Medicare Advantage Plans


by  Andrew H. Hook, CELA and Shannon A. Laymon-Pecoraro, Esq.

In an effort to reduce government spending and preserve the Medicare program, Congress enacted the Medicare Secondary Payer (“MSP”) Act in 1980. Prior to that time, Medicare was the primary payer for any covered medical expense, the only exception being those persons covered by Worker’s Compensation. With the adoption of the MSP Act, Medicare’s responsibility for medical expenses is reduced to only those expenses not covered from another source, such as another insurance plan, which includes health, Worker’s Compensation, automobile, liability, and no-fault insurance plans, known as a primary plan. As a result, Medicare can recover any payments that have been made, or can reasonably be expected to be made, that are the responsibility of a primary plan.

In cases when it is expected that the primary plan will either not pay for services or not pay promptly, Medicare may make conditional payments, thereby creating a Medicare lien. This lien must then be repaid by a primary plan or any entity that receives a third-party payment. The MSP Act therefore affects everyone involved in a MSP claim, including, but not limited to, any beneficiary, provider, physicians, state agency or attorney. Failure to comply with this requirement could result in Medicare’s ability to recover double damages.

For years, there has been a debate with regard to whether the MSP Act extends to private companies that contract with Medicare, typically under what is referred to as a Medicare Advantage Plan (“MAP”). Under a MAP, an individual elects to receive Medicare services from an insurance company of his choosing, Medicare pays the MAP a fixed fee, and the MAP assumes the insurance risk by providing Medicare Part A and B services. The United States District Court for the Eastern District of Virginia recently held that a Medicare Advantage Plan has a private right to recover under the MSP Act, and may pursue recovery from any entity that receives payment from a primary plan.

In Humana Insurance Co. v. Paris Blank, LLP, Humana, which made conditional payments as a MAP, sought recovery from various parties, including Paris Blank, LLP, a law firm representing a Plaintiff in a personal injury action as a result of an automobile accident. Paris Blank argued that Medicare was a private insurance company, and as a result, was not entitled to recover under the MSP Act, and specifically, that recovery could not be made against the law firm. Citing In re Avandia and a memorandum from the Centers from Medicare & Medicaid Services, the court essentially determined that Medicare, in contracting with the MAP, assigns the MAP its rights and responsibility in recovering from a primary plan. The Court then reasons that although the attorneys are not the primary plan, the MSP Act extends to any entity, including attorneys or law firms, receiving payment from the primary plan, and that as a result, the MAP could recover from an attorney whowas paid from the proceeds of a personal injury settlement.

The case at hand establishes precedence in the Commonwealth of Virginia and should be seen as a cautionary tale for any person or entity involved in personal injury actions. It is anticipated that more MAPs will begin pursuing its right to recovery, and when payment is not made in compliance with the MSP Act, seek double damages, as permitted under the MSP Act, from the parties involved. Personal injury victims and their counsel should consult with an experienced elder law attorney to minimize potential risks associated with MSP compliance.

Kit Kat

Ask Kit Kat – Pets & Domestic Violence

Hook Law Center:  Kit Kat, what can you tell us about pets and domestic violence?

Kit Kat:  Well, pets can become casualties in domestic abuse cases, but there are some good things happening that may help to change this picture. The Humane Society of the United States (HSUS) is lending its support to pending national legislation known as the PAWS Act, which would help families across the country experiencing domestic abuse to leave their abusive situation and take their pet(s) with them to transitional housing or a shelter. Currently, there is a patchwork of laws in about 30 states dealing with pets in domestic abuse situations, but that leaves almost half of the US not covered. In many shelters, pets are not allowed, so when a families exits their dwelling place, the pet is left to fend for itself, abandoned in the home, or worse, let out to roam free.

Many pets do not fare as well as Ginger, a calico cat in Michigan, who belonged to a family in crisis because of physical abuse to the mother and 4 children. After a decade of abuse, the mother fled the home with her 4 children. Unfortunately, they were unable to take Ginger with them. Ginger stayed behind with the husband. After he also left, a kind neighbor fed Ginger for 2 months through an open window. She was unable to bring Ginger to her house, because her husband was allergic to cats. Then, Lawyer Kate Chesney of the Immigrant Legal Advocacy Project intervened. She found Ginger’s family  a house which allowed cats. The house was quite a distance from the original location, so Lawyer Chesney contacted a shelter in Howell, Michigan which allows pets to care for Ginger in the interim. Ginger stayed there 3 weeks, before she could be transported to her original family’s new location. The trip in itself was quite a logistical feat! The new home was 15 hours away. The first 4 hours Ginger was driven by Jill Fritz of Michigan’s Humane Society. A canine (yes, the dogs helped, too) transport service drove her the next 10 hours. The final part was driven by Lawyer Chesney. Today, Ginger is thriving having been reunited with her original family.

If you would like to ask your local legislators to support the PAWS Act, go to humanesociety.org/paws-act. (Ruthanne Johnson, “Out of Darkness,” All Animals, May/June 2016, page 10 and 12.)

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