When Medicare beneficiaries are taken to the ER after an auto accident, they’re likely to have their Medicare cards with them, but not their auto policies.  This creates a problem for Medicare because Medicare is supposed to be a secondary payer, liable for medical bills only if no primary payer is responsible for them.  But if hospitals and doctors don’t know about a patient’s auto insurer, they simply bill Medicare.  And if Medicare doesn’t know about the auto insurer, it can’t demand reimbursement.

Congress has acted more than once to address this problem.  One provision of the Medicare Act provides a private cause of action for double damages when a primary insurer fails to make the appropriate payment or reimbursement.  Another provision imposes an affirmative duty on the primary insurer to notify Medicare when that insurer knows it’s responsible for payments.  Failure can result in a civil money payment of $1,000 for each day of noncompliance.

On March 29 three Medicare Advantage plans filed a putative class action against Erie Indemnity and subsidiaries, alleging violation of these requirements and seeking double damages under the Medicare Act, damages for breach of contract, and an injunction against further violations.

This action in the Western District of Pennsylvania follows on the heels of similar suits by the plaintiffs against Progressive and Nationwide Mutual.

The case is MAO-MSO Recovery II v. Erie Indemnity, Case No. 1:17-cv-75 (W.D. Pa., filed Mar. 29, 2017).