MSA Fines – Recent Ruling Adds More Risk

In a recent ruling between Humana vs. Western Heritage Insurance, the courts upheld the rights of Medicare Advantage Organizations (MAOs) to sue for double damages for any costs they incurred that should have been paid by the primary carrier.

In a nutshell, MAOs will now have the same protections and rights as the Centers for Medicare and Medicaid Services (CMS).

Humana, the MAO in this case, argued that the plain language of the Medicare Secondary Payer (MSP) statute afforded them a broad right to use the Federal Court to recover funds they paid on their enrollee’s behalf. Additionally, the MSP provisions mandated that any recovery be in the form of double damages. The appellate court agreed.

This opens up another avenue for suits and damage recoveries. Savvy and efficient MAO companies now have a very clear incentive to go after primary payers – including workers’ compensation, auto and liability carriers – to maximize their profitability. This makes it even more important for primary payers to have a buttoned up MSA compliance process.