Another MSP Case Invades a Jurisdiction: The Sixth… This Time.

Another Medicare Secondary Payer (MSP) case involving the well-known entities, MAO-MSO, Recovery II, LLC MSP Recovery, LLC and MSPA Claims 1, LLC (“Plaintiffs”) has arisen out of the Sixth Circuit.[1] (MAO-MSO Recovery II, LLC v. Progressive Corp., No. 1:17CV390, 2018 U.S. Dist. LEXIS 119046, (N.D. Ohio July 17, 2018).  This recent opinion is issued in response to a Motion to Dismiss filed by Defendant, Progressive Corp, an automobile no-fault insurance coverage provider.  You may recall that Plaintiffs have been championing claims across the nation alleging that Non-Group Health Plans (NGHPs) are failing to make payment first, and have allowed secondary payers, particularly Medicare Advantage Organizations (MAOs), to pay first.  Each case is brought on the premise that there has been an assignment to Plaintiffs from an MAO, and because of the NGHP’s action in failing to make payment first, the MAO has been injured, and subsequently entitled to double damages pursuant to the Medicare Secondary Payer Act (MSPA).

In this most recent case, the Plaintiffs are entities which alleged they were assigned “all rights, title, and interest allowing them to bring these claims” by several unspecified MAOsId. at 4.  Plaintiffs alleged that Defendant was obligated to pay all medical expenses up to a certain threshold to several Medicare enrollees; and failed to do so.

In order for such a claim to proceed, the pleading party must demonstrate standing.  The Court in addressing Defendant’s Motion to Dismiss noted that in order,

“To satisfy Article III’s standing requirements, a plaintiff must show: ‘(1) [he] has suffered an ‘injury-in-fact’ that is (a) concrete and particularized and (b) actual and imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. For an injury to be particularized, ‘it must affect the plaintiff in a personal and individual way.” Id. at 8. (internal citations omitted).

In this particular case, the Plaintiffs not only failed to present any evidence demonstrating a valid assignment from an MAO, but also failed to identify any claims that the MAO paid conditionally.  The Court opined that,

“…without documentation showing that at least one Plaintiff has been assigned recovery rights from at least one MAO, the Court cannot find that Plaintiffs have satisfied their burden of proving Article III standing. Since Plaintiffs themselves are not MAOs, Plaintiffs must show an injury-in-fact by presenting a valid assignment from an MAO. Because Plaintiffs have not done so, the Court finds that it lacks subject matter jurisdiction over this case.” Id. at 10.

As a result, this case has been dismissed.

This is yet another MSP case invading another Circuit, where Plaintiffs are challenging the boundaries of the MSPA.  These Plaintiffs have succeeded in the Second, Third, and Eleventh Circuit, which have permitted suit by an MAO against a primary payer for failing to reimburse an MAO for making payment.  Unfortunately, we will continue to see these cases invade various jurisdictions.  The continuing and growing concern is that it is just a matter of time before these Plaintiffs get it right, in yet another jurisdiction.

In the meantime, we continue to recommend creating internal processes on how to timely handle conditional payments, MAP recoveries, and other liens.  We also suggest the following best practice tips to ensure that primary plans are aware of any MAOs in which a Medicare beneficiary may be enrolled:

 

  • Ask questions of beneficiaries, to determine if in fact they have supplemental plans;
  • Ask to see Medicare cards;
  • Understand the differences between CMS and MAOs and that these entities do not operate in the same fashion; and
  • Do not assume medical treatment has terminated because you have not received bills. Ask whether beneficiaries are still treating; and
  • Most importantly- respond to all correspondence from MAOs, timely and promptly.

We will keep our readers updated on further MSP litigation.


[1] The Sixth Circuit encompasses the states of Michigan, Ohio, Kentucky, and Tennessee.

Comments are closed.