11th Circuit Finds MAOs May Bring Double Damages Private Cause of Action Against Medical Providers

CMS, Medicare Advantage, Medicare Set-Aside Blog, MSP Litigation on March 21, 2018
Posted by Jean S. Goldstein, JD

The 11th Circuit issued an opinion yesterday on a Motion to Dismiss on a claim addressing a new question, one they have never been faced with before: Whether an MAO has a private cause of action against the recipient, or a provider of a primary payment. Claims v. Bayfront Hma Med. Ctr., 2018 U.S. Dist. LEXIS 44913. In addressing this question, the Court indicated that much of the litigation within the 11th Circuit has focused on which Medicare Advantage Organizations (“MAOs”) may utilize the private cause of action provisions of the Medicare Secondary Payer Act (MSPA).  However, this matter is a class action filed along with other Florida MAOs.

This particular Motion to Dismiss is based upon the following specific events:

  • A Medicare beneficiary enrolled in a Medicare Advantage Plan (“MAP”) administered by Florida Healthcare Plus (“FHCP”) was involved in an automobile accident;
  • Plaintiff, a well-known player in the MSPA action space, MSPA Claims 1, LLC is assignee of FHCP;
  • The beneficiary subsequently received medical treatment at a facility operated by Defendant, Bayfront HMA Medical Center, in the amount of $6,255.96;
  • The beneficiary was also covered by automobile insurance, which provided no-fault benefits after the accident and paid a portion of the medical services provided by Bayfront in the amount of $3,753.58;
  • Bayfront subsequently billed the MAP for medical services in the amount of $6,255.96, of which the MAP paid $651.64 of the charges.

Plaintiff filed suit, as an assignee of FHCP, against Defendant, Bayfront, as a class action with other Florida MAOs alleging:

  • The existence of a private cause of action under the Medicare Secondary Payer act (MSPA);
  • That actions by the provider constituted deceptive and unfair trade practices under the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”); and
  • Unjust enrichment.

Defendant responded to the claims by asserting that the language in the MSPA “…only permits a private cause of action against primary plans and not providers.” Id. at 11 (emphasis added). The Court, however, disagreed with Defendant, finding that a provider may be sued under the MSPA private cause of action, and may therefore be liable for double damages.

How Did the Court Arrive at this Decision?

As we have seen in other cases, the court stated that the plain language of the MSPA “could be interpreted in more than one way” and therefore relied upon Chevron deference, stating that “…it must defer to an agency’s interpretation of its governing statute unless “Congress has directly spoken to the precise question at issue.” Id. at 12.  This led the Court down an interesting interpretation as it addressed the multiple sections of the MSPA, and quite simply asserted that by being “able to draw a line…” to the different provisions within the MSPA, the Government is in fact able to bring a cause of action for double damages against both a primary payer and a provider.  As the Court stated, “…the three paragraphs [of the MSPA examined] work together to establish a comprehensive MSP scheme.”[1]

Additional Claims Addressed Within the Opinion

In addition, the Court addressed two additional issues within the Motion to Dismiss including an argument for dismissal based upon the Statute of Limitations and dismissal of the FDUTPA and unjust enrichment claims. With respect to Statute of Limitations claim, the Court found the action was brought timely as the applicable statute of limitations for such actions provides, that:

An action may not be brought by the United States under this clause with respect to payment owed unless the complaint is filed not later than 3 years after the date of the receipt of notice of a settlement, judgment, award, or other payment made pursuant to paragraph (8) relating to such payment owed. § 1395y(b)(2)(B)(iii). Id. at 17.

This is an important distinction to take note of, as the Court found that the action was brought less than three years from the date notice was provided that a primary payment had been made; rather than three years beginning on the date on which the medical services or items were provided. Thus, because the complaint was filed less than three years of when payment was made; it was still found to be timely filed.

Lastly, Plaintiff’s FDUTPA and unjust enrichment claims were dismissed because the assignment did not include these types of claims.

Key takeaways from this decision:

  • We continue to bear witness to the Courts treating Medicare Advantage Organizations (MAOs) as if they are on equal footing as the federal government. This case is yet another example of the Court extending and expressly enabling recovery as if MAOs are the government, and now extending such recovery efforts to encompass medical providers.
  • Primary payers, providers, and the like are not to assume an action is barred by the statute of limitations based upon the date medical services were actually provided; but note the date of when primary payment is made or when notice of such payment has been provided.
  • We are now seeing primary payers and providers being hit with these lawsuits, across the nation. It is only a matter of time before such an action shows up in your backyard.

 

For assistance with conditional payments or lien resolutions, please contact our team at info@medval.com.  Our lien resolution team is comprised of an experienced group of clinical, legal, and claims professionals.  We advocate on your behalf to make sure you can settle your claim.

[1] Specifically, the Court in formulating its’ opinion looked “…to multiple linked subsections to comprehend the law as a whole. Subparagraph (2)(A), directly referenced in the private action provision, prohibits any Medicare payment when there is a primary plan, “except as provided in subparagraph (2)(B).” Id. § 1395y(b)(2)(A). Subparagraph (2)(B), among other things, (i) grants the Secretary the authority to make conditional payments; (ii) requires primary plans and “an entity that receives payment from a primary plan” to reimburse the Secretary; and (iii) permits an action by the United States to recover double damages against both a primary plan and an “entity that receives payment from a primary plan. § 1395y(b)(2)(B).” Id. at 14-15.