Eleventh Circuit Finds Medicare Advantage Plans Subject to Four-Year Statute of Limitations for Private Cause of Action Claims

by B. Smith

The Eleventh Circuit Court of Appeals dismissed a private cause of action claim brought by MSPA Claims 1 LLC (Plaintiff) against insurer Tower Hill (Defendants) finding that the suit was untimely filed based upon a four-year statute of limitations period. MSPA CLAIMS 1 LLC v. TOWER HILL PRIME INSURANCE CO et al., Eleventh Circuit 2022 U.S. App. LEXIS 22162 (August 10, 2022).

Background

The facts of the case were not in dispute. In 2012, a Medicare beneficiary enrolled in a Medicare Part C Advantage Plan (MAP) was attacked by a neighbor’s dog. The MAP paid medical providers $8,146.09 for treatment related to these injuries. The claim was settled in 2012 for $25,000 and the Defendants reported the settlement to the Centers for Medicare & Medicaid Services (CMS) pursuant to Section 111 Reporting requirements.

In 2015, the Plaintiff (as an assignee of the MAP) issued a Notice of Lien letter demanding payment from the Defendants for claims settled on June 22, 2012. This was the first time the Plaintiff learned of the settlement. A second demand letter was issued in 2018, and in August 2018 the Defendants sued under the private cause of action provisions of the Medicare Secondary Payer Act, (MSP Act) 42 U.S.C. § 1395y(b)(3)(A), seeking double damages for non-payment.

Among other arguments made for dismissal of the claim, the Defendants noted that the Plaintiff was barred from bringing a private cause of action claim as the lawsuit was filed over six years after CMS received notice of the settlement (in 2012) and was therefore barred by the three-year statute of limitations contained in 1395y(b)(2)(B)(iii) of the MSP Act. Plaintiff argued that the three-year limitations period did not began to run until the Plaintiff received actual notice of the settlement in 2015, and as such, the suit was timely filed in 2018. The district court determined that the suit was time barred based upon the four-year statute of limitations and the Plaintiff thereafter appealed the decision to the Eleventh Circuit.

Decision

On appeal, the Eleventh Circuit reviewed the provisions of the MSP Act and the private cause of action provisions contained therein. The Court noted that while MAPs have the same recovery rights as Medicare, they must separately seek reimbursement under the private cause of action provisions of the MSP Act and not 1395y(b)(2)(B)(iii), which only addresses actions brought by the United States and contains a three-year statute of limitations.

The Court determined that the private cause of action provisions that allowed parties other than the government to bring suit for non-payment did not contain a clear statute of limitations period. As such, the Court utilized the catch-all provisions Congress enacted for civil actions in 28 U.S.C. § 1658(a), which provides that “[e]except as otherwise provided by law, a civil action arising under an act of Congress enacted after” December 1, 1990 “may not be commenced later than four years after the cause of action accrues.”

The Court held that the Plaintiff’s cause of action “accrued” in 2012 when the Plaintiff’s assignor paid the Medicare beneficiaries medical bills and became eligible for reimbursement. Because this was more than four years after Plaintiff filed suit in 2018, the Court found that the suit was not timely filed.

Considerations

The Eleventh Circuit’s use of the four-year statute of limitations period instead of the three-year period in the MSP Act may, on its face, seem to expand MAPs’ recovery rights. However, the Court went on to find that the cause of action to bring a suit accrued when bills were paid and not when settlement was reported to CMS pursuant to Section 111. MAPs have become more and more aggressive, not only in their attempt to seek double damages under the private cause of action provisions of the MSP Act, but also by filing suits based upon the False Claims Act to expand their recovery rights.

With implementation of the PAID Act, Self-Insured Employers, Liability Insurers, Workers’ Compensation and No-Fault Insurers can access all Part C and D plan information and prevent future suits with a proactive Medicare Conditional Payment program and process. However, getting PAID Act information from CMS is not automatic and you or your vendor must have the appropriate software in place to do so.

Key Take-Aways

1. 1. Make sure that you are receiving PAID Act Information as part of your query response file. Part C and D plan holders have access to your Section 111 Reporting data and are becoming more aggressive in seeking recovery from insurers and self-insured employers.
   2. Just having this information as part of your query is not enough. Establishing a Medicare Compliance process and procedure to identify and dispute conditional payments is key to help avoid double or triple damages.
   3. Aggressively disputing conditional liens can potentially save thousands of dollars on each claim.
   4. Consider whether you need a new Section 111 Reporting platform that includes PAID Act updates.

For more on building a conditional payment/Medicare compliance program and addressing part C and D liens with IMPAXX’s QueryGuard, please contact the IMPAXX Settlement Consulting team at [email protected].