United States District Court, N.D. Alabama, Southern Division
OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE
what a tangled web we weave / When first we practice to
deceive!” Sir Walter Scott, Marmion, Canto VI, Stanza
its tangled web of assignments, receiverships, and fictitious
entities, Plaintiff MSPA Claims I, LLC aims not to deceive
but rather to catch a lucrative class action lawsuit under
the Medicare Secondary Payer statute. But Defendant Infinity
now challenges MSPA‘s standing to bring its claims at
all, arguing in its motion to dismiss that certain strands of
the web cannot withstand the court‘s scrutiny and that
the entire structure must fail as a result. (Doc. 49).
reasons discussed below, this court will GRANT Defendant
Infinity‘s motion to dismiss MSPA‘s remaining
claims as lacking Article III standing. And the court will
DISMISS WITH PREJUDICE MSPA‘s entire complaint under
Rule 12(b)(1) for lack of subject matter jurisdiction.
1980, Medicare was the primary payer for all claims except
those covered by Workers‘ Compensation, Federal Black
Lung benefits, and Veteran‘s Administration benefits.
Medicare Secondary Payer, Centers for Medicare &
(last modified Jan 1, 2014). To promote the Medicare trust
fund‘s solvency, Congress passed the Medicare Secondary
Payer statute in 1980, making Medicare the “secondary
payer” to certain primary plans and shifting costs to
private sources of payment. Id.; 42 U.S.C. §
the MSP statute, if Medicare pays for a service that a
primary payer should have covered-known as a
“conditional payment”-it can seek reimbursement
from the primary payer or from the recipient of the payment,
as well as 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) . . .
with the MSP statute is the existence of insurers called
Medicare Advantage Organizations (MAOs), which can also serve
as “secondary payers” and “exercise the
same rights to recover from a primary plan, entity, or
individual that the Secretary exercises under the MSP
regulations.” 42 C.F.R. § 422.108(f).
claims arise under the MSP statute and its implementing
regulations, though Plaintiff is not itself an MAO. (Doc. 26
at ¶ 4). Instead, Plaintiff alleges standing as the
assignee of the recovery rights of two MAOs-Florida
Healthcare Plus, Inc. and Simply Healthcare Plans, Inc. In
this putative class action lawsuit, Plaintiff alleges
Defendant Infinity failed to make primary payments on the
claims of two “exemplar” Medicare enrollees,
identified as D.W. and B.G., and failed to reimburse the
appropriate secondary payer organization. The court describes
each exemplar‘s claim, along with its applicable chain
of assignments below.
Healthcare Plus, Inc. and “D.W.”
MSPA alleges that Defendant Infinity provided car insurance,
which included coverage for medical payments “for any
automobile accident-related medical expenses, ” to a
Medicare enrollee identified as D.W. (Doc. 26 at ¶ 3,
58, 69). D.W.‘s car was rear-ended in 2013, and
Infinity subsequently sent D.W. a letter indicating personal
injury protection with a $10, 000 limit and a $1, 000
deductible. (Doc. 49-8). Infinity claims that, to date, it
has paid every single medical bill related to D.W.‘s
claim as required by the policy and that D.W. still has
$488.63 in benefits remaining under his policy. (Docs. 49 at
¶¶ 39-40 and 49-13).
alleges that Florida Healthcare Plus, an MAO, insured D.W. at
all times relevant to the instant action and paid $140.47 on
a $1, 468.04 bill in 2013. (Doc. 60 at ¶¶ 99, 119).
But Infinity disputes this relationship and asserts that
Plaintiff has not produced sufficient evidence to establish
any connection between D.W. and FHCP, much less that FHCP
“paid a bill that Infinity had an obligation to pay,
for which FHCP has not since been reimbursed.” (Doc. 65
at 9- 11). To establish FHCP‘s having paid an amount
Infinity should have paid, Plaintiff points to (1) the
affidavit of its own data analyst, (doc. 60-1); (2) a summary
sheet of D.W.‘s medical expenses, (doc. 60-3); (3)
copies of two different claim and coverage summaries from
third-party data aggregators, (docs. 60-7 and 60-8); and
another affidavit from Plaintiff‘s own data analyst,
assigned all its rights of recovery under the MSP statute to
La Ley Recovery Systems, Inc. on April 15, 2014. (Doc. 35-3).
Per the agreement, La Ley could not assign those recovery
rights to a third party without FHCP‘s approval. (Doc.
35-3 at § 1.2). The Florida Department of Financial
Services assumed these approval rights when it became
receiver of FHCP on December 10, 2014. (Doc. 35-5 at 1).
attempted to re-assign FHCP‘s original recovery rights
to Plaintiff MSPA on February 20, 2015, without the approval
of FHCP‘s receiver. But after challenging and
repudiating this attempted assignment, the receiver
ultimately agreed to the assignment on June 1, 2016. (Doc. 49
at ¶ 14).
earlier pleadings identified yet another attempted transfer
between Plaintiff MSPA and former plaintiff MAO-MSO Recovery
II, LLC, Plaintiff has since attributed that allegation to
scrivener‘s error and moved to dismiss MAO-MSO from
this case. (Doc. 60 at 26-27).
/ InterAmerican and “B.G.”
also brings claims under the MSP statute pursuant to the
recovery rights of MAO Simply Healthcare Plans, Inc. and its
Management Service Organization (MSO) InterAmerican Medical
Center Group, LLC.
alleges that Infinity provided car insurance that included
coverage for automobile-accident-related medical expenses to
a Medicare enrollee identified as B.G. (Doc. 26 at ¶ 3,
58, 69). B.G. was injured in a car accident in 2013 and
timely reported her claim to Infinity. (Doc. 49 at
¶¶ 58-59). Infinity confirmed receipt of
B.G.‘s claim and internally indicated that B.G. had
personal injury protection with a $10, 000 limit and a $1,
000 deductible.(Docs. 49-19 at 9, 49-23 at 2). Infinity
claims that it paid all medical bills related to B.G.‘s
claim as required by the policy and that B.G. exhausted her
benefits under her policy on July 5, 2013. (Doc. 49 at ¶
alleges MAO Simply insured B.G. and contracted with MSO
InterAmerican to manage and provide healthcare services for
certain enrollees, including B.G. (Doc. 60 at 33).
to Plaintiff, the Simply-InterAmerican contract either
assigned to InterAmerican Simply‘s MSP statutory
recovery rights as to claims InterAmerican serviced under the
contract or made InterAmerican a potential secondary payer
under the MSP statute. (Doc. 60 at 33-36). But Infinity
contends the agreement “is not a clear assignment of
any [MSP statute] claim to InterAmerican.” (Doc. 49 at
¶ 47). Regardless, the agreement‘s express
language provides that InterAmerican ...