Lawyers: 11th Circuit Medicare Ruling Could Be Worth Billions
by Katheryn Hayes Tucker
A federal appeals court decision analyzing the Medicare Secondary Payer Act could put the nation’s largest automobile insurance companies and other providers on the hook to pay billions of dollars in Medicare reimbursement.
“This is a humongous victory,” said John Ruiz of Miami, attorney for MSP Recovery, which be said owns billions of dollars in claims assigned by health maintenance organizations offering Medicare Advantage Plan benefits. Ruiz said he and his partner Frank Carlos Quesada, have about 30 Florida lawyers working in-house on MSP Recovery cases and additional attorneys around the country for similar actions seeking to recover from insurance companies.
The U.S. Court of Appeals for the Eleventh Circuit ruled in MSP’s favor Aug. 30 in seven consolidated cases under the Medicare Secondary Payer Act of 1980, which requires primary insurance plans to reimburse Medicare for medical bills that the primary plans have or had a responsibility to pay for. The Jaw creates a cause of action for the United States to seek double damages from a primary plan that shirks responsibility.
MSP Recovery acts as a collection agency, stepping into the Medicare provider’s shoes and pui’SUing payment on contingency with an agreement to split any recovery, after deducting expenses.
Each case before the Eleventh Circuit involved an automobile wreck for which a health insurer paid for medical services that MSP contends should have been covered by a no-fault personal injury protection insurance policy. The defendants include Allstate. Progressive, IDS Property Casualty and Infinity Auto Insurance Co.
Judge R. Lanier Anderson distilled the cases down to one central question: Can an insurer’s contractual obligation trigger the private cause of action provision in the law, absent a court judgment assigning liability? “We hold that it can.” Anderson wrote, with the agreement of Chief Judge Ed Carnes and U. S. District Judge Roger Titus of Maryland sitting by designation.
Lead counsel for Allstate in these actions, Rachel LaMontagne of Shutts & Bowen in Miami, said, “The opinion speaks for itself.” She referred questions to an Allstate corporate spokeswoman, who couldn’t be reached by deadline.
Other defense attorneys also couldn’t be reached.
The decision reverses orders dismissing the suits by separate trial judges relying on Glover v. Liggett Group, a 2006 Eleventh Circuit opinion. But that case was different, Anderson wrote. Glover involved an alleged tortfeasor, and so the court ruled that a judge or jury must first determine liability before the MSP Act could be used as a vehicle for recovering costs.
The plaintiff in Glover was attempting to force tobacco companies to pay health care costs because of the known hazards of smoking. The Eleventh Circuit said no, the law couldn’t be used to substitute for a liability judgment.
“We knew our situation was different because our defendants were insurance companies,” said Beverly Pohl, who heads the statewide appellate group at Broad and Cassel in Fort Lauderdale and briefed the appeal for MSP Recovery. She said Ruiz, a classmate at Nova Southeastern University law school 25 years ago, called her to handle the appeal last year after losing at the trial level.
“I hadn’t talked to John in a while,” she recalled. “He said, ‘I heard you’re a badass. ‘”
Pohl argued the district courts were wrong to dismiss the claims on the basis of Glover, which she said only applied to claims arising from tortfeasor responsibility. The existence of a contractual obligation to pay would in itself trigger the MSP Act’s private cause of action.
“It is a fundamental principle of contract law that a contract imposes enforceable rights and obligations,” Anderson wrote. “A contract imposes obligations on the parties immediately, without any involvement of the courts. While a lawsuit may be necessary to enforce a contract in the event of a breach, the obligations created by the contract exist as soon as it is executed.”
Ultimately, MSP Recovery may have to go to court to enforce the contracts in these cases. Ruiz acknowledged, but the potential for double recovery may prove persuasive: “It’s like a hanuner over the head.”