A recent decision rendered by the U.S. Eleventh Circuit Court of Appeals held that after settling with plaintiff, defendants were obligated to directly reimburse Humana for medical expenses paid on behalf of an enrollee’s accident related injury. Humana Med. Plan, Inc. v. W. Heritage Ins. Co., No. 15-11436, 2016 U.S. App. LEXIS 14509, at *1, *3-5 (U.S. 11th Cir. 2016). In the settlement agreement between the parties regarding claims for personal injuries, the defendants agreed to pay $115,000, and the plaintiff agreed to release the defendants from any claims related to the subject incident. Id. at *4. The plaintiff further represented in the settlement agreement that there was no Medicare, or other lien or right to subrogation, and agreed to indemnify the defendants against any such lien. Id.
Despite the terms of the settlement agreement, the Humana Court held that under the Medicare Secondary Payer Act, 42 U.S.C. §1395y(b)(3)(A), Humana maintained a private cause of action and was entitled to recover double damages against the defendants for failure to reimburse Medicare within 60 days of payment to a Medicare beneficiary. Id. at *23-24. Humana argued that the private insurer defendants, became the primary payer under the statue and against whom the statute permitted Humana to seek recovery. Id. at *8-11.
The defendants argued it lacked the knowledge that Medicare made any medical payments for the plaintiff’s accident related injuries. Id. at *22. The Court held that the defendants had the ability to determine the nature of plaintiff’s health insurance coverage and should have ensured Humana’s interests were protected, and reimbursed for any payments made for the plaintiff’s accident related injuries. Id. at *23-25. The Court found that the defendants became obligated to directly reimburse Humana when it settled with the plaintiff and no party had reimbursed Humana. Id.
AVOID THE SAME MISTAKE: Boyd & Jenerette has created specific procedures to protect our clients against similar outcomes. Here are a few practice pointers from our workers’ compensation team:
- Identify whether the claimant is a Medicare Advantage Plan enrollee during the discovery process.
- Send updated discovery requests after October, when claimants often change plans due to open enrollment.
- Obtain copies of all claimant’s health insurance cards during deposition.
- Send subpoenas to the primary Medicare Advantage Plan carriers to determine if coverage exists and if any accident related medical expenses have been paid by that carrier.
- If a Medicare Advantage Plan has made medical payments for an enrollee’s accident related injuries, send a notice to that carrier that all compensable medical benefits are being paid under workers’ compensation and there should be no additional medical benefits incurred by the claimant for the work injury outside of workers’ compensation.
- Be sure to notify your defense counsel prior to settlement if you know, or have reason to believe, that a claimant is enrolled in a Medicare Advantage Plan.
- Ensure that any lien amounts are taken out of the total settlement amount and consider paying the Medicare Advantage Plan carrier directly.
*If you have any questions, feel free to contact Boyd & Jenerette for additional legal guidance in this matter or click on the link below to view our Workers’ Compensation & Employment Attorneys.