Jan. 2, 2013 – A lawsuit against 15 insurers in New York Supreme Court alleging they violated state law by going after patients for reimbursement who receive personal injury settlements has been dismissed.

The case involved the Medicare Secondary Payer Act, which is intended to prevent Medicare Advantage plans from claiming reimbursement of health care benefits from their enrollees who recover accident-related payments from third parties.

According to federal law, payments by Medicare Advantage Plans (MA Plans) are secondary to recoveries by beneficiaries in accident and other tort cases.

The plaintiffs claimed that efforts by the MA Plans violated a New York law which states that recoveries in an action for personal injuries, medical, dental, or podiatric medicine, or wrongful death, are conclusively presumed not to include any compensation for the cost of healthcare services. Accordingly, recoveries by individuals and settlement of such claims would not be available for reimbursement to insurers who provide health benefits related to such events.

The court held that the federal law that governs MA Plans preempts the state law and permits the MA Plans to seek recovery of benefits paid if an enrollee receives compensation in settlement of such claims.

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