MAP and PDP private cause of action suits not just a fad

by | May 15, 2019

November 15, 2018
by Rafael Gonzalez, Esq.

If you are keeping up with Medicare Secondary Payer (MSP) trends and updates, then you know that Medicare Advantage Plans (MAPs) and Prescription Drug Plans (PDPs) private cause of action suits continue to be the rage, with case law arising in federal district and circuit courts across the country. When you add the recent announcement from the Centers for Medicare & Medicaid Services (CMS) that Medicare Advantage premiums will decline while plan choices and new benefits increase, it’s no wonder enrollment is projected to reach a new all-time high with more than 36 percent of Medicare beneficiaries expected to be enrolled in Medicare Advantage in 2019. With more Medicare beneficiaries switching from Medicare Parts A and B traditional coverage to Part C Medicare Advantage coverage, more and more of these MAPs will be providing your insured, and therefore your potential claimants, with Medicare benefits related to your claim. So, if you thought MAP and PDPs’ Medicare Secondary Payer private causes of action were a fad, think again.

Declining premiums likely to increase enrollment in Medicare Advantage
In its 2019 Fact Sheet released October 2018, CMS reported a decline in Medicare Advantage average monthly premiums—the lowest in three years. The release stated, “On average, Medicare Advantage premiums in 2019 is estimated to decrease by six percent to $28.00, from an average of $29.81 in 2018. Nearly 83 percent of Medicare Advantage enrollees remaining in their current plan will have the same or lower premium in 2019. Approximately 46 percent of enrollees in their current plan will have a zero premium.” To view CMS Fact Sheet releases, click here.

Access to Medicare Prescription Plans remains universal
Access to the Medicare Part D prescription drug program continues to remain universal in 2019 with 100 percent of beneficiaries having access to a stand-alone prescription drug plan. Earlier in 2018, CMS stated, “for a second year in a row, the average monthly basic Part D premiums are expected to fall from $33.59 this year to $32.50 next year due to additional tools to strengthen negotiations with drug manufacturers to lower the cost of prescription drugs.” View important prescription drug coverage updates here.

More plans being offered in 2019
MS also indicated, “Medicare Advantage will be offering approximately 600 more plans in 2019. The number of plans available to individuals to choose from across the country is increasing from about 3,100 to about 3,700—and more than 91 percent of people with Medicare will have access to 10 or more Medicare Advantage plans, compared to nearly 86 percent in 2018. Access to the Medicare Advantage program remains strong, with about 99 percent of people with Medicare having access to a Medicare Advantage plan.”

In addition, for the first time in 2019, “about 270 plans will be providing nearly 1.5 million enrollees with access to expanded health-related supplemental benefits, such as adult daycare services, in-home support services, caregiver support services, home-based palliative care and therapeutic massage; and reduced cost sharing and additional benefits for enrollees with certain conditions, such as diabetes and congestive heart failure, due to the agency’s reinterpretation of uniformity.”

Don’t expect access to these new supplemental benefits to stop either. CMS expects continued growth in 2020, as plans take advantage of this new flexibility to attract new beneficiaries. In addition, “more Medicare Advantage enrollees are projected to have greater access to important supplemental benefits such as dental, vision, hearing, over-the-counter items, meals, nursing hotlines, and transportation for medical services.The bottom line is that Medicare Advantage enrollment is projected to increase to an all-time high from the current enrollment of 20.2 million to 22.6 million in 2019, an 11.5 percent increase compared to 2018. Access the full CMS release here.

MAPs and PDPs are provided the authority to seek double damages
Although they didn’t always have legal standing, on June 28, 2012, MAPs and PDPs were provided authority to file MSP private causes of action when the United States Court of Appeals for the Third Circuit published its decision on Humana Medical Plan and Humana Insurance Company v. GlaxoSmithKline, LLC, concluding that any private party may bring an action under 42 U.S.C. §1395y(b)(3)(A), as it establishes a private cause of action for damages. As a result, the court found that private parties like Humana may bring suit for double damages when a primary plan fails to appropriately reimburse any secondary payer. In addition, since 42 C.F.R. §422.108 states that an Medicare Advantage Organization (MAO) will exercise the same rights to recover from a primary plan, entity, or individual that the Secretary of Health & Human Services (HHS) exercises under the MSP regulations, the court found that the Medicare Act treats MAOs the same way it treats the Medicare Trust Fund for purposes of recovery from any primary payer.

Since then, dozens of federal courts have ruled similarly, including on August 8, 2016, when the United States Court of Appeals for the Eleventh Circuit published its opinion on Humana Medical Plan Inc. v. Western Heritage Insurance Company, concluding that Medicare Advantage Plans may sue primary payers under the Medicare Secondary Payer Act private cause of action, and thereby seek double damages when such primary payers have failed to reimburse MAPs for payments made related to the claimed accident and injuries.

Additionally, on August 30, 2016, the United States Court of Appeals for the 
Eleventh Circuit published its opinion in MSP Recovery, LLC v. Allstate Insurance Company, concluding that a contractual obligation, without a judgment, settlement, award, or other payment, can satisfy the “demonstrated responsibility” requirement of the private cause of action provided for by the Medicare Secondary Payer Act (MSP Act) at 42 U.S.C. §§ 1395y(b)(2)(B)(ii),(b)(3)(A). The court therefore allowed assignee entities to seek double damages against no-fault, med-pay, and PIP primary payers because of their refusal to reimburse Medicare Advantage Plan payments made related to the underlying covered claim.

What does this mean for liability, no-fault, and workers’ comp payers?
With the increase in Medicare beneficiaries switching from Medicare Parts A and B traditional coverage to Part C Medicare Advantage coverage, it is more than likely that these MAPs will be providing your potential claimants with Medicare benefits; and, with expanding federal case law allowing Advantage and Prescription plans to seek reimbursement in the same manner as Medicare, including double damages, my prediction is that such efforts will not only continue, but will grow substantially throughout the country in all insurance lines.

With this in mind, it is important to stay informed and have a process in place to identify claims involving a Medicare beneficiary. Going forward, investigate if your claimants are receiving Medicare through a MAP or PDP and determine if medical care related to your claim has been paid through this coverage.


Centersfor Medicare & Medicaid Services. 2019 Medicare Advantage and Part D Prescription Drug Program Landscape. Accessed Oct. 29, 2018.

Centersfor Medicare & Medicaid Services. Prescription Drug Coverage – General Information. Accessed Oct. 29, 2018.

Department of Health & Human Services. Centers for Medicare & Medicaid Services Fact Sheet. Accessed Oct. 29, 2018.


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