Fifth Circuit District Court Holds Medicare Advantage Plans May Assert Private Cause of Action Against NGHPs

As we previously reported, last year, Humana filed several lawsuits asserting private causes of action and seeking double damages for medical expenses paid by Humana Medicare Advantage Plans that were allegedly payable under the defendants' no-fault and med pay policies.  Humana voluntarily dismissed each of the lawsuits except for the lawsuit in the Western District of Texas.  In that case, the Magistrate Judge previously issued a Report and Recommendation advising the court to dismiss Humana's claims under the Medicare Secondary Payer Act (MSPA) on the basis that the private cause of action under the MSPA is not applicable to Medicare Advantage Plans.

Recently, the court issued an order finding that the Magistrate's Report and Recommendation should be rejected and denying the defendants' motion to dismiss.  The court agreed with the decision of the Third Circuit Court of Appeals in re: Avandia Marketing, Sales Practices, and Products Liability Litigation, 685 F.3d (3rd Cir. 2012), holding that Medicare Advantage plans may assert a private cause of action against a primary plan under the MSPA.

We will continue to follow this case and will keep you informed on any developments, as this case will likely be appealed to the Fifth Circuit Court of Appeals.  As we discussed last year, Humana is seeking broad restitution for medical expenses paid for any Humana plan enrollee when the defendants were the primary payer and had no-fault or med pay coverage, in addition to double damages.  If Humana prevails on its claims, the amount of damages awarded could be staggering.

Please let us know if you have any questions or concerns about resolving Medicare Advantage and Part D Prescription Drug Plan liens.  If you are uncertain whether a claimant is enrolled in a Medicare Advantage or Part D Prescription Drug Plan, we can help confirm that information.  We are currently assisting a number of clients with resolving Medicare Advantage and Part D Prescription Drug Plan liens, and we will be glad to help ensure that you are protected.