Do Medicare Advantage Plans(MAP’s) Have the Same Rights of Recovery as Traditional Medicare?

Do Medicare Advantage Plans(MAP’s) Have the Same Rights of Recovery as Traditional Medicare?

Medicare Advantage Plans, also referred to as Part C or MAP’s, are offered by private insurance companies and cover all Medicare services. They may also offer extra coverages. Medicare(CMS) pays a fixed amount for your care each month to the private insurance company offering the MAP, and that company establishes its’ own rules in terms of how you receive services(referrals for specialists, co-pays, etc.).

Do these Medicare Advantage Plans(MAP’s) have the same right of recovery for double damages as traditional Medicare(CMS)? This is very much an evolving issue in the Courts and certainly the subject of much debate/discussion.  Courts across the country have ruled both ways on this issue.

There is a Third U.S. Circuit Court of Appeals case called In re Avandia Mktg.  Essentially Humana, a MAP, demanded reimbursement from GlaxoSmithKline for payments Humana had made.  The Court held that the text of Section 1395y(b)(3)(A) of the MSP “unambiguously provide[s] Humana with a private cause of action.” Consequently, Humana’s payments were subject to reimbursement. Conversely, there is a Ninth U.S. Circuit Court of Appeals case(Parra v. Pacificare of Arizona Inc.) that ruled the other way.  Because of the differing Appeals Court rulings, Glaxo petitioned the U.S. Supreme Court for review of the Avandia decision.  In April 2013 the Supreme Court denied the petition for review, which basically solidified the prevailing authority of Avandia in the Third Circuit Court(which is New Jersey, Delaware, Pennsylvania, and the U.S. Virgin Islands) – meaning, in those jurisdictions there is case law to support the argument that MAP’s have the same right of recovery under the MSP as does traditional Medicare.

A more recent case in Florida is Humana v. Western Heritage(March, 2015).  In that case Humana sued Western Heritage for recovery of double damages. Humana argued that as a MAP they have the same right of recovery as does traditional Medicare, including recovery of double damages. The District Court ruled in Humana’s favor.


Both the InRe Avandia and Western Heritage cases create uncertainty for employers and carriers when settling cases with Medicare beneficiaries who have ever received benefits from a Part C plan at any point in time. While the Humana v. Western Heritage case is being appealed, if the decision in that case stands it certainly signals there is no assurance of settlement finality – even in situations where the claimant states they have never been covered by a MAP.


There is also December 5, 2011 CMS Memo that speaks to MAP’s recovery rights:


“The purpose of this memorandum is to summarize and convey our support for our regulations giving Medicare Advantage organizations (MAOs) and Prescription Drug Plan (PDP) sponsors the right, under existing Federal law, to collect for services for which Medicare is not the primary payerCMS regulations at 42 CFR § 422.108 describes MSP procedures for MAOs to follow when billing for covered Medicare services for which Medicare is not the primary payer. These regulations also assign the right (and responsibility) to collect for these services to MAOs. Specifically, *§422.108(f) stipulates that MAOs will exercise the same rights of recovery that the Secretary exercises under the Original Medicare MSP regulations in subparts B through D of part 411 of 42 CFR and that the rules established in this section supersede any State laws.”


While numerous cases continue to play out across the country, it is prudent to be proactive in identifying and resolving any potential MAP liens/demands:

  • Inquire if the claimant has ever been covered by or received benefits under a MAP
  • If presented with a MAP demand/lien – acknowledge it
  • Consult and work with all stakeholders with regards to your rights/responsibilities
  • Dispute any unrelated charges
  • Resolve the lien as another component of the overall settlement

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