Medicare Advantage Case Law

At the 2016 NAMSAP Annual Conference a panel discussed cases around the country on the reimbursement rights of private entities. The panel was:

• Ciara Kobe – Burns White
• Heather Sanderson – Franco Signor, LLC
• Jennifer Jordan – MEDVAL
• Lee Yeakel – Judge US District Court, Western District Texas

Medicare Advantage plans are private healthcare plans that are funded by Medicare to provide benefits to Medicare beneficiaries. While they are private entities, their funding comes from Medicare. CMS is pushing Medicare Advantage providers to assert their reimbursement rights in secondary payer actions in an effort to control costs.

When Medicare Advantage providers first tried to assert their rights to recovery they indicated they had the same reimbursement rights as CMS and could pursue a private cause of action. Payers questioned this as there was no statutory support for these private healthcare companies having a separate cause of action. Thus, this issue has been pursued through the courts in multiple cases.

Initial cases denied these private healthcare payers recovery rights citing language in the statutes that specifically said “the United States government” when referring to who had the right to pursue recovery. Ultimately, the Avandia case in the 3rd Circuit Court of Appeals found that the “intent” of the legislation was that Medicare Advantage providers should have the same recovery rights as CMS because they were an agent of CMS.  A similar decision on a different case has been issued in the 11th Circuit Court of Appeals.

A fundamental problem is that these Medicare Advantage providers are not CMS and they do not follow the same protocols as CMS when it comes to establishing conditional payments and dispute resolution. Some courts are giving individual providers the ability to pursue a private cause of action, and they are using this loophole to get around denials. Right now there are many different cases from many different courts and often these are conflicting.

Another challenge is that there are so many Medicare Advantage programs and a person may have been enrolled in multiple programs over their lifetime. With CMS, you can find out about conditional payments they have made but this resource does not exist with Medicare Advantage programs. This makes it very challenging for payers to identify any potential conditional payments which must be accounted for in any settlement. Even if you know the person was in a Medicare Advantage program, you cannot get information from them about payments without a HIPPA release.

A panelist emphasized that is important to know your court and know your judge. Before pursuing litigation it is important to review how the judge has been ruling on similar issues. This can give you guidance on how they will rule in your case. Some judges focus on pure statutory construction and look exclusively at the language in the statute. Other judges try to determine the intent of the statute based on other factors. Some judges focus exclusively on the arguments made by the lawyers and the issues they raise, but other judges look beyond what the lawyers say and try to look at the facts and come up with their own arguments.

Since two separate Circuit Courts have ruled Medicare Advantage payers have recovery rights, this is an issue payers must consider. However given the challenges in obtaining information about payments made by Medicare Advantage providers this is a very difficult task.