No Double Damages While Coverage Is Still in Dispute: Court Protects Insurers from Premature MSPA Claims

Workers' compensation carriers entering into settlements with Medicare beneficiaries should be aware of their responsibility to resolve Medicare conditional payment liens, especially given the threat of double-damages litigation under the federal government's cause of action under the Medicare Secondary Payer Act (MSPA), 42 U.S.C. § 1395y(b)(2)(B)(iii), and/or the private cause of action, 42 U.S.C. § 1395y(b)(3)(A), if conditional payments are not properly resolved. But if the underlying workers' compensation coverage is being disputed, when should a carrier potentially face exposure for double damages under the MSPA?

Factual Overview

In Bronson Healthcare Grp., Inc. v. Conifer Ins. Co., 2026 Mich. App. LEXIS 924, Conifer Insurance Company, provided workers’ compensation insurance to a fraternal organization located in Battle Creek, Michigan where a bartender injured her hip in June 2017. Bronson Healthcare provided treatment to the bartender and billed Conifer, but Conifer denied the claim on the basis that the bartender was a volunteer and not an employee and therefore was not covered under the workers’ compensation plan. Medicare made conditional payments for the bartender’s medical expenses.

While the workers’ compensation proceedings were pending, Bronson Healthcare brought a private cause of action against Conifer under the MSPA. The trial court denied Conifer's request for a stay pending the administrative appeal over employment status and granted Bronson Healthcare's motion for summary disposition finding collateral estoppel precluded Conifer from relitigating the issue.

The appellate court reversed that decision noting that the trial court erred by granting summary disposition and Bronson Healthcare prematurely brought a claim under the MSPA.  The court held that when the insurer has a good-faith ground for disputing coverage, there cannot be a viable cause of action under the MSPA unless and until it is demonstrated that the insurer has a responsibility to pay but fails to do so in a timely manner consistent with the MSPA. 

The trial court’s order was vacated, and the case was remanded with instructions to dismiss without prejudice.

Sanderson Firm Commentary

The appellate court correctly concluded that to allow an MSPA claim to proceed while there is an ongoing dispute about workers’ compensation coverage would create procedural problems for the court and insurers could potentially be penalized with double damages just for contesting liability on claims.

Additionally, the appellate court noted that there was limited relevant case law in regard to MSPA actions for workers’ compensation claims but agreed with the findings of other cases that responsibility for payment of a Medicare beneficiary's medical costs must be demonstrated before a private cause of action can be brought under the MSPA.

While the court correctly found this MSPA claim was brought prematurely, this case does serve as a reminder to insurers that other entities besides Medicare and Medicare Advantage Plans may also have grounds to bring a claim for double damages under the MSPA.

If your organization has a question regarding this case or would like more information about Sanderson Firm’s Medicare conditional payment lien resolution services, please contact us.