Tenet defeats class-action lawsuit alleging overpayments: 8 things to know

A Florida federal judge dismissed a putative class-action lawsuit against Dallas-based Tenet Healthcare's Florida Region and one of its hospitals filed by a Medicare Advantage assignee trying to recoup insurance payments under the Medicare Secondary Payer Act, according to the Daily Business Review.

Here are eight things to know about the lawsuit.

1. The plaintiff, MSPA Claims 1, which is linked to MSP Recovery Law Firm, claimed Tenet and many other health systems across the nation collected billions of dollars from Medicare and Medicaid that should have been paid to other insurers.

2. Under the Medicare Secondary Payer Act, government payers are secondary rather than primary payers. This means any other insurer should pay on a claim before Medicaid or Medicare covers the balance, according to the report.

3. To ensure beneficiaries get treatment and healthcare providers receive payment, Medicare can make what is known as conditional payments if an insurer is unable to make prompt payment. The Medicare Secondary Payer Act allows for a private cause of action for damages when a primary payer fails to fulfill its reimbursement obligations under the Act.

4. In July 2013, Florida Healthcare Plus, a Medicare Advantage organization, entered into a hospital services agreement with Tenet Florida on behalf of St. Mary's Medical Center in West Palm Beach, Fla. That agreement governed the relationship between FHCP and the hospital and explained the payment mechanism for services provided to FHCP enrollees.

5. In September 2013, an FHCP enrollee was involved in a car accident and received medical treatment at St. Mary's. At the time of the accident, the enrollee was also covered by a private insurer, Allstate Fire and Casualty Insurance. After services were rendered, St. Mary's billed both FHCP and Allstate in the amount of $2,086. FHCP paid $285.75 and Allstate paid $1,251.60. Under federal law, St. Mary's was required to reimburse FHCP $285.75, the full amount of the conditional payment, within 60 days of receipt, which was Jan. 17, 2014.

6. MSPA Claims 1 claimed St. Mary's missed the 60-day deadline to return the payment to FHCP. MSPA Claims 1 argued it had standing to bring the lawsuit against Tenet because FHCP assigned its recovery rights to MSPA Claims 1.

7. Lawyers representing Tenet argued MSPA Claims 1 lacked legal standing to sue Tenet Florida and St. Mary's. "The statute that the plaintiffs were suing under … the Medicare Secondary Payer Act … only allows Medicare Advantage organizations to sue insurance companies known as primary payers," Alan D. Lash, one of the lawyers representing Tenet Florida, told the Daily Business Review. "Since the hospital was a provider and not a primary payer, we did not believe that the statute … gave them standing."

8. Judge Kathleen M. Williams agreed with that argument and dismissed the case March 29.

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