Michigan Court Overturns Ruling on Double Damages for MSPA

A Michigan appellate court has overturned a lower court's decision permitting a hospital system to seek double damages from a workers compensation insurer under the federal Medicare Secondary Payer Act (MSPA) before resolving a coverage dispute. This landmark ruling highlights the complexities of regulatory compliance requirements in payer-provider relationships and underscores the necessity of confirmed liability in reimbursement claims.

Payer-Provider Dispute Overview

In the case of Bronson Healthcare Group, Inc. v. Conifer Insurance Company, the Michigan Court of Appeals determined that healthcare providers cannot initiate private actions under the MSPA without established liability and delayed payments by the insurer. The dispute emerged following hip injury treatment of a bartender, whose employment status was contested by Conifer Insurance. With Medicare issuing conditional payments, Bronson Healthcare pursued double damages despite unresolved coverage status.

Implications for Risk Management

The appellate court's decision emphasizes that the MSPA's "demonstrated responsibility" requirement must be fulfilled before any double-damages lawsuits, avoiding premature federal penalty cases. Insurers can contest liability without facing punitive damages if legitimate grounds exist. This ruling is significant for industry professionals focusing on risk management, regulatory compliance, and claims processes as it ensures clarity in legal precedents.

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