Legal Alert: Healthcare Providers Need to Pursue Medicare's "Primary Payers," NJ Court Rules

Posted: 10/27/2017 | Business, Health Care

Health care providers know they need to be in full compliance when they submit bills to Medicare and Medicaid. But it is often easy to overlook the Medicare Secondary Payer (MSP) requirement that a provider needs to identify whether a “primary payer” is available before billing Medicare or Medicaid. Especially when Medicare and Medicaid rules define a “primary payer” as not just a health insurer, but also any third party (or their liability carrier) who may be responsible for the injuries of the patient. So providers need to implement steps to make sure their collection departments are not opening them up to a False Claim Act (FCA) case by “ignoring” the existence of, or “failing to ascertain,” the possibility that the patient has a potential recovery from either private health insurance or a personal injury claim the patient is asserting against a third party.

A recent court case, United States ex rel. Jersey Strong Pediatrics, LLC v. Wanaque Convalescent Ctr., held an FCA claim could be asserted where the provider was lax about the duty to ascertain whether a primary payer existed. The U.S. District Court for the District of New Jersey refused September 18 to dismiss a qui tam action against a skilled nursing and rehabilitation facility alleging it fraudulently billed Medicare and Medicaid by failing to comply with said MSP requirement. Jersey Strong Pediatric, LLC brought the False Claims Act (FCA) qui tam action alleging that it made Wanaque Convalescent Center (WCC) aware of patients’ private insurance, but WCC intentionally ignored the existence of such primary payers. WCC is being accused of submitting false claims to Medicare and Medicaid by either failing to ascertain, or ignoring the existence of, patients’ private health insurance in violation of MSP requirements.

The federal court found compliance with MSP laws is material to the government’s decision to pay Medicaid and Medicare claims. Further, the court noted the MSP laws require providers to gather information and determine whether Medicare/Medicaid is the primary payer; that claims are consistently/continually/automatically denied if other benefits are available; and that the federal government contracts with auditors to strictly enforce the secondary payment laws. The federal court determined the defendant could be liable under the implied false certification theory, whereby a provider is liable if it “seeks and makes a claim for payment from the Government without disclosing that it violated regulations that affected its eligibility for payment. (citing, United States ex rel. Wilkins v. United Health Grp., Inc., (3d Cir. 2011)).

More Information
The complete text of the cases can be found below:

United States ex rel. Jersey Strong Pediatrics, LLC v. Wanaque Convalescent Ctr.
United States ex rel. Wilkins v. United Health Grp., Inc.


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