Flagship Services Group Blog

Summer School: Briefing Key Cases in 2020

Jun 23, 2020 11:03:37 AM / by Robert J. Finley

Keeping an eye on a few key cases from around the nation during the first half of 2020.


California v. Texas: Constitutionality of ACA. The case is docketed before the United States Supreme Court where the parties are briefing the issues regarding the Affordable Care Act’s (ACA) minimum essential coverage provision, California, et al., Petitioners v. Texas, et al.


CIGA’s Post-Script: To Be or Not To Be a Plan. The Ninth Circuit’s judgment is now final finding that California’s state workers’ compensation guarantee fund is not a primary plan, and, therefore, it would appear, does not have MSP responsibilities insofar as conditional payment reimbursement and reporting. This conclusion is similar to the Oregon State Bar Professional Liability Fund case. What’s more: some public comments on the proposed Civil Money Penalties requested clarity from CMS to better define and identify what is a primary plan for purposes of MSP reporting and repayment obligations.


Texas Twister: Will State Court Order Survive? The United States filed a Complaint against a Law Firm in Texas federal district court claiming recovery of conditional payments, interest, costs, and attorney fees from an underlying settlement of a 2014 motor vehicle accident Lawsuit. The Law Firm represented a plaintiff in the underlying Lawsuit filed in State court. While the State court Lawsuit was pending, the Law Firm communicated with CMS prior to the settlement, discovered Medicare’s conditional payment claims, notified CMS about the settlement, and received notice of CMS final demand. The Law Firm subsequently filed a Motion in State court asking to order Plaintiff reimburse Medicare out of the settlement monies. The Law Firm sent notice of the Motion to MSPRC- NGHP. The State court ordered Plaintiff to reimburse Medicare from the settlement monies but for an amount less than CMS’ conditional payment claim. In reliance on the State court order, the Law Firm, on behalf of Plaintiff, paid this amount to Medicare in 2017. The Law Firm did not participate in any CMS administrative review and appeal process. Now, in 2020, the United States is claiming that the State court lacked subject matter jurisdiction to adjudicate Medicare’s conditional payment demand and the State court’s order is void and unenforceable under sovereign immunity powers. The case remains pending in federal district court, while the Law Firm and its managing partner (named individually) has not yet answered or otherwise responded to the Complaint.


MSPA Claims Victory. A federal Appeals Court disagreed with and remanded to the district court regarding the legislative interpretation of §1395y(b)(2)(B)(vi) under MSP Private Cause of Action (MSPA). Plaintiff MSPA Claims 1, as assignee of a Medicare Advantage Organization (MAO), sought reimbursement under MSPA from defendant automobile liability insurer which earlier settled bodily injury claims brought by MAO member. Different from statute of limitations, the MSPA seemingly provided “another box to be checked” in the form of a “claims-filing provision prerequisite to file suit under MSPA private cause of action” where, notwithstanding any other time limits that may exist for filing a claim under an employer group health plan, the United States within three (3) years from the date on which the item or service was furnished must submit a payment request to the provider for purposes of conditional payment recovery. The district court decided in favor of the defendant in that Plaintiff did not check this box by providing notice of its claim after three (3) years from furnishing the service. However, the Court of Appeals did not reach the same conclusion because it interpreted the 3-year notice period only to serve to save claims which might otherwise be barred by claim submission terms found in a group health plan policy. MSPA Claims 1, LLC v. Kingsway Amigo Insurance Co., 2020 U.S. App. LEXIS 4554 (11th Circuit).


Big Sky’s the Limit: Medicare’s Exposure to Attorney’s Fees. Where there is a conditional payment dispute, Medicare must account for its liability under the Equal Access to Justice Act and exposure to the beneficiary’s attorney’s fees and costs. If beneficiary prevails on The Act places the burden on the government to demonstrate that the Medicare Appeals Council’s decision is substantially justified by the evidence. In Montana, the beneficiary, who received an asbestos settlement payment, was appealing an adverse ruling from the Medicare Appeals Council on $1,782.31 in conditional payments which were allegedly unrelated to her injury and post-dated the settlement. On review before the federal district court, the government’s argument essentially blamed the beneficiary for creating an inarticulate and confusing record before the ALJ and Appeals Council. The district court vacated and remanded the Council’s decision and went even further determining that Medicare did not meet its burden of showing its position on certain reimbursements were substantially justified making the award unjust; thus, resulting in reasonable attorney’s fees and costs in favor of the beneficiary under the Act. In a losing battle over $1,782.31 in conditional payment claims, the federal district court ordered the United States to pay $5,711.08 in attorney’s fees, plus $494.81 in costs to a Medicare beneficiary.


Perspective: These cases seem to demonstrate that Medicare recovery efforts are under increased and intensive scrutiny which presumably results in additional time and expense for all interested parties in reaching a final resolution. For the applicable plan, primary payor and/or its insurer, an important consideration is how to minimize the time and expense needed to resolve claims involving Medicare beneficiaries and government repayment demands. From the outset, general guidelines are urged to promote early identification of these kinds of matters. Thereafter, one must not undervalue or substitute personnel and/or programs with knowledge, training and experience to efficiently problem solve on a case-by-case basis in the sometimes complex and intertwined regulatory and administrative areas of reporting, repayment and future Medicare allocations.

Plant the seeds. Be proactive. Create winning compliance strategies in line with best claims handling procedures and business judgment rule.


Disclaimer: This publication is provided for informational purposes only.  It is not intended to constitute, and shall not be construed as, the rendering of legal, accounting, or business advice or opinion or professional services of any type.  Nothing herein constitutes the views of the firm or its clients or the endorsement of any particular case, principle, or proposition.  The contents of this publication should not be viewed as a substitute for the guidance, advice, or recommendations of a retained professional


Flagship Services Group is the premier Medicare and Medicaid compliance services provider to the property & casualty insurance industry. Our focus and expertise have been the Medicare and Medicaid compliance needs of P&C self-insureds, insurance companies, and third-party administrators. We specialize in P&C mandatory reporting, conditional payment resolution, and set aside allocations. Whether auto, liability, no-fault, or work comp claims, we have assembled the expertise, experience and resources to deliver unparalleled MSP compliance and cost savings results to the P&C industry. To find out more about Flagship, our team, and our customized solutions, please visit us at www.flagshipservicesgroup.com. To speak with us about any of our P&C MSP compliance products and services, you may also contact us at 888.444.4125 or info@flagshipsgi.com.

Tags: MSA, civil monetary penalties, Robert Finley, Flagship Services, CMP, MSP, Medicare, Medicare Second Payers, section 111

Robert J. Finley

Written by Robert J. Finley

Robert J. Finley, a partner with Hinshaw & Culbertson LLP, has litigation and trial practice experience focused in tort, employment and healthcare. He also counsels firm clients under health plans, auto, property/casualty, no-fault, and workers compensation policies on Medicare repayment and Medicaid reimbursement compliance. Robert advises Flagship Services Group on high value matters, in administrative hearings, and with educational solutions involving Medicare Secondary Payer issues. For more information, visit: https://www.hinshawlaw.com