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U.S. District Court Again Follows Eleventh Circuit Decision Finding that the Existence of a Contract

MSP Recovery, LLC v. Allstate Ins. Co., No. 15-21532, 2017 U.S. Dist. LEXIS 41424 (U.S. Dist. S.D. Fla., March 21, 2017) was recently back before the United States District Court for the Southern District of Florida, again on a motion to dismiss. As you may recall, this case was one of the seven consolidated cases included in the Eleventh Circuit decision finding that a contractual obligation alone could satisfy the “demonstrated responsibility” requirement of the private cause of action provision of the Medicare Secondary Payer Act (MSPA). MSP Recovery, LLC v. Allstate Ins. Co., 853 F.3d 1351 (11th Cir. 2016) [hereinafter Allstate].

Here, Defendant Allstate moved to dismiss the action on the basis that Plaintiff MSP Recovery lacked standing under the MSPA because the assignment agreement between MSP Recovery and assignee Florida Healthcare Plus (FHCP), a Medicare Advantage Organization, was void. The court noted, however, that this is the same argument Defendant presented to the Eleventh Circuit in Allstate, which failed. The Allstate court concluded that assignment of claims from a Medicare Advantage Organization to MSP Recovery were valid and gave MSP Recovery standing under the MSPA. Accordingly, the present court found that MSP Recovery had standing to sue.

The Defendant also argued that Plaintiff’s complaint should be dismissed because it did not specifically plead that Defendant was responsible for paying enrollee’s medical bills. Again relying on Allstate, the Court held that Plaintiff’s allegation of Defendant’s contractual obligation to pay was adequate to proceed with a private cause of action under the MSPA. The court refused to require Plaintiff to allege additional information at the pleading stage and held that the complaint was sufficient to survive the motion to dismiss.

As always, we will continue to monitor these decisions and update you on any new developments.

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