MSP

Milberg’s MSP Practice Group focuses on Medicare Secondary Payer Act litigation. Specifically, this litigation group pursues the reimbursement rights of Medicare Part C entities under the Medicare Secondary Payer Act. When Medicare Part C entities make conditional payments for accident-related expenses incurred by Medicare beneficiaries, the Medicare Secondary Payer Act entitles them to seek reimbursement of these payments from insurers, known as primary payers, who are responsible for those bills.

Historically, many primary payers have failed to report their primary payer status and to properly reimburse Medicare Part C entities.

Milberg serves as litigation counsel for the NASDAQ listed Life Wallet, and is currently engaged in nationwide lawsuits seeking to recover billions of dollars from recalcitrant insurers. The MSP Practice Group is primarily located in Miami, Florida, but incorporates attorneys from multiple Milberg offices.

The MSP Practice Group is led by Senior Partner Dan Bryson.

Medicare Part C, Explained

Medicare is the federal health insurance program for people ages 65 and over, as well as some younger people with disabilities.

Created in 1965, Medicare covers around 65 million Americans today. It is the second largest program in the federal budget, accounting for about 12 percent of spending. Medicare enrollees have tripled since 1972 and are expected to reach nearly 90 million in 30 years due to an aging population.

Originally, Medicare consisted of Parts A and B, in which the federal government pays providers directly for their medical care. Part C—the Medicare Advantage program—was established in 1997. Under Medicare Part C, a covered individual may choose to have a private insurer of their choice provide Medicare Part A and B benefits.

The Medicare Secondary Payer Act

The Medicare Secondary Payer Act (MSP Act) was enacted in 1980 to reduce Medicare costs by shifting them to private insurers that have primary payment responsibilities.

Prior to this Act, Medicare often acted as a primary insurer and paid for an enrollee’s medical expenses, even when they had other insurance that covered the same costs, or when a third party had an obligation to pay for them. The Centers for Medicare & Medicaid Services (CMS) explains that the MSP provisions protect the Medicare Trust Fund by ensuring that Medicare, “does not pay for items and services that certain health insurance or coverage is primarily responsible for paying.”

According to the MSP Act, if payment for covered services has been or is expected to be made by another party, Medicare does not have to pay. In situations where a Medicare beneficiary has any other insurance available from a “primary plan,” Medicare is the “secondary payer.”

A primary plan, as defined in the Act, includes:

• Group health plans
• Workers’ compensation plans
• Automobile and liability insurance policies (including self-insurance)
• No-fault insurance plans

For example, if somebody covered by Medicare is injured in a car crash, they may also be able to recover medical costs from their own health insurance company, their no-fault auto insurance, or the at-fault driver’s auto insurance.

To address this coverage overlap, the MSP Act allocates liability between Medicare and other insurers. As the secondary payer, Medicare is only responsible for paying excess medical costs if and when the amount paid by the primary plan is exhausted.

Primary Payer Reimbursements to Medicare

In cases where a primary plan “has not made or cannot reasonably be expected to make payment” with respect to a covered expense, Medicare may make the initial payment, “conditioned on reimbursement” from the primary plan.

The law stipulates that a primary plan must reimburse Medicare for these conditional payments, “if it is demonstrated that such primary plan has or had a responsibility to make payment” for a covered expense.

Enforcement mechanisms in the MSP Act create government and private causes of action for double damages against primary plans that fail to provide primary payment or appropriate reimbursement.

However, until revisions were made to the MSP Act, the ability of Medicare to recover conditional payments was hampered by lack of enforcement. The Medicare, Medicaid, and SCHIP Extension Act of 2007 (“MMSEA”) imposed new data collection and mandatory reporting duties on primary payers, requiring them to determine the Medicare entitlement of all claimants and report specific claim information to the CMS. These requirements gave CMS greater tools to enforce the MSP Act.

Court decisions have also led to important developments in the MSP Act, including a 2022 ruling in the Second Circuit, which allowed private insurers providing Medicare Advantage plans to sue primary insurers to recoup MSP Act damages using the law’s private right of action.

The U.S. Justice Department has also agreed with and adopted the legal position that Medicare subcontractors (i.e., First Tier Entities, MSOs, IPAs) that have paid for a Medicare beneficiary’s medical expenses can file suit under the MSP Act. Writing in an amicus brief, the U.S. stated that, “Allowing the subcontractor to recover in these circumstances advances the goals of the Medicare Secondary Payer statute.”

Life Wallet

Founded in 2014 as MSP Recovery, Life Wallet has disrupted the outdated healthcare reimbursement system using data and analytics to identify and recover payments made by CMS and Medicare Advantage providers. Its proprietary algorithms analyze large volumes of medical claims information to identify reimbursement opportunities.

In a 2022 statement, Life Wallet announced it had entered into a strategic partnership with Milberg to litigate MSP Act recovery cases.

According to Life Wallet, its portfolio of assigned claims represents tens of billions of dollars worth of potentially recoverable claims.

Milberg is committing significant resources to these cases to ensure insurance companies are paying their fair share. When primary payers fail to make reimbursements, it costs the healthcare system—and ultimately, taxpayers—billions of dollars per year.

Our partnership with Life Wallet represents an exciting new chapter in our firm’s longstanding mission to hold big companies accountable and effectuate corporate reforms through litigation.