Maximizing damages in personal injury cases can be more than negotiating and litigating with the at-fault party. If there are unpaid or underpaid medical bills, hospitals and other medical service providers can seek reimbursement from the injured person. Insurers may also seek reimbursement from the policy-holder or from another insurer, depending on how much was paid, if there were multiple insurers obligated to pay, and what was agreed upon in each policy. In Humana Medical Plan Inc. vs. Western Heritage Ins. Co. (No. 15-11436), the Eleventh Circuit Court of Appeals assessed whether or not a corporate insurer, acting as an Medicare Advantage Organization (MAO) under Medicare Part C, can sue the insurer (the primary payer) for a hotel chain that settled a personal injury case with a woman injured on hotel property. The MAO initially sought reimbursement from the injured woman and her husband, but then it chose to pursue the insurer, creating new federal case precedence for Florida.
Following the premises liability accident, the injured woman sought medical treatment, which was billed to and paid by the MAO at $19,155.14. After the woman sued the hotel property, the MAO sent her a bill in the same amount, which is allowed under Part E of the Medicare Act (known as the MSP), under which Medicare payments are secondary and reimbursable if any other insurer is liable. This includes a personal injury defendant’s insurer. The amount was not appealed by any party to the action. As part of the settlement, the insurer and hotel chain tried to include the MAO on the settlement draft. The injured woman and her husband refused and sought sanctions for non-compliance with the settlement agreement. The amount was held in trust, and the hotel chain paid $115,000 to the couple. The insurer then went after reimbursement from the hotel’s insurer under the MSP private cause of action, 42 U.S.C. § 1395y(b)(3)(A), which allows double damages. The Florida federal district court granted summary judgment to the MAO, ordering the double damages under the MSP, and the hotel’s insurer appealed.