United States of America ex rel. State of Michigan, et al. v. State Farm Mutual Automoible Insurance Company, et al.

Case Number:

Judge: Not Available

Court: United States District Court for the Eastern District of Michigan

Plaintiff's Attorney:

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Defendant's Attorney: Not Availaqble

Description: Detroit, Michigan civil litigation lawyers represented the Plaintiffs who sued on a qui tam theory.


In some circumstances, “an individual who has incurred medical expenses can lawfully
seek recovery from more than one insurer.” United States ex rel. Angelo v. Allstate Ins. Co., 106
F.4th 441, 445 (6th Cir. 2024). This is also true when one of those insurers is Medicare. Id. In
the past, Medicare paid first (as the “primary payer”), while the private insurer would take care of
the rest (as the “secondary payer”). Id. at 445–46. The Medicare Secondary Payer Act of 1980
flipped those roles, making the private insurer the primary payer, and Medicare or a
non‑governmental Medicare Advantage Organization (MAO) the secondary payer.1 Id. “An
MAO is a private, for-profit company that contracts with [the government] to provide medical
coverage, based on a capitated (or fixed) monthly payment per enrollee (rather than fees for
specific services).” Joint Appellees Br. at 6.
Even though Medicare is the secondary payer, Congress authorized Medicare to pay
“expenses up front” when the primary payer does not “promptly meet its obligations,” “so long as
the primary payer eventually reimburses Medicare for any amounts it overpaid.” Allstate, 106
F.4th at 446 (citation omitted). This might happen, for example, when the “primary payer is
contesting its liability to cover an incurred expense.” Id. “To ensure that Medicare does, in fact,
get reimbursed for payments it fronts for a primary payer, the Medicare Secondary Payer Act
authorizes the government to sue the primary payer when the primary payer fails to reimburse the
government.” Id.
Congress also has created reporting requirements to cut down on fraud and assist with the
coordination of benefits. Under § 111 of the Medicare, Medicaid, and SCHIP Extension Act of
2007, 42 U.S.C. § 1395y(b)(7)–(8), private insurers must file quarterly reports with the Centers
for Medicare & Medicaid Services (CMS). Allstate, 106 F.4th at 446. “The reports must identify
those beneficiaries seeking coverage for medical expenses from the private insurer who the insurer
has determined may also be covered under Medicare.” Id. Violating § 111 may result in a civil
monetary penalty. Id. Insurers may file the reports themselves, or they may contract with a
third-party, such as defendant Insurance Services Office, Inc. (ISO), to help with the reporting
requirements. Section 111 reports “must be made ‘regardless of whether or not there is a
determination or admission’” that the insurer is liable for the claim. Id. (quoting 42 U.S.C.
§ 1395y(b)(8)(C)).
Perhaps not surprisingly, “[t]his statutory scheme has spawned an industry of compliance,
data analytics, and litigation, of which the parties here are emblematic.” Id. Relator MSP WB,
LLC and its affiliated entities seek to identify § 111 violations and unreimbursed conditional
secondary payments made by the government or an MAO. Once uncovered, MSP WB sues the
primary payers. Relator Michael Angelo “owns and operates a lawyer referral service, as well as
health care facilities nationwide, including a medical transportation company, radiology clinics, a
pharmacy, and a surgery center.” Id. at 447.

Outcome: Affirmed

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