Statute Of Limitations For Medicare Part C Claim For Reimbursement In Medical Malpractice And Other Personal Injury Cases

Medicare Reimbursement In Malpractice And Personal Injury Cases: Congress created Medicare to provide insurance to those over the age of 65. Oftentimes, though, it turns out that more than one insurer may be liable for a Medicare beneficiary’s medical expenses. For example, a car-accident victim might be entitled to recover medical expenses both from her own Medicare provider and from the other driver’s auto-insurance company. Originally, in such instances, Medicare was the “primary” payer—meaning that it paid first—and private insurers were “secondary” payers—meaning that they covered only those expenses that remained after Medicare had paid.

That changed in 1980. In an effort to cut Medicare costs, Congress “inverted that system” by passing the Medicare Secondary Payer Act. Now, private insurers serve as the primary payers. That leaves Medicare—or in some instances, a “Medicare Advantage Organization”—as the secondary payer, or the payer of last resort, available only if no private insurer is liable.

The Medicare Secondary Payer Act also accounts for what happens when the primary payer “has not made or cannot reasonably be expected to” pay for treatment “promptly.” 42 U.S.C. § 1395y(b)(2)(B)(i). In those instances, the secondary payer “may make” the payment, “conditioned on reimbursement.” The primary payer “shall reimburse” the secondary payer if it “has or had a responsibility to make payment with respect to such item or service.” § 1395y(b)(2)(B)(ii). If the primary payer fails to do so, the secondary payer can sue for double damages. §§ 1395y(b)(2)(B)(iii), 1395y(b)(3)(A).

Separately, Congress passed Medicare Part C—the Medicare Advantage program—in 1997. See Pub. L. No. 105-33, 111 Stat. 251, 276 (1997) (codified as amended at 42 U.S.C. § 1395w-21). That legislation, among other things, created Medicare Advantage Organizations—private insurance companies providing Medicare benefits in exchange for fixed fees from the Centers for Medicare and Medicaid Services—and enabled those “MAOs” to act as secondary payers under the Medicare Secondary Payer Act. Accordingly, an MAO, like Medicare, may sue a primary plan that fails to reimburse its secondary payment.

But while they possess the same statutory right to seek reimbursement, the Medicare Secondary Payer Act provides distinct causes of action for private and government actors. Thus, unlike Medicare, when an MAO sues, it “must rely” on the Medicare Secondary Payer Act’s so-called “private cause of action,” which Congress added to the legislation in 1986, and which is found at 42 U.S.C. § 1395y(b)(3)(A). It “cannot use the separate government cause of action,” found at 42 U.S.C. § 1395y(b)(2)(B)(iii). And, unlike the government cause of action—which contains a three-year statute of limitations—the private cause of action does not specify a limitations period. Compare 42 U.S.C. § 1395y(b)(2)(B)(ii), with § 1395y(b)(3)(A).

In a case decided by the United States Court of Appeals for the Eleventh Circuit (“Federal Appellate Court”) on August 10, 2022, the assignee of a now-defunct Medicare Advantage Organization sued under the private cause of action but it was not clear what the applicable limitations period is or, consequently, whether its claim was timely filed. The Federal Appellate Court looked to 28 U.S.C. § 1658(a), which sets forth a catch-all limitations period: “[e]xcept as otherwise provided by law, a civil action arising under an act of Congress enacted after” December 1, 1990 “may not be commenced later than 4 years after the cause of action accrues.” In the case it was deciding, the Federal Appellate Court stated, “without Medicare Part C, an MAO like Florida Healthcare would not (1) exist, (2) have a statutory right to charge a primary payer, or (3) suffer any cognizable injury if the primary payer didn’t reimburse it. See id. Given that binding caselaw, it seems clear to us that Florida Healthcare’s—and, in turn, its assignee MSPA Claims 1’s—cause of action was “made possible by” Part C—“a post-1990 enactment.” Jones, 541 U.S. at 382. Accordingly, we hold that § 1658(a) provides the applicable statute of limitations—and, therefore, that we need not (and may not) engage in a borrowing analysis.”

“Because it is at least “plausible” that the term “accrues” in § 1658(a) incorporates an occurrence rule—in fact, and setting presumptions aside, we think that’s the best interpretation—that is how we interpret it. Therefore, MSPA Claims 1’s cause of action accrued in 2012 when MSPA Claims 1’s assignor, Florida Healthcare, paid D.L.’s medical bills and became entitled to reimbursement through the Medicare Secondary Payer Act. Because that was more than four years before MSPA Claims 1 filed suit in 2018, its suit is not timely under 28 U.S.C. § 1658(a).”

Source MSPA Claims 1 LLC v. Tower Hill Claims Service, LLC, No. 21-11135.

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