U.S. District Court Looks To Eleventh Circuit Decision In Deciding Medicare Advantage Organization’s Claim Under The Private Cause Of Action Provision Of The MSP
March 27, 2017
In September 2016, we informed you of an Eleventh Circuit decision in which the Circuit Court found that a contractual obligation alone was enough to establish demonstrated responsibility as required in order to bring a claim under the private cause of action provision of the Medicare Secondary Payer Act (MSP) (see MSP Recovery, LLC v. Allstate Ins. Co., 2016 U.S. App. Lexis 15984). The present case, Claims v. Infinity Auto Ins. Co., No. 15-2504-civ-KING/TORRES, 2017 U.S. Dist. Ct. LEXIS 34711, was one of seven consolidated cases involved in this Eleventh Circuit ruling. The case was brought back before the U.S. District Court for the Southern District of Florida for consideration of Defendant’s (Infinity Auto Insurance Company) motion to dismiss Plaintiff’s (MSP Recovery, LLC) second amended complaint for lack of standing and failure to state a claim under the MSP.
The District Court briefly considered the lack of standing argument which turned on whether the Medicare Advantage Organization (MAO) had validly assigned its claim to Plaintiff. Looking to the Eleventh Circuit decision, the Court held that because Plaintiff’s second amended complaint alleged that the MAO assigned its claims to Plaintiff, Plaintiff had standing.
In arguing that the Plaintiff failed to state a claim under the MSP, the Defendant argued that Plaintiff failed to allege Defendant was responsible for paying enrollee’s medical bills, had knowledge of those bills, that Plaintiff demanded payment, or that Defendant knew the enrollee was a Medicare beneficiary. Again, the Court looked to the Eleventh Circuit’s decision, finding that Plaintiff’s allegations that Defendant was contractually obligated to make primary payment and failed to do so was sufficient for showing responsibility to pay. Further, the Court noted that the Plaintiff had issued a demand letter and provided a copy of that with its complaint, eliminating the arguments that the Defendant did not have knowledge, that payment was not demanded, and that Defendant was not aware enrollee was a Medicare beneficiary. The Court denied Defendant’s motion to dismiss the claim.
We will continue to monitor this case as it progresses and provide you with updates. If you have questions about Medicare Advantage Organizations and the lien research process, please let us know and we will be happy to help.