A decision this week by Judge Bernard A. Friedman of the United States District Court for the Eastern District of Michigan Southern Division, in Duncan v. Liberty Mutual, dismissed a no-fault plaintiff’s claim for Medicare Secondary Payer Act (MSPA) double damages…again. Judge Friedman opined that, Liberty Mutual’s “…behavior saves it from liability for double damages.” The court noted that the plaintiff had no standing to pursue the double damage claim as well, further justifying the dismissal.

The Plaintiff’s decedent was involved in a motor vehicle accident (MVA). At the time of the accident he was a Medicare beneficiary. Immediately on being notified of the motor vehicle accident, Liberty Mutual, pursuant to federal law, reported the claim to Medicare through CMS. CMS notified Liberty Mutual directly of the conditional payments it had made for claimed accident related medical expenses. Liberty Mutual, challenged CMS’s claim on the basis that none of the medical care was covered since the accident was caused by plaintiff suffering a heart attack which led to the accident, not that the accident caused the heart attack. Ultimately CMS agreed and advised Liberty Mutual that they had zero reimbursement interest in the claim.

Plaintiff’s Estate had concurrently pursued a state court no-fault PIP case. Liberty Mutual challenged this suit on the same basis as raised in the CMS direct recovery claims. However, following trial in state court, the jury returned a verdict establishing causation. Liberty Mutual immediately brought this development to the attention of CMS, which then reinstated its identified conditional payment interest with Liberty. Liberty placed the amount of the conditional payments identified by CMS into escrow for reimbursement to Medicare, and requested the final amount of the Medicare demand for disbursement of the funds. Upon receipt, full reimbursement was made.

After Liberty had notified CMS of the state court verdict, plaintiff’s Estate amended their complaint claiming entitlement to double damages under the MSPA “private cause of action” provisions. The case was removed to the federal court before Judge Friedman who, after hearing, dismissed the federal claim finding nothing done wrong by Liberty in addressing the Medicare direct recovery efforts. Plaintiff appealed to the U.S. 6th Circuit Court of Appeals, which remanded back to Judge Friedman to consider the issue of standing of the plaintiff to bring the double damage claim.

The present opinion of Judge Friedman expressly detailed the events and actions of Liberty in directly dealing with CMS under the MSPA, finding that Liberty was permitted to contest liability; had behaved appropriately in challenging administratively Medicare’s initial decision on conditional payments, and once liability was determined, Liberty conceded its responsibility to reimburse Medicare.

Additionally, Judge Friedman explained that the plaintiff had not demonstrated any concrete direct harm resulting from Medicare paying for the care “conditionally”, with reimbursement by Liberty thereafter, concluding that plaintiff thus had no standing to bring the double damage claim.

Liberty Mutual is represented by Kitch no-fault leaders, Marcy Tayler and Amanda Kakos, with the assistance of Richard Joppich who is the firm’s Medicare/Medicaid and private health insurance reimbursement practice counsel. A copy of the decision can be found here.

No-Fault Carrier Actions Saved it from Medicare Double Damages

Key Contacts

Related Services