MSP Recovery v. Ace American

NEWS ALERT: The U.S. Department of Health and Human Services (through the Justice Department) agrees with and adopts MSP Recovery’s position in several legal issues pending before the appellate court.

In December 2019, the United States Court of Appeals for the 11th Circuit, requested that the U.S. Department of Health and Human Services submit an amicus brief on the law at issue related to this appeal. In summary, Medicare subcontractors (i.e. First Tier Entities, MSOs, IPAs) that have paid for a Medicare beneficiary’s medical expenses have suffered a legal injury and can file suit under the MSP Act.

Some notable excerpts from the United States’ brief:

i. “Entities that have paid for medical items or services – whether by providing those items or services themselves or by paying others to do so … would be entitled to receive the proceeds of a reimbursement if one were made have suffered a cognizable injury and can file suit.”

ii. “To the extent that subcontractors have taken on the health care risk of the Medicare Advantage organization, they can suffer injury if not reimbursed by the primary insurer and thus can take advantage of the private right of action.”

iii. “Allowing the subcontractor to recover in these circumstances advances the goals of the Medicare Secondary Payer statute.”

iv. “While payments do not go to Medicare directly in Medicare Advantage cases, payment by primary payers reduces costs, and some of those savings are passed on to Medicare through reduced costs or to the beneficiaries through expanded services. See 42 U.S.C. § 1395w-23. It is entirely natural that the entity that actually paid for the services, and that assumed the risk that reimbursement would not be made as required by the statute, would have a right of action to compel payment.”

A primary payer’s requirement to reimburse Medicare is triggered whenever it has constructive knowledge of a payment by Medicare. A demand letter to the primary payer is not required.

MSP Recovery Law Firm Founder, John H. Ruiz says, “The U.S. Government has agreed with our legal positions. In these economically challenging times, this has the potential to put hundreds of millions of tax dollars back into Medicare that were expended improperly. HHS’s position clarifies that those on the frontlines of paying for and providing healthcare, can recover their damages under the MSP Law.”

A ruling on this matter is expected in the coming months.

MSP Recovery v. Ace American, Case Nos: 18-12139, 18-12149, 18-13049 and 18-13312 (11th Circuit).

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