interpretation as proper citation of the Medicare policy manuals will likely allow the state court to resolve the case. The contract between the Hospital and United HealthCare is irrelevant and the hospital was correct in asserting that Medicare law would govern the outcome of this dispute. So the outcome of the case isn’t as important as the lesson to be learned here: if all practitioners had some basic awareness of the Medicare Secondary Payer Act, the disposition of this claim and many others would be reached much more efficiently, if even brought at all. You don’t need to become an expert in the MSP to be able to identify when it may affect your cases, and as you see here, failing to see it could be viewed as negligence. I shudder to think that this case could have made it to judgement on the basis of the contract claim alone.
EDITH HARRIS, individually and on behalf of all other persons similarly situated, Plaintiff, vs. MCG HEALTH, INC. d/b/a MCG Hospital, First Defendant, UNITED HEALTHCARE INSURANCE COMPANY and UNITEDHEALTHCARE OF GEORGIA, INC., Second Defendants.
CIVIL ACTION NO. CV 110-088
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF GEORGIA, AUGUSTA DIVISION
2011 U.S. Dist. LEXIS 25329
March 14, 2011, Decided
March 14, 2011, Filed