On Tuesday, May 31, 2016, MSP Recovery Law Firm (“MSP Recovery”) won a major victory for the Medicare Advantage Organizations’ (“MAO”) reimbursement rights and its clients. MSP Recovery solidified a fine-line between state law claims and federal court jurisdiction. In the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida, MSP Recovery clearly established in its case, MSPA Claims I, LLC v. IDS Property Casualty Insurance Company, Case No. 2015-027940-CA-01 (“MSPA v. IDS”) presiding before the Honorable Judge Antonio Arzola, that MSP Recovery properly stated a cause of action for various breach of contract claims, and such claims can be brought in state court regardless of the underlying facts’ association to MSP Law.
MSP Recovery is dedicated to maximizing the recovery of various Health Maintenance Organizations (“HMO”), Management Service Organizations (“MSO”) and Independent Practice Organizations (“IPA”) (collectively referred to as “Clients”). MSP Recovery seeks reimbursement against various insurance companies that fail to fulfill their responsibility, as the primary insurer, to pay medical expenses incurred after an enrollee, 65 years or older, becomes involved in a vehicular or slip-and-fall accident. As a result, in MSPA v. IDS, MSP Recovery successfully convinced the Honorable Judge Arzola that Florida law has a place for reimbursement rights via breach of contract claims.
In the MSPA v. IDS hearing, one of the issues addressed was Defendant’s, IDS Property Casualty Insurance Company (“Defendant”), Motion to Dismiss Plaintiff’s, MSPA Claims I, LLC (“Plaintiff”), various breach of contract claims. The facts pertained to an Enrollee that was in an accident that resulted in injuries arising from the use, maintenance, or operation of a motor vehicle. Ultimately, Plaintiff paid the medical expenses when the primary insurer, Defendant, was supposed to pay and failed to do so.
Lead attorneys in this case, John H. Ruiz, Esq., Frank C. Quesada, Esq., and Gonzalo R. Dorta, Esq., maintained the position throughout the proceedings that Plaintiff owns Enrollee’s claims and, as such can bring suit on his or her behalf. Plaintiff originally presented claims for double damages pursuant to § 1395y(b)(3)(A) of MSP Law, and four breach of contract claims. Upon the dismissal of the MSP Law claim, Defendant sought to dismiss the remaining four breach of contract claims.
Plaintiff presented illustrative arguments supported by the Code of Federal Regulations (“CFR”). Plaintiff sufficiently alleged in its pleadings that the facts and law supported its authority to bring its breach of contract claims. Particularly, during the hearing, Mr. Ruiz emphasized, “422.408, CFR, specifically states that an [MAO] will exercise the same rights to recover from a primary plan entity or individual that the secretary exercises under MSP regulations.” Mr. Ruiz further summarized the meaning behind 42 CFR 422.408 by stating,
It just basically means that if the government can do it, so can we . . . the reason why you have the HMOs, like United Healthcare and Humana and Leon Medical Center, is because Medicare beneficiaries opt to trade in their Medicare beneficiary card, and the government pays from the Medicare Trust Fund[,] funds that are created there by you, Your Honor, opposing counsel and myself, all of us that have work and have worked for ten years or more in this country are contributing to the Medicare Trust Fund. This is the Trust Fund that is being depleted by Defendants  not paying when they’re supposed to pay . . . the government  established laws to make sure that it is the Defendants  [that]  make payments when they’re supposed to, so that our dollars, our Medicare dollars aren’t wasted.
Moreover, Defendant presumed that Plaintiffs are required to state its demand for reimbursement in a demand letter sent to Defendant prior to initiating a Personal Injury Protection (“PIP”) suit. However, Plaintiff was able to argue otherwise. Although PIP laws may require demand letters to be sent prior to suit, as asserted by opposing counsel Rachel M. Lamontagne, Esq., the MAOs are not so restricted to such formalities, since they are already governed by CFRs and MSP Law. Mr. Ruiz honed in on 42 CFR 411.24(f) to substantiate Plaintiff’s position and articulated,
42 CFR 411.24(f), Claims Filing Requirements. CMS insurance program or plan imposes on the beneficiary or other claimants such as a timeframe for filing a claim or a time limit for notifying the plan or programmer may recover without regard to any claims filing requirement about the need for receipt of services.
Mr. Ruiz proceeded to summarize 42 CFR 411.24(f), in which he stated, “What it basically tells you, Judge, is that’s great in the PIP world[, the use of demand letters]. But in this world that we’re in? There is no filing requirement.” As Mr. Ruiz points out, just as the government has a “direct right of action to recover from any primary payer” under 42 CFR 411.22, so does Plaintiff.
To no avail, Defendant continued to aver that Plaintiff’s reliance on MSP Law required it to demonstrate that the medical expenses it paid were “reasonable, related, and necessary” to the injuries Enrollee sustained in the accident. Ultimately, however, the Court held, “Plaintiff has stated causes of action, and is denying the Motion to Dismiss,” as Plaintiff was only following the orders of Judge Moreno and Judge King that have sent similar breach of contract claims back to state court. A “reasonable, related, and necessary” standard exists for a double damages claim under the Medicare Secondary Payer Act of § 1395y(b)(3)(A), but not a for a state law breach of contract claim.
This ruling means a primary insurance provider cannot create barriers against an MAO from stating a state law breach of contract claim in state court for reimbursement. As such, MSP Recovery continues to fight on behalf of its Clients, and will continue to use its knowledge and expertise to adequately and effectively represent its Clients, just as it has in this victory.