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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

Widow Sues Indemnity to Recover Medicare Damages

September 26th, 2012 - A Kentucky woman has sued Indemnity Insurance Co. of North America in a “private attorney general” action aimed at collecting twice what the state government reportedly paid for medical care for her late husband.

Vivian McDonald sued the ACE Group unit in U.S. District Court in Louisville, Kentucky, pursuant to the private cause of action provision of the Medicare Secondary Payer Statute. She seeks to collect $360,372 from Indemnity, or twice the amount that Medicare paid for the care of Clinton McDonald.

An employee of O’Reilly Auto Parts, McDonald was injured on May 10, 2007, in an auto accident while working. He died on Nov. 5, 2007.

O’Reilly contested whether McDonald died of work-related injuries. On Dec. 28, 2009, the Commonwealth of Kentucky Workers’ Compensation Board ruled it work-related and said O’Reilly or its worker’s compensation insurer - Indemnity - was liable to pay for his medical care.

McDonald was a Medicare recipient at the time of the accident, and Medicare paid $180,185, on his behalf between the time of his accident and death.

Despite being what the lawsuit called a primary payer, Indemnity allegedly did not pay for any medical treatment for McDonald. That is wrongful conduct, said Mrs. McDonald, as she invoked the Medicare recovery law.

In her suit, Mrs. McDonald likened it to the federal False Claims Act, which allows private citizens to file cases in which the federal government has overpaid vendors. The Medicare Secondary Payer Statute was likewise meant to give private citizens, such as herself, an incentive to recover funds meant for Medicare.

Mrs. McDonald’s suit does not seek to recover any funds for Medicare, but does seek twice its payout amount for herself.

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