Parties closing worker’s compensation cases
often worry about liability to Medicare but a recent Michigan case points out
that the private enforcement option presents another threat to be guarded
against.
The Medicare Secondary Payer Act (MSP) provides
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 the workers’ compensation context this can
come up when the employer denies bills which are then paid by Medicare but for
which the employer is ultimately held responsible.
In the recent case of John F. Hull vs. Home Depot USA, Inc pending in the Circuit Court
for the County of Oakland, Michigan the plaintiff was allowed to proceed with
his action for double damages against his employer.Hull filed a workers’ compensation claim that
was denied. Four years later a decision
was issued awarding benefits including medical bills for which Medicare had
paid $6,813.83 and Blue Cross/Blue Shield paid $35,419.33.Home Depot filed an appeal that was withdrawn
on August 28, 2015. On September 10,
2015 Home Depot reimbursed Medicare the amount it had paid.
While the workers’ compensation claim was on
appeal, Hull filed suit under the MSP for double damages to recover Medicare’s
interest. After reimbursing Medicare,
Home Depot filed a motion for summary disposition on the grounds of
payment. In denying the motion the court
pointed out that Home Depot refused to pay for Hull’s medical expenses for
nearly five years, forcing Medicare to pay them. Only after suit was filed under the MSP did
Home Depot finally pay the amounts owed and argue “no harm; no foul.”The court found that “This course of conduct
is not permitted in light of the clear intent and purpose of the MSP.”
Judgment was to be entered with the following
explanation: “Because Plaintiff’s filing of the suit prompted Home Depot’s
payment of $42,233.16, Plaintiff is entitled to the double damage in that
amount ($42,233.16) to reward him for his efforts.”
The lesson from this case is that it is not
just the government who can sue to enforce a Medicare Lien for Conditional
Payments. The injured workers can bring
the suit and, if successful, will be entitled to double damages. If the principles of this case are followed
by other courts, reimbursement of the conditional payments after the filing of
a private action under the MSP will not prevent judgment for the double
damages.
The potential for liability for double the
amount of conditional payments should be taken into consideration when deciding
whether to accept or deny medical expenses.
If a private action is filed before settlement of the workers’
compensation claim a release of the private action suit should be included in
any settlement negotiations.