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The Eleventh Circuit rules that the MSP’s three-year “claims-filing” statute is not a prerequisite for filing a private cause of action recovery claim

By Mark Popolizio  |  February 27, 2020

In reversing a lower court decision, the United States Circuit Court of Appeals (Eleventh Circuit)[1] in MSPA Claims 1, LLC v. Kingsway Amigo Insurance, 2020 WL 728625 (11th Cir. February 13, 2020) ruled that compliance with the Medicare Secondary Payer’s (MSP) “claims-filing” statute was not a prerequisite for filing a private cause of action (PCA) recovery claim.[2]

Summary

In this case, the assignee of a Medicare Advantage Plan (MAP) filed a PCA claim against a liability insurer for reimbursement of medical bills it paid for its enrollee’s MAP coverage. The insurer argued that this claim was barred under the MSP’s claims-filing provision since the MAP did not request reimbursement of its bills within three years from the dates of service.

The Eleventh Circuit, however, disagreed, ruling, in part, that while the MSP’s claims-filing statute permits the government (or the MAP in this case) to submit bills for reimbursement, it does not require that it do so as a prerequisite to filing a MSP recovery claim. Further, the court declined to view the claims-filing statute as a limitations provision capable of barring MSP recovery actions on timeliness grounds – nothing that does so would render meaningless the MSP’s separate three-year statute of limitations (SOL) provision (often referred to as the SMART Act’s SOL). Whether MSPA’s claim was barred by the SMART Act’s SOL was not before the court in this action.

A more detailed overview of this decision is outlined below as follows:

Facts

On April 29, 2012, an individual enrolled through a MAP, Florida Healthcare Plus (“Florida Healthcare”), was injured in an automobile accident. The other driver was insured by the defendant, Kingsway Amigo Insurance (“insurer”). Florida Healthcare paid for some of its enrollee’s accident-related treatment and later assigned its potential recovery rights to MSPA Claims 1, LLC (“MSPA”). On March 28, 2013, the enrollee settled with the insurer. 

Florida Healthcare allegedly issued $21,965 in payments for its enrollee’s treatment from the accident date through July 26, 2012. In November 2015, after purportedly learning about this settlement, MSPA demanded reimbursement from the insurer and then filed its PCA claim about a month later. The insurer argued that MSPA’s claim was barred under the claims-filing statute since Florida Healthcare did not request reimbursement within three years of when the services were rendered. The district court agreed with the insurer and ruled in its favor.[3]  MSPA then appealed to the 11th Circuit Court of Appeals.

Issue presented: the MSP’s three-year “claims-filing” provision

In dissecting this decision, it is important to first understand what was (and what was not) before the court. The issue presented, as framed by the court, was whether compliance with the MSP’s “claims-filing” provision is a prerequisite to filing suit under the MSP’s private cause of action provision.[4]

The MSP’s claims-filing provision is codified at 42 U.S.C. § 1395y(b)(2)(B)(vi) and states:

Notwithstanding any other time limits that may exist for filing a claim under an employer group health plan, the United States may seek to recover conditional payments in accordance with this subparagraph where the request for payment is submitted to the entity required or responsible under this subsection to pay with respect to the item or service (or any portion thereof) under a primary plan within the 3-year period beginning on the date on which the item or service was furnished. (Emphasis Added).

Thus, the court had to decide whether Florida Healthcare’s failure to request reimbursement within three years from when services were rendered barred MSPA’s PCA claim against the insurer – and, as we will learn below, the court ruled that it did not.  

Issue not presented: the MSP’s statute of limitations provision

Importantly, the court made it a point to note what this case was not about – that being whether MSPA’s claim was barred by the three-year statute of limitations (SOL) provision contained in 42 U.S.C. § 1395y(b)(2)(B)(iii) (commonly referred to as the SMART Act’s SOL).

The SMART Act’s SOL provision states, in pertinent part, that:

[a]n action may not be brought by the United States under this clause with respect to payment owed unless the complaint is filed not later than 3 years after the date of the receipt of notice of a settlement, judgment, award, or other payment made pursuant to paragraph (8) relating to such payment owed.

On this point, the insurer specifically acknowledged that it was not raising a SOL defense under this section.[5] Further, the insurer took the position that the claims-filing provision “is not a statute of limitations” but merely part of the MSP’s “ordinary billing” scheme, a scheme which it argued MSPA was required to but failed to comply.[6]

Court’s ruling: the MSP’s three-year “claims-filing” statute is not a prerequisite to filing a private cause of action claim

For the reasons more fully outlined in this section, the court concluded that “[o]ur analysis reveals nothing in the relevant statutory language and structure, or in our precedent interpreting [the MSP’s claims-filing and PCA provisions] suggests that [MAPs] must comply with the claims-filing provision … as a “prerequisite” to seeking reimbursement of conditional payments.[7]

After finding that MSPA had the standing to bring its PCA claim,[8] the court embarked on a detailed breakdown of the claims-filing statute in support of its decision, in part, as follows:  

  1. Failure to comply with claims-filing provision did not bar MSPA’s recovery claim

To start, the court called into question whether the MSP’s claims-filing provision even applied to MAP’s – noting that the statutory text references “the United States” (the United States may seek to recover conditional payments …).[9] While recognizing that courts have afforded “some degree of functional parity” between MAPs and traditional Medicare, the court noted there  remained important differences between the two programs in terms of rights in certain instances commenting that “not every provision in the [MSP] … applies to MAPs.”[10] Notwithstanding, the court ultimately concluded that this uncertainty did not need to be resolved in this particular context since it found that, for the reasons outlined below, the claims-filing provision did not operate as a prerequisite to MSPA’s claim – or “for anyone” else for that matter.[11]

  1. Limiting the impact of the words “notwithstanding” and “may”

Next, the court dissected the beginning phrase of the claims-filing statute which reads: Notwithstanding any other time limits that may exist for filing a claim under an employer group health plan the United States may seek to recover conditional payments … .[12] The court first examined the definition of the word “notwithstanding” as used generally, and in context of the statutory language, and ultimately agreed with MSPA that use of this word “shows that the claims-filing provision simply allows Medicare … to circumvent time limits that an employer’s group health plan might otherwise place on claims.”[13]

From there, the court focused on the word “may” and concluded that the permissive nature of this word meant that the claims-filing statute allowed, but did not require, the government (or the MAP in this instance) to present claims for payment, and that failure to do so did not serve as potential bar to a recovery claim.

By using the word “may” the court explained that:

Congress didn’t mean to condition anything on compliance with the claims filing provision – and certainly not the right to file suit to recover conditional payments … [T]he claims-filing provision is a “get to,” not a “have to.” Even if an employer’s group health plan purports to impose more stringent conditions, the United States (or again, an MAO) may — i.e. get to, is allowed to, is permitted to, etc., but doesn’t have to —file a claim within three years of when the services were provided.[14]

  1. Viewing the claims-filing statute as a mandatory prerequisite to filing a recovery claim would create “tension” with other MSP provisions

From the court’s view, if the claims-filing statute was a mandatory prerequisite to filing a PCA claim it would create “intra-Act tension”[15] with the MSP’s requirement that a primary payer only becomes obligated to reimburse Medicare when it “demonstrates” responsibility through, for example, a settlement agreement or judgment.[16]   

On this point, the court noted that an insurer may not know who is, or may be, a responsible primary payer during the course of the claim thereby forcing it “to file as many reimbursement requests as necessary with entities that might possibly be responsible, simply in order to avoid being barred to sue later … [t]he claims filing provision doesn’t support – let alone encourage – such a shotgun approach.”[17] In fact, the court viewed the statutory text as suggesting “quite the opposite”[18] noting that the “claims-filing provision states that the United States may” request reimbursement from “the entity required or responsible under this subsection to pay with respect to the item or service (or any portion thereof) under a primary plan.”[19] (emphasis added by the court). 

Thus, the court rejected the idea that the claims-fling statute required a reimbursement request be made before the primary payer demonstrating responsibility under the MSP, stating:

The [claims-filing provision] itself presumes that the government (or again, an MAO) would make a request only if the entity was “required or responsible under this subsection” — meaning the whole of § 1395y(b), including that section’s demonstrated-responsibility requirement — to pay. Were we to interpret the claims-filing provision to require a reimbursement request to be made before responsibility is demonstrated in order to preserve a right to sue later, we would have to ignore its text. We decline to do so.

Further, the court highlighted the problem that would be created if the claims-filing provision was considered a mandatory prerequisite to the three-year SOL set-forth in 42 U.S.C. § 1395y(b)(2)(B)(iii) (SMART Act’s SOL provision). In this regard, the court noted an insurer may not know that a primary payer even exists (or the responsibility has not been demonstrated in some way) within three years of the date that the beneficiary receives treatment (the measuring point used in the claims-filing statute).

Recognizing this “entirely realistic”[20] possibility, the court believed this could improperly result in the claims-filing provision becoming a limitations period to bar a recovery action stating:

Even if a lawsuit would otherwise be timely under the statute of limitations’ notice-triggered period — as measured from the date that the MAO learned of the primary plan’s obligation to pay — it would, on Kingsway’s reading, be barred for failure to comply with the claims-filing provision. The claims-filing provision would thus be transformed into a limitations period of sorts — despite its “notwithstanding” clause and permissive “may” language, [and the MSP’s under § 1395y(b)(2)(B)(iii)] notice-based statute of limitations would be rendered meaningless … (citation omitted).[21]

Based on this analysis, the court ultimately vacated the district court’s ruling finding, instead, that the MSP’s claims-filing statute did not operate to bar MSPA’s claim against the insurer in this action. 

Practical Considerations

When the dust settles, the court in MSPA was called upon to address the scope of the MSP’s three-year claims-filing statute in terms of its application and potential to limit MSP recovery claims. From the 11th Circuit’s view, the main purpose of this provision was to expand the government’s timeframe to pursue recovery claims against potentially shorter and more restrictive time periods imposed by group health plans. 

Also, the court refused to find the claims-filing statute to require Medicare (or a MAP in this instance) to first seek reimbursement of its bills within the claims-filing’s three-years provision before, or as a pre-condition, to bringing a recovery claim under the MSP. As the court explained, this statute allows but does not require, bills to be presented for reimbursement within three-years of the services being rendered. Further, and importantly, the court declined to view non-compliance with the claims filing statute as creating some sort of limitations period for Medicare (or a MAP) to file a formal recovery action. In this regard, the 11th Circuit’s ruling is similar to other recent decisions on these points.[22]

Thus, based on the 11th Circuit’s ruling, just because Medicare (or a MAP) fails to comply with the claims-filing’s three-years provision does not necessarily bar a recovery claim under the MSP – with the timeliness of that action to be governed, instead, by the SMART Act’s three-years provision related to the timeframe for filing a legal complaint to enforce secondary payer recovery rights under the MSP.


[1] The United States Circuit Court of Appeals (Eleventh Circuit) has appellate jurisdiction over Alabama, Florida, and Georgia.

[2] The MSP’s private cause of action statute as 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) [of 42 U.S.C. § 1395y(b)].    

[3] MSPA Claims 1, LLC v. Kingsway Amigo Insurance, 361 F.Supp.3d 1270 (S.D. Fla. November 20, 2018).

[4] MSPA Claims 1, LLC, 2020 WL 728625, at *4.

[5] MSPA Claims 1, LLC, 2020 WL 728625, at *4, citing the insurer’s Oral Argument at 15:05.  On this point, the court noted that the parties “seemed” to agree MSPA’s PCA action would be governed by the MSP’s three-year notice-based SOL pertaining to government (i.e. Traditional Medicare) recovery claims as codified at 42 U.S.C. 1395y(b)(2)(B)(iii). This section, commonly referred to as the SMART Act’s SOL provision states, in pertinent part, that [a]n action may not be brought by the United States under this clause with respect to payment owed unless the complaint is filed not later than 3 years after the date of the receipt of notice of a settlement, judgment, award, or other payment made pursuant to paragraph (8) relating to such payment owed. The court noted that MSPA filed suit within three years from receiving a copy of the underlying settlement agreement. Id.

[6]  MSPA Claims 1, LLC, 2020 WL 728625, at *4.

[7] Id. at *3

[8]  On this point, the court acknowledged the prior 11th Circuit ruling in In re Avandia, 685 F.3d 353 (3rd Cir. 2012 holding that MAPs can sue under the MSP’s PCA provision so long as (1) the primary payer has “demonstrated responsibility” and (2) the MAP is suing a primary payer. Based on the facts, the court found that MSPA had standing to sue as a valid assignee of a MAP and that the insurer demonstrated responsibility by settling the underlying personal injury suit. 

[9] 42 U.S.C. § 1395y(b)(2)(B)(vi)

[10] MSPA Claims 1, LLC, 2020 WL 728625, at *5

[11] Id. at *6.

[12] 42 U.S.C. § 1395y(b)(2)(B)(vi)

[13] MSPA Claims 1, LLC, 2020 WL 728625, at *5

[14] Id.

[15] Id. at *7.

[16]  Under the MSP, “[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)(iii). The phrase “by other means” is defined in 42 C.F.R. § 411.22 “as including but not limited to a settlement, award, or contractual obligation.”

[17] MSPA Claims 1, LLC, 2020 WL 728625, at *7

[18] Id. at *8

[19] Id. at *8 citing 42 U.S.C. § 1395y (b)(2)(B)(vi).

[20] MSPA Claims 1, LLC, 2020 WL 728625, at *8.

[21] Id.

[22] See e.g., MSP Recovery Claims, Series, LLC v. Phoenix Insurance Company, 2019 WL 677081 (N.D. Ohio Dec. 12, 2019) (holding, in part, that purpose of the claims filing provision is to expand the government’s timeframe to pursue claims where the primary payer is a group health plan with more restrictive claims filing requirements and this provision does not create a statutory presentment requirement as a pre-condition to filing suit pursuant to the MSP; MSPA v. Bayfront HMA Medical Center, 2018 WL 1400465, (S.D. Fla. March 2018) (finding, in part, that the claims filing does not contemplate litigation but, instead, it merely sets forth a timeframe in which the Government must request reimbursement.; and Recovery Claims Series LLC v. Progressive Corporation, 2019 WL 5448356 (N.D. Ohio Sept, 17, 2019) (finding, in part, that the claims filing provision is not a condition precedent to the bringing of a recovery claim and does not place any limit on the United States from bringing an action if it does not file a claim).


Mark Popolizio, J.D., is vice president of MSP compliance and policy at ISO Claims Partners, a Verisk business. You can contact Mark at mpopolizio@verisk.com.