Law Firms and Lawyers Beware
Ins. Co. v. Paris Bank, LLP, --F.Supp.
3d--, 2016 WL 274597 (E.D. Va. 2016)
has confirmed that law firms and lawyers
alike are subject to private causes of
action under the Medicare Secondary
Payer Act (MSP) according to the Eastern
District of Virginia. The underlying facts
of the case show how plaintiff's attorneys
and their firms can find themselves as
defendants to a MSP private cause of
action.
On October 11, 2013, an enrollee
under Humana Insurance Company's
(Humana) Medicare Advantage program
Humana paid out a total of $191,612.09
in conditional payments for medical
expenses related to the motor vehicle
accident. The enrollee retained the
services of the law firm of Paris Bank, LLP,
and ultimately, Paris Bank, LLP, secured
a total of $475,600 in payments from
various insurers to resolve the personal
injury claim. One or more of the settlement
checks were issued to both Humana and
the enrollee's law firm jointly. Although
the law firm requested one of the carriers
to issue a new settlement check in the law
firm's name only, the carrier refused to do
so. According to the facts recited by the
court, the law firm deposited the subject
check without Humana's endorsement. The
decision also notes that Humana alleged
that settlement proceeds were subsequently
disbursed to the enrollee by the defendant
law firm.
Subsequent to the settlement, Humana
advised the enrollee that she owed
$191,612.09 to reimburse the conditional
payments made for the medical expenses.
On behalf of the enrollee, a lawyer from
Paris Bank, LLP, sought a waiver of
this amount and, in support, provided
correspondence that apparently contained
confirmation from the Centers for Medicare
and Medicaid Services (CMS) that the
Enrollee did not have any obligation under
Medicare Part A or Part B.
Humana ultimately denied the request
for waiver of the amount and brought a
private cause of action under 42 U.S.C.
lawyer and his law firm. The law firm and
lawyer moved to dismiss arguing that no
private cause of action existed under the
MSP that such a cause of action would not
be applicable to the lawyer and his law
firm. The Federal Court in the Eastern
District of Virginia denied the motion and
stated clearly that an MSP private cause
of action could be brought against the
lawyer and his law firm.
The Eastern District of Virginia in
its ruling found persuasive the decision
from the Third Circuit Court of Appeals
In re: Avanida Marketing, Sales Practices
and Products Liability Litigation, 685
F.3d 343 (3d Cir. 2012). In that decision,
the Third Circuit found that a private
cause of action was created under
42 U.S.C. §1395y(b)(3)(a) to recover
secondary payer conditional payments.
Depending on your viewpoint, this could
be considered either an expansion or a
confirmation of the scope of the MSP law
first passed in 1980. As described by the
Eastern District of Virginia Humana case,
the enacted MSP law coordinated the
payment of benefits between primary and
secondary payers. Under this framework,
worker's compensation, liability and
no fault insurance were primary payers
and Medicare secondary. If Medicare
made conditional payments, it could
seek payments from primary payers.
The Humana decision arguably lumps
law firms into the group of "primary
payers" who may be subject to a private
MSP action to recover secondary payer
conditional payments.
law firm of Ogden & Sullivan, P.A., where
he practices insurance defense as well as
life, health and disability litigation. He is
admitted to the Florida Bar, U.S. District Court,
Southern, Middle and Northern Districts of
Florida and the U.S. Circuit Court of Appeals
for the Eleventh Circuit.
113 South Armenia Avenue
Tampa, Florida 33609
813.262.2040 Fax
rmaselli@ogdensullivan.com