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Eleventh Circuit Court of Appeals rules assignee of reimbursement claim of Medicare Advantage Organization was barred from suing medical service providers because private Medicare Secondary Payor Act plaintiff can only sue primary plans for reimbursement

On March 18, 2019, in MSPA Claims 1, LLC, v. Tenet Florida, Inc., No. 18-11816, the Eleventh Circuit Court of Appeals affirmed a district court ruling barring a claim to enforce a  Medicare Advantage Plan’s alleged right of reimbursement from a medical service provider.  The Medicare Secondary Payor Act (“MSPA”), enacted in 1980, makes a private insurer the “primary” payer (pay first) and Medicare the “secondary” payer (pay only if a balance is remaining) in a situation where both entities are responsible for an individual’s medical costs. However, the private insurer does not always pay promptly, so the MSPA also allows Medicare to pay the entire amount upfront and claim reimbursement from the primary plan.  The MSPA creates two causes of actions to enforce this right of reimbursement – a public cause of action that allows the government to sue directly when it is not properly reimbursed (which can only be exercised by Medicare), and a private cause of action (which can be exercised by private individuals).  The private cause of action includes the right to collect double damages and retain the excess after paying off Medicare.  In this case, a Medicare Advantage Program (“MAO”), which is not entitled to use the public cause of action available to Medicare, assigned its legal rights to a third party, i.e., a private collection agency, which in turn filed a lawsuit against a hospital which had delinquently reimbursed the MAO for a $286 payment that was covered by a primary insurer.  The Eleventh Circuit Court of Appeals ruled that the lawsuit was barred because the MSPA only provides for a private cause of action against a “primary plan” and not a medical service provider. 

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