Federal Government’s Right to Sue and Collect Double Damages

360.1 - Federal Government’s Right to Sue and Collect Double Damages (Rev. 4, 10-01-01) Separate from its subrogation rights, the Federal Government has an independent right to take legal action to recover payments from entities that are required or responsible to pay benefits primary to Medicare, but fail to do so. The Federal Government may recover double damages in this type of lawsuit pursuant to §1862(b)(2)(B)(ii) of the Act. Entities that are required or responsible to pay primary to Medicare include: • A group health plan, including insurers, employers, and third party administrators of such plans; • A LGHP, including insurers, employers, and third party administrators of such plans; • Any liability insurance policy or plan, including a self-insured plan; • A WC plan; and • An automobile or non-automobile no fault insurance plan. The Medicare cost-based HMO/CMP should refer any case in which an entity is required or responsible to make primary payment, but refuses to do so, to the CMS RO servicing the HMO/CMP’s area. The HMO/CMP should include, in addition to the beneficiary’s name, address, and SSN or HICN, the formal name and address of the insurer or HMO/CMP; the employee brochure that describes health benefits and coverage; the name and address of the entity required or responsible for making payment on behalf of the plan (e.g., the employer, an insurer or a third party administrator (TPA)); a copy of the employer’s agreement with the TPA; the name of the sponsoring or contributing employer or employee organization; the provider’s name, address, and identification number; the specific amount of mistaken primary benefits Medicare paid; the specific date(s) of service; the specific procedure or diagnosis code(s) the MSP type (e.g., ESRD or working aged); and a full explanation of the reasons for the referral. The CMS RO reviews the case file for completeness and obtains any needed additional information. When the file is complete, the CMS RO refers the case to CMS CO. CMS CO considers possible legal action to collect double damages from that entity. The government’s right to sue and collect double damages is effective for items and services furnished on or after December 20, 1989, under all MSP provisions except the MSP for the disabled provision. The government’s right to sue and collect double damages under the MSP for the disabled provision, is effective for items and services furnished on or after January 1, 1987.