United States District Court, N.D. Alabama, Southern Division
MAO-MSO RECOVERY II LLC, a Delaware entity, et al., on behalf of themselves and others similarly situated Plaintiffs,
INFINITY PROPERTY & CASUALTY GROUP, an Alabama company, Defendant.
OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE
matter is before the court on Defendant Infinity Property
& Casualty Corporation's motion to dismiss the
amended complaint or, alternatively, motion for a more
definite statement. (Doc. 15).
are MAO-MSO Recovery II, LLC; MSP Recovery, LLC; and MSPA
Claims 1, LLC, and Defendant Infinity is a car insurance
company that offers coverage for “any automobile
accident-related medical expenses.” (Doc. 26 at 1-2).
Plaintiffs allege that Infinity insured Medicare
beneficiaries who incurred medical costs for injuries
received in car accidents. According to Plaintiffs, Infinity
failed to pay those medical costs, causing certain Medicare
Advantage Organizations to pay them instead. And although
Infinity was statutorily required to reimburse the Medicare
Advantage Organizations, Infinity failed to do so. Plaintiffs
allege that they have standing to seek reimbursement from
Infinity because the Medicare Advantage Organizations
assigned their rights of recovery to Plaintiffs.
court WILL DENY the motion to dismiss the amended complaint
because the court finds that Plaintiffs adequately allege
that Medicare Advantage Organizations assigned their rights
to Plaintiffs and that the amended complaint sets out facts
that, if true, show that Infinity is required to reimburse
Plaintiffs. But the court WILL GRANT the alternative motion
for a more definite statement.
case arises under the Medicare Secondary Payer statute. (Doc.
26); see 42 U.S.C. § 1395y(b). Under
the statute, Medicare is the “secondary payer”
after all other sources of coverage. 42 U.S.C. §
1395y(b)(2). In the words of the Medicare Secondary Payer
statute, “if a primary plan . . . has not made or
cannot reasonably be expected to make payment with respect to
[an] item or service promptly, ” the secondary
payer-Medicare-may make a conditional payment. 42 U.S.C.
§ 1395y(b)(2)(B)(i)-(ii). But if Medicare does pay for a
service that a primary payer should have covered, it can seek
reimbursement from the primary payer or from the recipient of
the payment, and damages if the primary payer fails to
reimburse it. 42 U.S.C. § 1395y(b)(3)(A) (“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) . . .
.”); United States v. Baxter Int'l, Inc.,
345 F.3d 866, 875 (11th Cir. 2003).
with the Medicare Secondary Payer statute is the existence of
private insurers called Medicare Advantage Organizations.
(Doc. 2 at 5). Medicare Advantage Organizations,
“either themselves or through Maintenance Service
Organizations . . . deliver the Medicare benefits and assume
the risks related to insuring the [Medicare]
enrollees.” MAO-MSO Recovery II, LLC v. USAA Cas.
Ins. Co., 2017 WL 6411099 (S.D. Fla. Dec. 14, 2017); 42
U.S.C. § 1395w-21(a)(1)(B); (see also Doc. 26
at 5 n.4). The Medicare Secondary Payer statute extends to
Medicare Advantage Organizations, which means that like
Medicare itself, Medicare Advantage Organizations are
secondary payers. 42 C.F.R. § 422.108(f). As a result,
if a Medicare Advantage Organization and another insurance
company provide overlapping coverage for a Medicare
beneficiary, the other insurance company becomes the primary
payer and the Medicare Advantage Organization is the
secondary payer; if the insurance company fails to make a
required payment and the Medicare Advantage Organization
makes a conditional payment, the Medicare Advantage
Organization may sue the insurance company for damages.
See 42 U.S.C. § 1395y(b)(3)(A).
assert that Infinity provided car insurance, which included
coverage for medical payments “for any automobile
accident-related medical expenses, ” to
“[n]umerous Medicare beneficiaries” who were
members of the assignor Medicare Advantage Organizations.
(Doc. 26 at 2, 13). They allege that the Medicare
beneficiaries were involved in car accidents and incurred
medical expenses, and that Infinity was aware of the
accidents and even assigned claim numbers. (Id. at
14). But, according to Plaintiffs, Infinity “failed to
pay and/or properly reimburse” the Medicare Advantage
Organizations. (Id.). Plaintiffs explain that,
although they are not themselves Medicare Advantage
Organizations, “[n]umerous” Medicare Advantage
Organizations “have assigned their recovery rights to
assert the causes of action alleged in this Complaint.”
(Id. at 12-13).
putative class action, Plaintiffs assert two claims: (1) a
claim under 42 U.S.C. § 1395y(b)(3)(A) for double
damages because Infinity failed to make the required primary
payments or reimbursements to the assignor Medicare Advantage
Organizations; and (2) direct right of recovery, under 42
C.F.R. § 411.24(e), for Infinity's breach of
contract with its insureds. (Id. at 17, 19). They
provide two “representative” claims with two
named Medicare Advantage Organizations, one Maintenance
Service Organization, and the initials of two Medicare
Infinity moved to dismiss the amended complaint, the court
ordered Plaintiffs to “submit the document or documents
purporting to assign the two representative Medicare
Advantage Organizations' rights of recovery and
reimbursement to Plaintiffs.” (Doc. 34). Plaintiffs
responded to the show cause order with several sets of
assignment agreements assigning a Medicare Advantage
Organization's and a Maintenance Service
Organization's rights to Plaintiff MSPA Claims 1.
(See Docs. 35 to 35-6).
moves to dismiss the amended complaint under Federal Rule of
Civil Procedure 12(b)(1), for lack of standing, and under
Rule 12(b)(6), for failure to state a claim. (Doc. 15 at 13,
17). In the alternative, it moves for a more definite
statement, under Rule 12(e). (Id. at 23). The court
addresses the issue of standing first because standing
“is a threshold jurisdictional question which must be
addressed prior to and independent of the merits of a
party's claims.” DiMaio v. Democratic Nat.
Comm., 520 F.3d 1299, 1301 (11th Cir. 2008).
Rule of Civil Procedure 12(b)(1) permits a district court to
dismiss for “lack of subject-matter
jurisdiction.” Fed.R.Civ.P. 12(b)(1); In re
Weaver, 632 F.2d 461, 463 n.6 (11th Cir. 1980). “A
defendant can move to dismiss a complaint under Rule 12(b)(1)
for lack of subject matter jurisdiction by either facial or
factual attack.” Stalley ex rel. United States v.
Orlando Reg'l Healthcare Sys., Inc., 524 F.3d 1229,
1232 (11th Cir. 2008). “At the pleading stage, general
factual allegations of injury resulting from the
defendant's conduct may suffice, for on a motion to
dismiss we presume that general allegations embrace those
specific facts that are necessary to support the