(c) 2018 Jon L Gelman, All Rights Reserved.

Wednesday, June 20, 2018

Penalty Denied in MSP Private Cause of Action Claim for Delay in Reimbursement

While the personal representative of an estate had standing to bring a lawsuit against a medical provider for recoupment of money under the Medicare Secondary Payer Act [MSP], it was unable to seek double damages for delay in reimbursement of the money paid.

The Fourth Circuit Court of Appeals would not authorize a double damages penalty permitted by statute against a recalcitrant payer, as the Court did not find sufficient delay in the reimbursement. 42 U.S.C. § 1395y.

Judge Wilkinson, writing for the majority stated:

“Kathy Netro brought a medical malpractice suit in state court against the Greater Baltimore Medical Center for its negligent care of her now-deceased mother. When she won, GBMC became liable under federal law for payments Medicare had made for Netro’s mother’s treatment. GBMC did not immediately satisfy the judgment. And three weeks after the state court entered its final order, Netro brought this suit to recover solely the funds owed to Medicare and to collect for herself under the Medicare Secondary Payer Act, 42 U.S.C. § 1395y, which authorizes a private cause of action for double damages where a recalcitrant payer “fails” to reimburse Medicare. But before the litigation went very far, GBMC paid Netro the state court judgment, which included the full amount owed to Medicare. This series of events brings us to the straightforward question in this case: Did GBMC “fail” to pay the funds owed to Medicare? The district court said no, and we agree.”


“Finally, Netro asks us to adopt a 60-day rule that would leave any primary plan vulnerable to suit exactly 60 days after becoming responsible for reimbursing Medicare. We decline to do so. The statutory text does not support any specific deadline, nor does Netro's attenuated rationale—relying on a different statutory provision that authorizes Medicare to charge interest on conditional payments after 60 days. See 42 U.S.C. § 1395y(b)(2)(B)(ii). And in any event, counting from the proper date of final judgment, GBMC's payment was well within Netro's proposed deadline.”

Netro v Greater Baltimore Medical Center, Inc., 891 F. 3d 522 (4th Cir. 2018)

Jon L. Gelman of Wayne NJ is the author of NJ Workers’ Compensation Law (West-Thomson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thomson-Reuters).
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