In an important new decision, the United States District Court for Connecticut in Aetna v. Guerrera, 2020 WL 4505570 (D. Conn. August 5, 2020) ruled, in part, that the alleged self-insured supermarket was a primary plan and liable for “double damages” for its failure to reimburse Aetna’s (a Medicare Advantage Plan, or “MAP”) recovery claim. As such, the court entered an order in favor of Aetna for $19,708.32 (twice the amount of Aetna’s original claim for $9,854.16).
This decision comes in follow-up to the court’s prior 2018 ruling in this case in which the court ruled, in part, that MAPs could sue primary plansfor “double damages” under the Medicare Secondary Payer’s (MSP) private cause of action provision. See our prior article summarizing the court’s 2018 decision.
The court’s new ruling in Aetna v. Guerrera awarding “double damages” makes this the second court to do so over the past few years, with many readers likely to recall the 11th Circuit’s ruling in Humana v. Western Heritage Insurance Co., 832 F.3d 1229 (11th Cir. 2016), where the court in that action levied “double damages” against an insurer. Also, it is noted that there has been a growing number of rulings in other jurisdictions, finding that MAPs can sue for “double damages” under the MSP’s private cause of action provision over the past several years. View our State by State Guide to Medicare Advantage in the courts here.
In the bigger picture, the court’s decision in Aetna v. Guerrera (along with the other recent court rulings finding that MAPs can sue insurers for double damages) underscores the importance of making sure MAP recovery claims are being properly considered as part of claims and settlement practices.
For those interested in a deeper dive into the Aetna v. Guerrera decision, the author breaks down this ruling as follows:
In this liability case, Nellina Guerrera (Ms. Guerrera) was allegedly injured at a Connecticut Big Y Supermarket. Through counsel, Ms. Guerrera filed a claim against Big Y. The parties eventually reached a $30,000 settlement.
Ms. Guerrera was an Aetna MAP enrollee, and Aetna allegedly paid $9,854.16 for accident-related medical treatment. Shortly after the accident, Aetna reportedly placed Big Y on notice that it was asserting a lien for the value of the medical expenses it covered. Big Y allegedly agreed that it would not send the full amount of any settlement to Ms. Guerrera (or her attorneys) without first addressing Aetna’s claim. Nevertheless, the full $30,000 settlement payment was sent to Ms. Guerrera and her lawyers. Neither Ms. Guerrera nor Big Y reimbursed Aetna for the covered expenses.
Aetna then filed suit to recover its payments, which, in part, included a private cause of action (PCA claim) for double damages against Big Y, Ms. Guerrera, her law firm, and her individual attorneys. Each of these parties then moved to dismiss Aetna’s action, in part, for lack of subject matter jurisdiction.
In a 2018 decision, the court ruled that the MSP’s PCA statute applied to Big Y (allowing Aetna’s claim to proceed against Big Y), but not against the other parties as it did not consider these other parties to be “primary plans” as defined by the MSP. See, Aetna v. Guerrera, 300 F. Supp.3d 367 (March 13, 2018).
Following the court’s 2018 ruling, Aetna refiled its claim per the court’s ruling and moved for partial summary judgment alleging, in part, that Big Y was liable for double damages under the MSP which is now part of the court’s new ruling in this new decision which is the main focus of this article. Also, Aetna brought new claims alleging different causes of action against Ms. Guerrera, her law firm, and her individual attorneys.
Court rules that Big Y is a primary plan under the MSP
In challenging Aetna’s PCA claim, Big Y asserted several arguments that it should not be considered a primary plan under the MSP, and therefore, not liable to reimburse Aetna’s claim.
In addressing these arguments, the court first outlined several key MSP provisions for consideration to set the stage for its analysis as follows:
Referenced MSP provisions and applicable facts
The court noted that the term “primary plan” under the MSP is defined, in part, as “a workmen’s compensation law or plan, an automobile or liability insurance policy or plan (including a self-insured plan) or no fault insurance[.]”42 U.S.C. § 1395y(b)(2)(A).
Next, the court noted that under the MSP, a primary plan must reimburse Medicare if it is “demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service” paid by the secondary payer. 42 U.S.C. § 1395y(b)(2)(B)(ii). In addition, it was noted that this subsection further provides that “[a] primary plan’s responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon the recipient’s compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan’s insured, or by other means.” 42 U.S.C. § 1395y(b)(2)(B)(ii).
The court further noted that the courts “have consistently held that a tortfeasor, insured or self-insured, can be a “primary plan” for purposes of the MSP Act.” See 42 U.S.C. § 1395y(b)(2)(A) (“An entity that engages in a business ... shall be deemed to have a self-insured plan if it carries its own risk [whether by a failure to obtain insurance, or otherwise] in whole or in part.”).
The court then turned to relevant facts and noted that although Big Y had liability insurance, this coverage was subject to a $350,000.00 per occurrence retention. Accordingly, the court considered Big Y as “self-insured” for the first $350,000.00 of any claims brought against it. The court then noted that Ms. Guerrera’s $30,000 settlement resolved all her claims (economic and non-economic), to include her medical expenses and that Big Y conditioned payment of the settlement upon signing Ms. Guerrera’s signing of the release. Based on these facts, Aetna argued that Big Y’s demonstrated responsibility under the MSP entitling it to recover from Big Y.
After setting this stage, the court addressed Big Y’s claim that is was not a primary plan under the MSP.
Court rejects Big Y’s arguments that it is not primary plan
Big Y argued Aetna’s motion for summary judgment should not be granted as there remained factual disputes as to its alleged primary plan status, arguing that it was not a primary plan for many reasons including: that it had always denied liability; that the settlement represented a “nuisance settlement” in which it denied liability; the agreement contained a broad indemnity and hold harmless agreement; and that the settlement did not identify the purpose of the settlement funds nor allocate the funds between Ms. Guerrera’s various claims.
Based on these general positions, Big Y argued the settlement payment, being conditioned on the signing of a release, was not dispositive as to its liability since the MSP only provides that primary responsibility “may be demonstrated” by a settlement payment conditioned upon the signing of a release (even without an admission of liability). See 42 U.S.C. § 1395y(b)(2)(B)(ii). Accordingly, Big Y argued that its payment did not, of itself, establish primary responsibility.
The court, however, rejected Big Y’s argument finding the statute provides that responsibility for payment “may be demonstrated” by a settlement payment conditioned upon the signing of a release, “or by other means.” In this regard, the court noted that the statute provides a non-exclusive list by which responsibility is demonstrated and specifically contemplates that there may be other means by which responsibility for payment can be demonstrated.
In addition, the court rejected Big Y’s argument that the fact the settlement agreement did not allocate funds to cover Ms. Guerrera’s medical expenses created a genuine issue of material fact as to its reimbursement obligation finding that the MSP “does not require, as a factual matter, a deternation as to the purpose of the settlement payment. It requires only that the settlement involve “payment for items or services included in a claim against the primary plan.”
On this point, the court noted that Ms. Guerrera’s claim included a claim “for medical expenses and the settlement resolved all of her claims, which, of necessity, included the claim for medical expenses.” Further, the court noted neither party addressed the issue of whether appropriate reimbursement was made and there was, therefore, no dispute that it was not.
Accordingly, the court ruled there was “no genuine issue of fact as to whether Big Y is a primary plan under the MSP Act.”
Aetna is entitled to “double damages” under the MSP
After finding Big Y was in fact a primary plan under the MSP, the court turned to the question regarding whether Aetna was entitled to double damages under the MSP’s PCA statute. On this point, the court started by noting the statutory language of the PCA statute and then made general reference to several decisions from other jurisdictions noting the PCA allowed for double damages when this provision applied.
From there, the court ruled Aetna was entitled to $19,702.32 (double the amount of Aetna’s original lien claim of $9,854.16). Further, the court noted, in an endnote, that to the extent Big Y argued Aetna’s recovery should be reduced by procurement costs, it would reject this position based on the court’s ruling in Western Heritage referencing the court’s conclusion in that case that a “beneficiary’s procurement costs do not offset a [MAP’s] recovery if the [MAP] must litigate to secure repayment.”
Building a MAP Game Plan – Avoiding “Double Damages”
The court’s decision in Aetna v. Guerrera, levying double damages against the insurer, demonstrates the critical importance for claims payers to ensure MAP lien claims are being properly addressed as part of the settlement process to avoid similar private cause of action claims.
As noted earlier in this article, MAPs have generally been quite successful in establishing the right to sue claims payers for double damages in several jurisdictions. Having a MAP game plan is the key to reduce the potential of PCA/double damages claims. While a complete examination into the applicable components is beyond the scope of this article, in general, this involves: recognizing that MAPs are more aggressively pursuing their recovery rights; determining the Medicare plan type; obtaining/disputing MAP liens; settlement strategies to ensure MAP liens are properly resolved and reimbursed.
ISO Claims Partners has been the industry leader in MSP protocol development. We stand ready to assist insurers and claims payers address MAP lien claims and build protocols to help you stay compliant and avoid double damages claims. Click here for more information on our MAP services.
 Under the MSP, the term “primary plan” is defined at 42 U.S.C. § 1395y(2)(A)(ii) as follows:
In this subsection, the term “primary plan” means a group health plan or large group health plan, to the extent that clause (i) applies, and a workmen’s compensation law or plan, an automobile or liability insurance policy or plan (including a self-insured plan) or no fault insurance, to the extent that clause (ii) applies. An entity that engages in a business, trade, or profession shall be deemed to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance, or otherwise) in whole or in part.
This term is also defined at 42 C.F.R. § 411.21 as follows: “Primary plan means, when used in the context in which Medicare is the secondary payer, a group health plan or large group health plan, a workers’ compensation law or plan, an automobile or liability insurance policy or plan (including a self-insured plan), or no-fault insurance.”
 The MSP’s private cause of action section, codified at 42 U.S.C. § 1395y(b)(3)(A), states as follows: “There is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).”
 The following United States Circuit Courts of Appeals have ruled that MAPs can sue for double damages: In re Avandia, 685 F.3d 353 (3rd Cir. 2012) and Humana v. Western Heritage Insurance Co., 832 F.3d 1229 (11th Cir. 2016).
In addition, the following United States District courts have ruled (or strongly indicated) that MAPs can sue claims payers for double damages: MAO-MSO Recovery II, LLC v. Mercury Insurance, 2018 WL 3357493 (C.D. Calif. May 23, 2018); MAO-MSO Recovery II, LLC v. Farmers Insurance Exchange, 2018 WL 2106467 (C.D. Calif. May 7, 2018); Aetna v. Guerrera, 300 F.Supp.3d 367 (D. Conn. March 13,2018); MAO-MSO Recovery II, LLC v. State Farm, 2018 WL 340021 (C.D. Ill. January 9, 2018); Collins v. Wellcare Healthcare Plans, Inc., 73 F.Supp.3d 653 (E.D. La. 2014); MSP Recovery Claims Series LLC v. Plymouth Rock Assurance Corporation, 2019 WL 3239277 (D. Massachusetts, July 18, 2019); MSP Recovery Claims, Series LLC v. Phoenix Insurance Company, 2019 WL 6770981 (N.D. Ohio, December 12, 2019); MSP Recovery Claims, Series LLC v. Grange Insurance Company, 2019 WL 6770729 (N.D. Ohio, December 12, 2019); MSP Recovery Claims, Series LLC v. Progressive Corporation, 2019 WL 5448356 (N.D. Ohio, September 17, 2019); Humana Ins. Co. v. Bi-Lo, LLC, 2019 WL 4643582 (D. South Carolina, September 24, 2019); Cariten Health Plan, Inc. v. Mid-Century Ins. Co., No.: 2015 WL 5449221(E.D. Tenn. 2015); Humana Ins. Co. v. Farmers Tex. Cnty. Mut. Ins. Co., 95 F.Supp.3d 983 (W.D. Tex. 2014); Humana v. Shrader, 584 B.R. 658 (S.D. Tex. March 16, 2018); Humana Ins. Co. v. Paris Blank LLP, 187 F. Supp.3d 676 (E.D. Va. 2016).
 Aetna v. Guerrera, 2020 WL 4505570, at *2.
 Aetna’s claims against Ms. Guerrera, the law firm, and her individual attorneys are not within the scope of this article which focuses on Aetna’s PCA claim against Big Y as an insurer. Briefly, Aetna brought an action against Ms. Guerrera for breach of contract based on certain provisions in the MAP insurance policy. The court, in general, found that the law firm was not a party to the MAP contract and could not be liable for breach of contract under Connecticut law. Aetna v. Guerrera, 2020 WL 4505570, at *10. However, the court found that Aetna could potentially have an enforceable contract breach claim against Ms. Guerrera which would be subject to further factual analysis thereby making summary judgement inapplicable at this time. Id. From another angle, Aetna also alleged that each of these parties had a fiduciary relationship with Aetna requiring them to make sure it reimbursed its claim. However, the court rejected this argument finding none of these parties owed a fiduciary duty to Aetna. Likewise, Aetna alleged that by virtue of the notices of its lien it allegedly gave Big Y, a fiduciary relationship between it and Big Y requiring Big Y to ensure its interests were addressed. However, the court rejected this argument finding that no fiduciary existed between Aetna and Big Y. Id. at *12.
 Aetna v. Guerrera, 2020 WL 4505570, at *6.
 Aetna v. Guerrera, 2020 WL 4505570, at *6. The court also cited Collins, 73 F. Supp. 3d at 666 (“Congress amended the MSP in 2003 to include tortfeasors and their insurance carriers” within the definition of a primary plan.); Brown v. Thompson, 374 F. 3d 253, 261–62 (4th Cir. 2004) (finding that Medicare, as a secondary payer, was entitled to reimbursement from a tort settlement paid by a self-insured tortfeasor recognizing that the act provides that “a business can create a self-insured plan through its failure to obtain insurance” which evidenced Congressional intent to give the term “self-insured plan” a broad definition.). Id.
 Aetna v. Guerrera, 2020 WL 4505570 at *6.
 Id. at *7.
 Id. On this point, the court noted Hadden v. United States, 661 F.3d 298, 302 (6th Cir. 2011) (noting that there are “several ways in which a primary plan’s ‘responsibility’ can be demonstrated for purposes of [Section 1395y(b)(2)(B)(ii)]”); see generally Horne v. Flores, 557 U.S. 433, 454 (2009) (noting that “[u]se of the disjunctive ‘or’ makes it clear that each of [FED. R. CIV. P. 60(b)(5)] three grounds for relief is independently sufficient [to warrant relief from a judgment]”).
 Aetna v. Guerrera, 2020 WL 4505570 at *7
 Id. It is noted that the court recognized that “[t]o be sure, whether a settlement (or other post-litigation) payment was for medical expenses paid by an MAO may, under different circumstances, be a fact over which a genuine dispute exists, referencing, Harvey v. Fla. Health Scis. Ctr., Inc., 728 F. App’x 937, 945–46 (11th Cir. 2018) (MSP Act did not require reimbursement where arbitration award explicitly stated that no award for the payment of medical expenses had been included.). However, it in relation to Guerrera it noted that “where, as here, there is no dispute that the underlying litigation that was settled did, in fact, include a claim for the payment of medical expenses, and such claim was settled with the payment of monies in exchange for a release, the plaintiff has demonstrated that the alleged tortfeasor, here Big Y, is a primary plan under the MSP Act.” Id.
 Aetna v. Guerrera, 2020 WL 4505570 at *8. On this point, the court, in an endnote, further rejected rejects Big Y’s argument that its express denial of liability raises a question of fact as to whether Big Y had responsibility to pay Guerrera’s medical expenses noting this argument:
[R]uns directly counter to the express language of the statute. See 42 U.S.C. § 1395y(b)(2)(B)(ii) (“responsibility ... may be demonstrated by a ... payment conditioned upon the recipient’s ... release (whether or not there is a determination or admission of liability)”). And to the extent that Big Y would assert that the secondary payer is required to prove the settling tortfeasor’s liability to the plan enrollee when there has been an express denial of liability, support for this contention is found nowhere in the statute and Big Y has cited to no case law that requires such an unwieldy result. Aetna v. Guerrera, 2020 WL 4505570 at *8, n 6.
 As outlined in n.2, the MSP’s private cause of action section, codified at 42 U.S.C. § 1395y(b)(3)(A), states as follows: “There is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).”
 In this regard, the court referenced these prior decisions as follows:
The courts have generally recognized this provision’s allowance for double damages. See, e.g., Mason v. Amer. Tobacco Co., 346 F.3d 36, 42–43 (2d Cir. 2003) (recognizing an individual’s right to double damages from a primary plan that wrongfully refused payment); Manning v. Utils. Mut. Ins. Co. Inc., 254 F. 3d 387, 391–92 (2d Cir. 2001) (same); In re Avandia, 685 F.3d at 359 (“[W]e find that the provision is broad and unambiguous, placing no limitations upon which private (i.e., non-governmental) actors can bring suit for double damages when a primary plan fails to appropriately reimburse any secondary payer emphasis added)); MSPA Claims 1, LLC v. Kingsway Amigo Ins. Co., 950 F.3d 764, 767 (11th Cir. 2020) (noting that the Private Cause of Action provision “rewards successful plaintiffs with double damages”); Stalley v. Catholic Health Initiatives, 509 F.3d 517, 527 (8th Cir. 2007) (noting that individuals “could recover double damages to vindicate their private rights when their primary payers fail to live up to their obligations”). Aetna v. Guerrera, 2020 WL 4505570, at *8
 Aetna v. Guerrera, 2020 WL 4505570, at *8, n. 7 citing Western Heritage, 832 F.3d at 1240.