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Medicare Secondary Payer Issues Heat Up for Insurers

July 21, 2011

In recent rulings, courts increasingly are addressing claims concerning insurer rights and obligations under the Medicare secondary payer scheme. Even while insurers await guidance from the Center for Medicare Services about Section 111 reporting obligations, litigation is heating up over other issues insurers face as a result of the Medicare secondary payer system. In this issue of Coverage Insights, we highlight two recent opinions in this area. One ruling addresses a claim for insurer bad faith due to a claims payment delayed while the insurer sought information about the extent of Medicare's past payments for medical services related to the bodily injury claim. The other decision addresses the ability of a Medicare Advantage Plan to assert a cause of action against a liability insurer for reimbursement of conditional payments made by the Plan on behalf of Medicare beneficiaries enrolled in its managed-care alternative to the traditional, fee-for-service Medicare program. Although these two rulings decide very different legal issues, they both tackle unsettled questions faced by insurers under the Medicare secondary payer law. Together, they reflect heightened sensitivities to Medicare interests, provide a sample of the varied issues that are certain to be litigated, and reflect the wide scope of the unresolved questions posed for insurers. If one thing is certain, it is that liability insurers will face much more litigation over Medicare secondary payer issues in the coming years.