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February 17, 2023

Professional Liability Policies Do Not Cover Claims For Medicare Reimbursement under Iowa Insurance Laws

In DeWall v. Med. Protective Co., the 8th Circuit recently addressed coverage for Medicare overpayment disputes under Iowa insurance laws. The Court affirmed the district court’s holding that a third party’s “Medicare recoupment” claim against an insured clinic and its medical director is not based on the rendering of “professional services” and, thus is not subject to additional coverage under its professional liability insurance policy. The insurance policy insured against “claim[s] for damages ... based on professional services rendered or which should have been rendered ... by the insured ... in the practice of the insured’s profession.” The Court determined that the language in the policy did not cover the third party’s claim brought to recover Medicare reimbursements it had to repay because of deficiencies in the clinic’s documentation of the professional services it provided. The clinic’s argument that Iowa courts “routinely recognize that patient documentation and assessment are professional services” failed.

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