<< Return to Publications List

Beware of the Power of the "MAO" or Be Ready to Pay Three Times

September 23, 2016

Beware of the Power of the "MAO" or Be Ready to Pay Three Times


Recently, in Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 26 Fla. L. Weekly Fed. C591 (11th Cir. 2016), the United States Court of Appeal for the Eleventh Circuit held, in a case of first impression, that the Medicare Secondary Payer Act ("MSP") allows a Medicare Advantage Organization ("MAO") to assert a private cause of action against a tortfeasor's liability insurer for reimbursement for secondary payments. In this case, Humana, a Medicare insurance carrier, brought suit against Western Heritage, who provided liability insurance for a tortfeasor, seeking reimbursement for payments Humana made on behalf of the plaintiff/enrollee, Mary Reale, after she was injured. While Western Heritage was negotiating a settlement with Reale in her personal injury action, Humana, an MAO, advised that it was entitled to $19,155.41 as reimbursement for covered medical charges as a secondary payor under the MSP.

Although Western Heritage attempted to add Humana as a payee on the settlement draft, the state court judge in Reale's personal injury case ordered Western Heritage to tender full payment without the lien holder on the check and also ordered Reale's counsel to withhold sufficient funds in a trust account to resolve all of the medical liens. Western Heritage issued full payment of the settlement under the terms of the state court's order with the understanding that Reale and her attorney would reimburse Humana. Reale disputed the amount of the reimbursement claim and filed suit against Humana in state court, bypassing Humana's administrative appeal process. While this litigation was pending, Humana sued Western Heritage in federal court, seeking double the $19,155.41, under the private cause of action provided for by the MSP. After a federal district court entered summary judgment for Humana, Western Heritage appealed.

The Eleventh Circuit affirmed and held that the MSP allows an MAO to bring a private cause of action against a tortfeasor's liability insurer seeking reimbursement for secondary payments. The court reasoned that, under the MSP, an MAO has the same status as Medicare with the same rights to reimbursement. Consequently, the Eleventh Circuit concluded that an MAO can pursue its right of reimbursement as a private party pursuant to the private cause of action provided for in the MSP, 42 U.S.C. Sec. 1395. Further, despite Western Heritage's efforts to ensure reimbursement to Humana in the state court personal injury action, the Eleventh Circuit held that Western Heritage nevertheless failed to provide for primary payment or appropriate reimbursement when it paid the entire settlement amount to Reale. While acknowledging that the MSP private cause of action does not define appropriate reimbursement, the court nonetheless held that Humana, as the MAO, was entitled to payment within sixty days of its demand, despite the reimbursement already paid to Reale. As a result, sixty days after Western Heritage paid the settlement to Reale, because no one reimbursed Humana, Western Heritage was subject to direct liability to Humana for double damages pursuant to the MSP's private cause of action provisions.

In the aftermath of this decision, insurers and their counsel should be extra cautious in resolving cases involving MAO reimbursement claims, and should try to ensure that all parties are aware of the consequences of an MAO's interests in the proceeds of any settlement. Otherwise, as this case demonstrates, it could prove costly.

If you have any questions or need further information about the above, please contact our appellate and insurance coverage division at This group offers our clients over 175 years of combined appellate experience and the legal insight born of literally thousands of appeals and involvement in hundreds of insurance coverage disputes.



Miami Office

9100 South Dadeland Blvd., Suite 1800
Miami, FL 33156

T: 305.374.1212 F: 305.374.7846

view location | map location


Key West

Key West Office

402 Applerouth Lane, Suite 2C
Key West, FL 33040

T: 305.509.7300 F: 305.374.7846

view location | map location
Ft. Lauderdale

Ft. Lauderdale Office

110 East Broward Blvd., Suite 1400
Fort Lauderdale, FL 33301

T: 954.768.0011 F: 954.768.0514

view location | map location
West Palm Beach

West Palm Beach Office

1700 Palm Beach Lakes Blvd., Suite 800
West Palm Beach, FL 33401

T: 561.640.0303 F: 561.640.0524

view location | map location

Indian River | Martin | Okeechobee | Palm Beach | Saint Lucie


Tampa Office

400 North Ashley Drive, Suite 1200
Tampa, FL 33602

T: 813.204.9776 F: 813.204.9660

view location | map location
Hernando | Hillsborough | Manatee | Pasco | Pinellas | Polk | Sarasota

Orlando Office

201 South Orange Avenue, Suite 475
Orlando, FL 32801

T: 407.245.3630 F: 407.245.7685

view location | map location
Brevard | Highlands | Orange | Osceola | Seminole

Ocala Office

1396 NE 20th Avenue, #500
Ocala, FL 34470

T: 352.622.4222 F: 352.622.9122

view location | map location
Alachua | Citrus | Dixie | Gilchrist | Lake | Levy | Marion | Putnam | Sumter | Volusia

Jacksonville Office

1 Independent Drive, Suite 1601
Jacksonville, FL 32202

T: 904.396.0062 F: 904.396.0380

view location | map location
Baker | Bradford | Clay | Columbia | Duval | Flagler | Hamilton | Nassau | Saint Johns | Union

Pensacola Office

125 West Romana Street, Suite 550
Pensacola, FL 32502

T: 850.434.0003 F: 850.434.0223

view location | map location

Escambia | Holmes | Okaloosa | Santa Rosa | Walton


Tallahassee Office

1705 Metropolitan Boulevard, Suite 202
Tallahassee, FL 32308

T: 850.222.5188 F: 850.222.5108

view location | map location

Bay | Calhoun | Franklin | Gadsden | Gulf | Jackson | Jefferson | Leon | Liberty | Wakulla | Washington | Madison | Lafayette | Taylor 

Ft. Myers

Ft. Myers Office

13350 Metro Parkway, Suite 201
Fort Myers, FL 33966

T: 239.334.8403 F: 239.939.0700

view location | map location

Charlotte | Collier | DeSoto | Glades | Hardee | Hendry | Lee


Mobile Office

11 North Water Street, Suite 10290
Mobile, AL 36602

T: 251.308.3351 F: 251.287.1624

view location | map location

Baldwin | Washington | Clarke | Escambia | Covington | Geneva | Houston | Henry |  Dale | Coffee | Barbour | Pike |Crenshaw | Butler  | Monroe | Clarke | Choctaw | Wilcox | Bullock | Russell

hover over location name to preview, or click it for full details

Our Firm

our hi(story)

In 1963, Gene Kubicki founded the firm based on dedication to excellence. The same high standards have been maintained for over five decades -- years which have seen the firm’s ranks swell to over 200 attorneys.


Our team knows return clients are the life blood of any law firm and this is why we ensure client satisfaction by an exacting attention to service and quality.  Client service coupled with a spectacular work ethic, makes our team hard to beat.

find an attorney


Kubicki Draper is committed to fostering an environment of equal opportunity for success and believes diversity is not only a moral imperative, but is also sound business practice.

Read More


In response to the growing needs of its clients, the firm began expanding in the early 1980's and today is a diverse full-service law firm providing trial, appellate, coverage, commercial and real estate transaction services.

browse our practice areas


Kubicki Draper enjoys a national reputation for expertise in the handling of complex, high stakes litigation matters, as well as, appellate, general commercial and real estate practice.

preview our results


With a dozen offices throughout the State of Florida and other key points in the southern parts of Georgia, Alabama, and Mississipi, our firm is familiar to every venue statewide and will never get home-teamed.

find the location near you