Case Law Update – September 2016


Humana Medical Plan. Inc. v. Western Heritage Insurance Company, No. 15-11436 U.S. App 11th Circuit (August 8, 2016)

In a very significant case from the United States Court of Appeals for the 11th Circuit for the Southern District of Florida, the court upheld the trial court’s decision to award double damages to Humana for “conditional payments” that it made for medical bills which were related to a lawsuit for negligence against the Hamptons West Condominium Association. Hamptons West was insured by Western Heritage Insurance Company. Humana had paid medical bills totaling $19,155.41 under Medicare Part C coverage which is also known as a Medicare Advantage Plan. Humana was operating as an MAO (Medicare Advantage Organization) when it made the payment of the medical bills. Although this case did not involve an on-the-job injury, it is abundantly clear that a similar ruling would apply in a workers’ compensation case.

After Humana paid medical bills on behalf of the plaintiff, Mary Reale, a Humana Medicare Advantage Plan enrollee, Ms. Reale sued Hamptons West Condominiums for negligence for causing her personal injuries and received a settlement in the amount of $115,000.00 from Hamptons West’s liability insurance company, Western Heritage Insurance Company.

Humana made demands upon Western Heritage Insurance Company for reimbursement of the “conditional payments” it made under the Medicare Advantage Plan and Western Heritage refused to reimburse it. Humana ultimately sued Western Heritage Insurance Company for reimbursement.

The US District Court held that Humana operating as a Medicare Advantage Organization made payments as a secondary payor under the Medicare secondary payor act (MSP) and as a result, Humana was essentially in the same position as Medicare itself. Because Western Heritage Insurance Company refused Humana’s demands and requests to reimburse it for the medical expenses it paid that were related to the accident/ injury which occurred to Ms. Reale at the Hamptons West Condominium Association, it was entitled to double the amount of its medical bills (double damages) under the private cause of action created by the Medicare secondary payor act (MSP). As a result, Western Heritage Insurance Company was required to pay double damages to Humana in the total amount of $38,310.82 ($19,155.41 x 2).

Practical Application:

The Humana v. Western Heritage decision reveals how extremely important it is to determine whether any private health insurer has paid benefits under Medicare Advantage Plan (Medicare Part C) in cases where the claimant is a Medicare beneficiary and the case is being settled. Before consummating a settlement of any case where the claimant is a Medicare beneficiary, the adjuster and/or its defense attorney should obtain a copy of the claimant’s Medicare card which should indicate if he or she is receiving benefits through a Part C plan. In addition, the adjuster or defense attorney should also find out the names of any insurance companies that provided Medicare Part C coverage and may have made payment of medical bills which would be considered conditional payments.

It should be noted that due to “yearly open enrollment” any particular claimant could have more than one insurance company involved with a Medicare Advantage Plan. As a result, it is important to determine all insurance companies that may have provided Medicare Advantage Plan (Part C) coverage to a claimant during the time when the claimant first became eligible for Medicare and when the case settled. If diligent investigation and research is not done, the workers’ compensation carrier could end up being subject to double the amount of any medical bills paid by the private health insurer under a Medicare Advantage Plan (Medicare Part C). Essentially, the case places a private insurer providing Medicare Part C coverage in the same position as Medicare.

It should also be noted that in order to verify with Medicare whether or not any conditional payments have been made under a Medicare Advantage Plan, Medicare must be provided with the name of the private insurance company providing the benefits in order for CMS to advise if there are any conditional payments for which reimbursement may be required.


Please feel free to contact any of our workers’ compensation attorneys listed below if you wish to discuss this case and its application to your claims. You may reach us at the telephone numbers or e- mail addresses listed below:

Fort Lauderdale/East Coast Office: (954) 462-4304

Walter C. Wyatt, Partner – ext. 218

Robert M. Potter, III, Partner – ext. 222

St. Petersburg/West Coast Office: (727) 322-1739

Joseph A. Bayliss, Partner – ext. 201

Jerome B. Blevins, Partner – ext. 205