Humana Medicare Advantage Plan Goes West in Search of Unpaid Claim by Auto Insurer Hartford

Two weeks ago I sent out an email to fellow plaintiff attorneys expressing my “sky is falling” warning that a private Medicare plan was suing plaintiff attorneys for unpaid reimbursements in places other than Washington State.

Well, now Humana is here (Humana Health Plan, Inc., v. Hartford Casualty Insurance Company, Case No. 2:17-cv-1407, US District Court, Western District of Washington).

Humana isn’t suing a plaintiff attorney this time. It is suing the injured person’s first party insurer, the Hartford. While that might give plaintiff attorneys some relief to think it’s not the lawyer or the client, keep in mind this is what Humana did in those other circuits BEFORE it started suing plaintiff attorneys.

And if you thought liability carriers were paranoid about Medicare and settlements before, wait until Humana gets the Hartford to pay not just the $161,853.14 it is owed, but another $161,853.14 in penalty…plus fees and costs. How paranoid do you think they are going to get then?

Read the complaint off PACER, or just consider this part of it:

44. Defendant [Hartford] disbursed the settlement payment to Enrollee in December 2015. Although Enrollee was primarily responsible for reimbursing these funds within 60 days of Defendant’s payment, 42 C.F.R. § 411.24(h), Defendant remained responsible to reimburse Humana under applicable federal regulations, e.g., 42 C.F.R. § 411.24(i)(1), and, by failing to make advance arrangements to see that this occurred, assumed the risk of being responsible to ensure that Humana was paid in the event Enrollee breached its obligations.

45. Enrollee did not comply with his repayment obligations, meaning Defendant is responsible for reimbursing Humana, even though it has already paid Enrollee.

46. Humana has repeatedly sought information from Defendant related to its right to recovery under the MSP Law, but Defendant has refused to provide any information about the settlement.

(Id at page 11, 44-46)

The enrollee was someone’s client. And that attorney may be next if Hartford is able to escape this snare by arguing the money was sent to the "enrollee’s" lawyer. The biggest mistake the Hartford made here is the same mistake the lawyers who are being sued did – they didn’t communicate with the Medicare Advantage plan.

The bigger issue may be the status of Parra vs. Pacificare of Arizona, Inc., 715 F.3d 1146 (2013). Parra gives us an idea of how the 9th Circuit views Medicare Advantage plans using Medicare’s remedies to collect unpaid reimbursements. There are two problems with Parra – 1) every other circuit that’s weighed in on this issue has given the Medicare Advantage plans the win, relying mostly on Chevron deference to get there, and 2) Parra isn’t exactly on point, because the issue before the 9th Circuit in that case had to do with wrongful death and survivor claims. No matter who prevails here, if it goes up, and the 9th swats it either way, one of these parties may be motivated enough to send this up to the Supreme Court. Then who will our current Court side with – health insurers trying to recoup Medicare dollars, or the P&C insurers who are ignoring them? And when that goes down, the Medicare Advantage plans are going to be looking for the next pocket…ours.

Please make sure you identify whether or not your client has a Medicare Advantage plan. These are private plans administered by private health plan companies but funded by Medicare dollars, and the percentage of folks choosing private Medicare over public Medicare is growing - over 1/3, and expected to hit 1/2 in less than five years. You don’t have to agree with what they are asking you to pay, but you do have to engage them, and it would be wise to pay them something. The court is likely to look at a value dispute much differently than an outright failure to pay.

And guess who gets the penalty money? It’s not Medicare…

Featured Posts
Recent Posts
Search By Tags
No tags yet.
Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square