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Saturday, April 17, 2010

Case Advances Challenging MSP Reimbursement Procedures

A Federal Court Judge has permitted discovery to go forward in a potential class action challenging the reimbursement procedures of the U.S. Department of Health and Human Services (HHS) being utilized under the authority of the Medicare Secondary Payer Act (MSP).

The case pending in Arizona questions the authority of the HHS to seek reimbursement in liability claims of conditional payments paid by the Federal government. The plaintiffs are seeking declaratory and injective relief from the HHS procedures. They allege that the HHS has exceeded its authority under the MSP and that the plaintiffs have been denied due process.

The claim challenges the requirement that reimbursement be made within 60, in advance of an appeal or waiver. The case also alleges that the reimbursement claims asserted by HHS are in excess of the actual amount conditionally expended and object to the interest charges on the erroneous amounts asserted.

A motion for class action certification was filed on March4, 2010. Determination of that issue has been held in abeyance as discovery proceeds.

The issues  the Court will determine in this case have been identified as follows:
1.Whether the HHS can require prepayment of an MSP recovery claim before the correct amount is determined through administrative appeal procedures; and
2. Whether the HHS can make plaintiff’s attorneys financially responsible if they do not hold or immediately tender the litigation proceeds.

The Court, in permitting discovery to go forward against the HHS, determined the need to ascertain, not only as to the specific plaintiffs, limited in the Administrative Record, but generally:

·    -----The frequency the appeal process is actually utilized and whether it is burdensome to beneficiaries; and
·    -----The error rate and whether that error rate is extraordinary high in MSP recovery claims; and
·    -----Whether there is a need for current lack of procedural protections for beneficiaries and their attorneys.

Hard v. Sebelius, No. cv 09-134 TUC DCB, 2010 WL 1452932 (D. Ariz), Decided April 12, 1020.

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