Close

1.877.725.2467 info@medivest.com

Tag Archive for: Medicare Advantage Plans

Medicare Advantage Plan MSP Private Cause of Action Suits – Eleventh Circuit Update
by

Medicare Advantage Plan MSP Private Cause of Action Suits – Eleventh Circuit Update

Medicare Advantage Plan MSP Private Cause of Action Lawsuit Update

1. MSPA Claims 1, LLC v. Tenet Florida, Inc. — F.3d —- 2019 WL 1233207 18-11816 (11th Cir. March 18, 2019).

On March 18, 2019, in MSPA Claims 1, LLC v. Tenet Florida, Inc., the 11th Circuit Court of Appeals made it clear that while Medicare law as a whole and the Medicare Secondary Payer Act (MSP)[1] provisions in particular may be confusing, the MSP’s private cause of action provision [2] is clear[3]. MSPA Claims 1 (MSPA) appealed its dismissal by Defendant Tenet at the district court level in the Southern District of Florida. Because some changes had taken place since the dismissal, the appellate court indicated that MSPA was on solid legal footing if it had sued a primary plan instead of a medical provider. The take away of the Tenet case is that Medicare beneficiaries or entities such as Medicare Advantage Plans/Medicare Advantage Organizations (MAOs) that wish to bring private cause of action claims under the MSP may not bring those claims against medical providers and must only bring those MSP private cause of action double damages (MSP PCOA) claims against primary plans that fail to timely pay or reimburse the aggrieved party.

As a reminder, the MSP makes Medicare secondary to all primary plans including both Group Health Plans and Non Group Health Plans. Non Group Health Plan primary plans include Automobile Insurers, Liability Insurance (including Self Insurance),Workers’ Compensation (WC) Plans or Insurance, and No Fault Insurance.

In many other MSP PCOA MAO cases that have been reported, MAO’s have typically sued primary plans that failed to pay. Most courts that have evaluated the issue of the right of the MAO’s to bring MSP PCOA claims have acknowledged the right of MAO’s or their assigns to bring MSP PCOA claims against primary plans. By contrast, the Tenet case involved an assignee of a MAO that sued a medical provider. The dismissal of MSPA at the district court level for this case focused on deficiencies in MSPA’s assignment chain and not on which entity could be sued under the MSP private cause of action. The key MSP PCOA language that was analyzed in the Tenet case is as follows:

There is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).

42 U.S.C. § 1395y(b)(3)(A).

Comparing the limitations associated with the private cause of action with the public cause of action granted by the U.S. government in the MSP, the Eleventh Circuit clarified in Tenet that “[u]nlike the private cause of action, the government’s cause of action broadly permits lawsuits against ‘any entity that has received a payment from a primary plan’ – a grant that includes medical providers.” Id. (citing 42 U.S.C. § 1395y(b)(2)(B)(iii)(the MSP direct cause of action by the U.S.); Haro v. Sebelius, 747 F. 3d 1099, 1116 and U.S. v. Stricker, 524 F. App’x 500, 504 (11th Circ. 2013)(unpublished)). This means that while providers, attorneys, Medicare beneficiaries, or other entities that receive payment from a primary plan can be sued by the U.S. under the MSP for double damages, only primary plans themselves can be sued under the MSP PCOA.

Before reaching its decision, the Tenet court went through an analysis to confirm subject matter jurisdiction by determining whether MSPA had standing to pursue the claim. To that end, MSPA would need to show that it suffered an injury-in-fact, that was fairly traceable to the defendant’s conduct, and which was redressable by a favorable judicial decision. Id. at 2. The underlying federal claim revolved around the failure of the provider, Tenet, to pay a $286 medical bill on time. The bill was eventually paid approximately seven months late. Interestingly, the Eleventh Circuit explained that late payment was enough to show a concrete “injury-in-fact”. The Tenet court also explained why the assignment hurdles that had stopped MSPA at the district court level had been overcome at the time of the court’s decision. The district court evaluated the two-level assignment chain when the assignment chain was weak because the assignor, Florida Healthcare Plus (FHCP), had entered receivership proceedings and previously repudiated its assignment to La Ley, the entity that assigned the MSP PCOA claim to MSPA. The Eleventh Circuit in Tenet explained that just one week before its decision, FHCP entered into a settlement agreement with La Ley and MSPA that confirmed La Ley’s assignment of FHCP’s claim to MSPA and fully resolved the MSP Act assignment. Id. at 4. The court also dispelled Defendant/Appellee Tenet’s notion that an anti-assignment clause in a Hospital Services Agreement with assignee FHCP concerning the prohibition to assign hospital services would apply to the right of FHCP to assign its right (it received from the MAO) to La Ley that in turn assigned to MSPA the right to bring the MSP PCOA claim.

The Eleventh Circuit used established statutory interpretation rules to reach its final decision. MSPA argued that because paragraph (2)(A) that the private cause of action references makes a cross-reference to paragraph (2)(B), which establishes MSP conditional payment reimbursement and recovery (see MSP recovery actions by the U.S. and information on Medicare lien resolution and the new electronic payment functionality of the Medicare Secondary Payer Recovery Portal) rights, those recovery right concepts from paragraph (2)(B) should be incorporated back into the private cause of action. Essentially, MSPA was arguing that because other entities that receive payments from primary plans had obligations to reimburse Medicare for conditional payments and (2)(B) applies those recovery rights to this larger number of entities (“any entity that receives payment from a primary plan”), that the MSP PCOA could also be brought against any such entity that received a payment from a primary plan. This cross reference within a cross reference argument was shot down by the Tenet court as a “stretch.” Id. at 6. Alternatively, MSPA asked the court to rule in its favor based on authority from CMS promulgated regulations that afford MAOs the same MSP recovery rights as Medicare including the right to sue medical providers. Id. at 6 (citing 42 C.F.R.§§411.24(g), 422.108(f)). However, the Tenet court found the MSP statute to be clear and unambiguous and therefore, determined it unnecessary to look to the less authoritative CMS regulations for help with its interpretation of the MSP. Id. at 6. Because neither defendant was a primary plan, MSPA’s claim was dismissed.

2. MSPA Claims 1, LLC v. Infinity Property & Casualty Group, 2019 WL 1238852 (N.D. Al. March 18, 2019).

This second case was decided on the same day as the Tenet case but was heard at the federal trial level in the U.S. District Court in the Northern District of Alabama. This court falls within the same appellate jurisdiction (Eleventh Circuit) that decided the Tenet case. The same MSPA plaintiff discussed in the Tenet case above filed suit as an assignee of two different MAO’s on behalf of Medicare beneficiaries identified with their initials as representative examples (exemplars) for each of the two MAO’s. The asserted claims were MSP PCOA claims against insurance company, Infinity Property & Casualty Group, an undisputed primary payer. If the facts in this Infinity case were the same as those in the Tenet case except that the Defendant in this Infinity case was a primary payer instead of a medical provider, the case would have not been dismissed. However, the facts in this case were distinguishable from those of the Tenet case beyond who was sued. In the first claim of the Infinity case, MSPA was found by the court to have failed to show that Florida Healthcare Plus (FHCP – the same entity that was involved in a chain of assignments in the Tenet case), a MAO, had paid any medical bill connected to a claim of the exemplar Medicare beneficiary identified as D.W. The court seemed perturbed in announcing that Plaintiff MSPA knew what the court required but “due to a lack of either diligence or ability” failed to produce it. MSPA Claims 1, LLC v. Infinity Property & Casualty Group, 2019 WL 1238852 at 7 (N.D. Al. March 18, 2019). Without the connection to show that the MAO made a payment on behalf of the Medicare beneficiary, the Infinity court declared MSPA lacked standing to bring the claim.

The second claim of the Infinity case involved a MAO named Simply Healthcare Plans, Inc., its Management Service Organization (MSO) named InterAmerican Medical Center Group, LLC, and an exemplar Medicare beneficiary identified as B.G. The Infinity court pointed out that while the Eleventh Circuit in Western Heritage ruled that MAO’s accrue MSP PCOA recovery rights at the time they make conditional payments, the appellate court had not yet decided if the MSP statute also provides a private cause of action to MSO’s. Id. at 7 (citing Humana Medical Plan Inc. v. Western Heritage Ins., 832 F.3d 1229 (11th Cir. 2016). The Infinity court noted that district courts in the Eleventh Circuit and elsewhere overwhelmingly ruled that it does not. Id. (citing MSPA Claims I, LLC v. Liberty Mut. Fire Ins., 322 F. Supp. 3d 1273, 1283 (S.D. Fla. 2018); MAO-MSO Recovery II, LLC et al. v. State Farm Mut. Auto. Ins., 1:17-CV-1541-JBM-JEH, 2018 WL 2392827, at *7 (C.D. Ill. May 25, 2018). The Infinity court cited one case in which a district court did not rule out the possibility of MSO’s having MSP PCOA rights, citing MAO-MSO Recovery II, LLC v. Mercury General, 17-2525-AB and 17-2557-AB, 2018 WL 3357493, at *7 (C.D. Cal. May 23, 2018). The Infinity court followed the Eleventh Circuit’s Western Heritage reasoning that because the MSP does not provide conditional payment reimbursement authority to MSO’s and does not obligate MSO’s to make secondary payments to be reimbursed, the obligations of a MSO would be contractual as opposed to statutory. Id. at 8. Therefore, the court declined to expand the scope of potential plaintiffs under the MSP PCOA beyond those listed in Western Heritage (a MAO when the MAO makes a conditional payment for healthcare services, by a Medicare beneficiary when the Medicare beneficiary had healthcare services paid by Medicare (or a MAO), or a healthcare provider when that healthcare provider has not been fully paid for services provided to a Medicare beneficiary).

The Infinity court also pointed out some potential flaws in the assignment chain to the MSO from another entity called IMC which by contract, needed to approve the assignment of any purported MSP rights from the MSO to MSPA unless it was “ministerial in nature.” Because the evidence presented that the assignment was ministerial in nature failed to explain how it met the definition of that term in the contract, it failed the preponderance of the evidence standard, and the Infinity court found MSPA failed to show a valid assignment under its potential MSO claim.

Take Aways:

In the Eleventh Circuit (covering Florida, Georgia and Alabama), it is now clear that the following can sue a primary plan (only) under the MSP’s private cause of action:
• (1) a MAO when the MAO makes a conditional payment for healthcare services,
• (2) a Medicare beneficiary when the Medicare beneficiary had healthcare services paid by Medicare (or a MAO), or
• (3) a healthcare provider when that healthcare provider has not been fully paid for services provided to a Medicare beneficiary
____________________________________________________________
[1] 42 U.S.C. 1395y(b)(2) et seq.

[2] 42 U.S.C. § 1395y(b)(3)(A).

[3] MSPA Claims 1, LLC v. Tenet Florida, Inc. — F.3d —- 2019 WL 1233207 18-11816 (11th Cir. March 18, 2019) (citing The Federalist No. 62, at 421 (James Madison) (Jacob E. Cook ed., 1961) and MSP Recovery, LLC v. Allstate Ins. Co., 835 F. 3d 1351, 1358 (11th Cir. 2016).

MSP Private Cause of Action Assignments: Worth Billions?
by

MSP Private Cause of Action Assignments: Worth Billions?

Many people in the Medicare Secondary Payer industry know that some courts have granted Medicare Advantage Plans recovery of conditional payments from primary payers (primary plans) under the Medicare Secondary Payer statute, 42 U.S.C. § 1395y(b)(2) et seq. (MSP) and its MSP private cause of action provision, 42 U.S.C. § 1395y(b)(3)(A).  What may not be apparent is that many of the cases involving Medicare Advantage Plans are related by something other than just the type of insurance involved.  There is a group of companies based in South Florida, most represented by the same law firm, that uses a proprietary data collection system to help pursue these claims.[1]  If you haven’t seen or heard any news about the many lawsuits seeking these recoveries based on assignments from Medicare Advantage Plans, you probably will soon.  Just this week, a U.S. District Court in Wisconsin examined two such cases and while it recognized the general right of an assignee to sue based on an assignor’s injuries, dismissed the cases for lack of standing when plaintiffs failed to include sufficient facts about the assignments from Medicare Advantage Plans to establish standing.[2]  The MAO-MSO RECOVERY II et al. v. American Family Mutual Insurance Company court cited to over a dozen other similar cases by similar plaintiffs (represented by the same law firm mentioned below, or affiliates of same), many of which are in the initial pleading phase across the country.[3]  

Medicare Advantage Plans a/k/a Medicare+Choice plans or Part C Plans, fall under Medicare Part C[4], and are often referred to in case law as Medicare Advantage Organizations (MAOs).  MAOs allow Medicare beneficiaries to elect benefits through private HMO plans or other managed care arrangements administered by private entities instead of by the government agency responsible for implementing the Medicare program, the Centers for Medicare & Medicaid Services (CMS).  Our prior blog article discussed the 3rd Circuit (In re Avandia[5]) and 11th Circuit (Western Heritage[6]) appellate cases that paved the way for MAOs in those circuits to pursue MSP[7] private cause of action claims for double damages[8], when suing to recover conditional payments from primary plan payers[9] under the MSP.

MSP Law Firm, PLLC (MSP Law Firm) based in Miami, has been active in helping clients get assignments from MAOs and in pursuing suits asserting the MAOs’ rights as secondary payers, for double damages pursuant to the MSP private cause of action.  Numerous entities the firm represents or has represented (over 30 named LLCs are listed on the Florida Department of State website, many with common ownership) have sued primary plans such as no-fault insurers in this manner.  It appears that these entities have been part of lawsuits in at least 23 states with some of the cases being classified as multidistrict litigation cases (MDL), with many filed as class actions.  The firm’s website lists 79 class actions with two of the state-based cases having obtained class certification.  On November 16, 2017, one of the class certified cases had a preliminary $5 million settlement approval granted.[10]  According to an April, 2017 Daily Business Review article, John Ruiz, a MSP Law Firm partner, indicated there was a possibility of over a billion dollar verdict in another class action case, and in an August, 2017 Bloomberg BNA Daily Healthcare Report article, he indicated that the MSP Law Firm was readying 1,500 more lawsuits to be filed.[11]

The MSP Law Firm clients referenced in these MAO cases have alleged that they were assigned MSP private cause of action claims from the MAOs so that they could “step into the shoes” of the MAOs for those assigned rights.[12]  It is hard to say whether these cases will succeed when so many are still in the initial pleading phase.  On January 9, 2018, there was early signal, if not an indication, that at least one court in the 7th Circuit[13] may follow the 3rd  and 11th Circuits in granting the MSP private cause of action right to a MAO or its assignee, for claims against primary plans that fail to provide for primary payment or appropriate reimbursement.[14]  The MAO-MSO RECOVERY II et al. v. State Farm Mut. Auto. Ins. Co. (State Farm) case is another example of this type of MAO assignment case, this time in a U.S. District Court case in Illinois.  Because the Amended Complaint in the State Farm case was dismissed (with an allowance for the MAO-MSO entity to amend within 21 days), the court’s side discussion of the legal issues, known in the legal field as dicta, cannot be used as precedent.  However, the court recognized that other federal district courts have followed the reasoning and holdings of the 3rd Circuit (In re Avandia) and 11th Circuit (Western Heritage) cases.[15]  The State Farm court gave an indication that it confirmed both the right of a MAO to the MSP private cause of action and the right of an entity that has been assigned that right, to enforce it, signaling a strong potential that this court will follow the In re Avandia and Western Heritage reasoning if the Amended Complaint is amended a second time, and the case proceeds.

A similar issue arose in a U.S. District Court case in South Florida with some of the same plaintiffs in MAO-MSO Recovery II, LLC v. Boehringer, where in October 2017, the District Court for the Southern District of Florida dismissed a first Amended Class Action Complaint when plaintiffs failed to say which MAOs they received assignment from or “the dates of the assignments, or essential terms.”[16] In the second Amended Complaint, plaintiffs added a new plaintiff named MSP Recovery Claims, Series, LLC after finding a Medicare Advantage Plan member who had suffered an injury from taking Boehringer’s blood thinning drug, Pradaxa.  While many of these cases have been lodged against no-fault carriers with contractual payment obligations, the required “demonstrated responsibility” under the MSP for payment in the Boehringer case arose from tort liability.  Because the Pradaxa defendants settled a liability case, they became primary plan payers under the MSP by virtue of the settlement, regardless of whether they admitted liability.  On December 12, 2017 the Boehringer court dismissed the case for lack of standing because the most recent assignment for a newly named plaintiff took place after the original lawsuit was filed.  A new case will likely be filed by the entity the court said would have standing.

It is likely that these cases and other similar cases pursuing MSP private cause of action claims[17] will be active again very soon.  When complaints get dismissed, they are most often dismissed without prejudice, allowing the matters to proceed with amended pleadings.  If the plaintiffs in the above-described subject cases provide more specific descriptions of the assignments (such as naming the MAO’s they received assignment from under protective order if the MAO’s do not wish to be named, attaching copies of assignments to their complaints, and naming individual Medicare Advantage Plan members negatively affected by no payment or slow payment by primary plan payers), the proverbial floodgates of litigation could be opened.

Not all of the above-described MSP private cause of action MAO assignment cases are being held up at the pleading phase.  Yesterday, on February 21, 2018 a U.S. District Court in the Southern District of Maryland allowed two of these putative class action cases by MAO-MSO Recovery II, LLC, et al. to proceed against Government Employees Insurance Company (GEICO), one involving GEICO as a no-fault insurance primary plan and the other involving GEICO as a liability primary plan concerning settlements paid on behalf of its insureds, after denying GEICO’s motions to dismiss for lack of standing and failure to state a claim upon which relief could be granted.[18]  This means that responsive pleadings will need to be filed and discovery will get underway.  While it does not necessarily mean that class actions will be certified for these cases, (the judge ruling that issue would not be ready to be heard until a motion for class certification was filed by plaintiffs), now two additional MSP private cause of action MAO assignment cases are proceeding.

Take Aways:

  • There seem to be a growing number of courts recognizing the right of MAOs to the MSP private cause of action.  In addition to the 3rd and 11th Circuits, the right to the private cause of action by MAOs has also been favorably decided in federal district courts in the Eastern District of Virginia, the Eastern District of Tennessee, the Eastern District of Louisiana and the Western District of Texas.[19]
  • Primary payers including no-fault carriers, workers’ compensation carriers, liability carriers and self-insureds, should understand that Medicare Advantage Plans or their assigns, are filing MSP private cause of action of suits regularly and asking for double damages.
  • Prior to settlement, steps should be taken by all parties to expand lien search inquiries beyond traditional Medicare, Medicaid and SSDI searches to rule out Medicare Advantage Plan membership.
  • If a Claimant/Applicant is a Medicare Advantage Plan member and any payments by the Medicare Advantage Plan should have been paid by a primary payer, steps should be taken to get those conditional payments reimbursed promptly.
  • No-fault carriers that deny initial bills but later pay their policy limits for claims might still be held liable for amounts above those limits if courts rule in favor of MAOs or their assigns in MSP private cause of action claims for double damages (with the double portion of the double damages reaching past those limits).
  • The Court in the settled MSPA Claims 1 class action case listed in endnote 1 and 8 below examined the data mining “system” developed by the MSPA Claims 1 plaintiffs and its counsel.  Based on testimony from plaintiffs’ counsel and system experts, the Ocean Harbor court determined that plaintiffs could identify the amounts owed by using the Ocean Harbor’s electronic data, the MAO’s data, and data acquired from outside sources like the Department of Motor Vehicles, ISO and CMS. [J.A. 001484:13-18, Ruiz Testimony, June 2, 2016; J.A. 002000:15-25, 002001:1-3, Ruiz Testimony, Sept. 13, 2016].
  • If the plaintiffs in these MAO assignment cases can find the information, then the defendants should also be able to find the amounts claimed as owed under the MSP.  It seems that the information was all obtained during discovery and unless prevented through motions for protective orders (never guaranteed), will likely continue to be sought and obtained during litigation by these or similar plaintiffs.
  • Have a litigation plan in place and discuss it with your counsel.  With so much on the line, it is clearly time to set up operations to help minimize payment delays and the likelihood of a double damages claim!

[1] See Samantha Joseph, Deep Data Dive Lets Miami Firm Accomplish What Erin Brockovich Couldn’t, DAILY BUSINESS REVIEW, January 22, 2018, available at https://msprecovery.com/in-the-media/?dzsvg_startitem_dzs-video0=0&dzsvg_startitem_dzs-video1=0 (reporting on firm’s clients’ proprietary data mining  “system” using algorithms to cull data from automobile crash reports, medical files and government databases); See also, MSPA Claims 1, LLC v. Ocean Harbor Cas. Ins., No. 2015-1946-CA 06 (Fla. Cir. Ct Miami-Dade February 02, 2017) (class action settlement of $5 million given preliminary approval November 16, 2017).

[2] MAO-MSO Recovery II, LLC, MSP Recovery LLC, and MSPA Claims 1, LLC v. American Family Mut. Ins. Co. and American Family Ins., Case Nos. 17-cv-175-JDP; 17-cv-262-JDP, 2018 WL 835160 (W.D. Wi. Feb 12, 2018).

[3] Id. at 1. (citing MAO-MSO Recovery II, LLC v. Allstate, No. 17-cv-2370 (N.D. Ill.) (motion to dismiss pending); MAO-MSO Recovery II, LLC v. Erie Indemnity Co., No. 17-cv-81 (W.D. Pa.) (motion to dismiss pending); MAO-MSO Recovery II, LLC v. Farmers Ins. Exch., No. 17-cv-2559 (C.D. Cal.) (motion to dismiss granted with leave to replead); MAO-MSO Recovery II, LLC v. GEICO, No. 17-cv-964 (D. Md.) (motion to dismiss [denied – see endnote 18 below]); MAO-MSO Recovery II, LLC v. Liberty Mut. No. 17-cv-10564 (D. Mass.) (amended complaint filed); MAO-MSO Recovery II, LLC v. Mercury Gen., No. 17-cv-2557 (C.D. Cal.) (motion to dismiss granted with leave to replead); MAO-MSO Recovery II, LLC v. Nationwide, 17-cv-00263 (S.D. Ohio) (motion to dismiss pending); MAO-MSO Recovery II, LLC v. Progressive, No. 17-cv-686 (N.D. Ohio) (motion to dismiss pending); MAO-MSO Recovery II, LLC v. State Farm, No. 17-cv-321 (S.D. Ill.) (motion to granted with leave to replead); MAO-MSO Recovery II, LLC v. USAA, No. 17-cv-21289 (S.D. Fla.) (motion to dismiss pending); MAO-MSO Recovery II, LLC v. USAA Cas. Ins. Co., No. 17-20946-CIV (S.D. Fla.) (motion to dismiss granted with leave to replead); MAO-MSO Recovery II, LLC v. Boehringer Ingelheim Pharm., Inc., No. 17-cv-21996-UU (S.D. Fla.) (motion to dismiss granted with leave to replead). Plaintiffs filed at least one other similar case and then voluntarily dismissed it. MAO-MSO Recovery II, LLC v. AAA Auto Club, No. 17-cv-601 (C.D. Cal.)).

[4] 42 U.S.C. 1395w(21)-(27).

[5] In re Avandia Mktg., Sales Practices & Prods. Liab. Litig., 685 F.3d 353 (3d Cir. 2012).

[6] Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 832 F.3d 1229 (11th Cir. 2016).

[7] 42 U.S.C. 1395y(b).

[8] 42 U.S.C. 1395y(b)(3)(A).

[9] Primary plans regarding liability claims are known under the MSP as “applicable plans” and include the following: workers’ compensation laws or plans, no fault insurance, automobile or liability insurance policies or plans (including self-insured plans) all of which are categorized by Centers for Medicare & Medicaid Services (CMS) as Non Group Health Plans; meaning entities responsible for payment by contract or by liability settlement, judgment or award.

[10] MSPA Claims 1, LLC v. Ocean Harbor Cas. Ins., No. 2015-1946-CA 06 (Fla. Cir. Ct Miami-Dade February 02, 2017) (class action settlement of $5 million given preliminary approval November 16, 2017) (see also Samantha Joseph, Deep Data Dive Lets Miami Firm Accomplish What Erin Brockovich Couldn’t, DAILY BUSINESS REVIEW, January 22, 2018, available at https://msprecovery.com/in-the-media/?dzsvg_startitem_dzs-video0=0&dzsvg_startitem_dzs-video1=0 (reporting on firm’s clients’ proprietary data mining  “system” using algorithms to cull data from automobile crash reports, medical files and government databases); MSPA Claims 1, LLC v. IDS Property Casualty Ins., No. 2015-27940 (approval given by judge to plaintiffs to send class action notices in January 2018).

[11] Eric Topor, Managed Care Lawsuit Wave Inundating No-Fault InsurersBLOOMBERG BNA HEALTH CARE DAILY REPORT, August 18, 2017 (Entities described included MAO-MSO Recovery, LLC (now there is also a MAO-MSO Recovery II, LLC),MSPA Claims 1, LLC, MSP Recovery, LLC and MSP Recovery Claims, Series, LLC and while attorney Ruiz said none of the principals or partners at the MSP Recovery Law Firm have any ownership in the corporate entities that have been assigned the Medicare Advantage claims, his son is one of several owners of MSP Recovery Services, LLC, which owns MSPA Claims 1) available at http://msprecoverylawfirm.com/in-the-media/;  Celia Ampel, How a Miami Law Firm Plans to Recover Billions for Medicare, DAILY BUSINESS REVIEW, April 6, 2017, available at https://www.law.com/dailybusinessreview/almID/1202783135691; Katheryn Hays, 11th Circuit Puts Insurers on the Hook to Repay Billions, TUCKER DAILY REPORT, Sept. 2, 2016, available at  https://www.law.com/dailyreportonline/almID/1202766635114/?slreturn=20180012144002.

[12] MSP Recovery, LLC v. Allstate Ins. Co., 835 F.3d 1351 (11th Cir. 2016)(holding that the assignment interest was valid, partially relying on CMS regulations 42 C.F.R. §422.22(a) and (b) for guidance, finding that a contractual obligation from a settlement may serve as sufficient demonstration of responsibility for payment under the MSP private cause of action without a need to first sue for breach of contract to prove said responsibility.

[13] Covering Illinois, Indiana and Wisconsin.

[14] MAO-MSO Recovery II, LLC, MSP Recovery LLC, and MSPA Claims 1, LLC v. State Farm Mut. Auto. Ins. Co., Case No. 1:17-cv-01537-JBM-JEH, 2018 WL 340020 (C.D. Ill Jan. 9, 2018).

[15] Id.  (citing Humana Ins. Co. v. Paris Blank LLP, 187 F.Supp. 3d 676, 681 (E.D. Va. 2016); Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 94 F.Supp.3d 1285, 1290–91 (S.D. Fla. 2015); Cariten Health Plan, Inc. v. Mid-Century Ins. Co., No. 14-476, 2015 WL 5449221, *5-*6 (E.D. Tenn. Sept. 1, 2015); Collins v. Wellcare Healthcare Plans, Inc., 73 F.Supp.3d 653, 664–65 (E.D. La. 2014); Humana Ins. Co. v. Farmers Tex. Cnty. Mut. Ins. Co., 95 F.Supp.3d 983, 986 (W.D. Tex. 2014).

[16] MAO-MSO Recovery II, LLC v. Boehinger Ingelheim Pharm, Inc., No. 1:17-cv-21996-UU, 2017 WL 4682335 (S.D. Fla. Oct. 10, 2017).

[17] MAO-MSO Recovery II, LLC; MSP Recovery, LLC; MSPA Claims 1, LLC v. Infinity Prop. & Cas. Group, 2017 WL 6998950 (N.D. Oh. Aug. 23, 2017) (Pleading phase – Plaintiff’s Memorandum in Opposition to Defendant’s Motion to Dismiss); MAO-MSO Recovery II, LLC; MSPA Claims 1, LLC v. Liberty Mut. Holding Co., (D. Mass. June 28, 2017) (Pleading phase – Defendant’s Motion for More Definite Statement).

[18] MAO-MSO Recovery II, LLC, et al., v. Government Employees Ins. Co., Additional Plaintiff Party Names: MSP Recovery, LLC, MSPA Claims 1, LLC, No. PWG-17-711,PWG-17-964, 2018 WL 999920 (D. Md. Feb. 21, 2018).

[19] Humana Ins. Co. v. Paris Blank LLP, 187 F.Supp. 3d 676 (E.D. Va. 2016); Cariten Health Plan, Inc. v. Mid-Century Ins. Co., No. 14-476, 2015 WL 5449221 (E.D. Tenn. Sept. 1, 2015); Collins v. Wellcare Healthcare Plans, Inc., 73 F.Supp.3d 653 (E.D. La. 2014); Humana Ins. Co. v. Farmers Tex. Cnty. Mut. Ins. Co., 95 F.Supp.3d 983 (W.D. Tex. 2014).

 

 

by

Medicare Advantage Plan Awarded Double Damages in MSP Private Cause of Action Case

An interesting Medicare Secondary Payer (MSP) private cause of action case has just been decided that involves a Medicare Advantage Plan (MAP) and double damages.

Medicare Part C established Medicare Advantage Plans (MAPs) in 1997 to give Medicare beneficiaries the option of receiving Medicare benefits through private insurers. The goal was to harness the power of private sector competition to hopefully create a less expensive Medicare system.

The pertinent facts in this case are that Mary Reale was enrolled in a Humana Gold Plus Medicare Advantage Plan (MAP) when she sustained injuries in a slip-and-fall accident at a condominium complex. Humana paid $19,155.41 for her injury related medical expenses. Ms. Reale later filed a personal injury claim with the condo’s liability carrier, Western Heritage, in state court. While that state court case was awaiting an appellate court decision, the Humana v. Western Heritage action was filed in the United States District Court for the Southern District of Florida by Humana to recover $19,155.41 in conditional payments plus another $19,155.41 in double damages.

The U.S. District Court found that:

  • The Third Circuit’s analysis in In re Avandia 685 F.3d was persuasive that the statutory text of the MSP clearly indicates that MAPs can bring a private cause of action.
  • Western Heritage was a primary payer under the MSP Act and is responsible for reimbursing Humana.
  • Humana was statutorily entitled to recover double the amount that it paid on behalf of Ms. Reale.

The U. S. District Court granted the plaintiffs Motion for Summary Judgment and ordered Western Heritage to pay $38,310.82 to Humana.

To read Humana v. Western Heritage, 2015 U.S. Dist. Lexis e31875 click here.