Suit by Medicare Advantage Recovery Agent Allowed to Proceed

Plaintiffs, MSP Recovery Claims, Series LLC (MSP Recovery), asserted a putative class action suit against Defendant, AIX Specialty Insurance Company (AIX) under the Medicare Secondary Payer Act. MSP Recovery Claims v. AIX Specialty Ins. Co., 2019 U.S. Dist. LEXIS 86051 (M.D. Fla. May 22, 2019). MSP Recovery was assigned recovery rights from various Medicare Advantage Organizations (MAO) and, in two exemplar cases, MSP Recovery asserts that AIX failed to reimburse the MAO for conditional payments made on behalf of AIX’s insureds.

AIX moved to dismiss the suit under Federal Rule 12(b)(6). First, AIX argued that MSP Recovery failed to allege that the MAOs’ claims were properly assigned to them. The court, however, found that MSP Recovery did plausibly allege valid assignments. AIX next argued that MSP Recovery failed to show that the conditional payments made by the MAOs were reasonable, necessary, and related to the incidents at issue. Though the court confirmed that AIX is only required to reimburse MAOs for bills that meet those qualifications, the court held that MSP Recovery need not prove reasonableness, necessity, and relatedness at the pleading stage. AIX next argued that MSP Recovery’s claims were barred by the statute of limitations. The court found, however, that MSP Recovery’s claims were timely filed within the relevant statute of limitations. Finally, the court determined that AIX’s arguments regarding MSP Recovery’s class action certification were premature.

The court denied AIX’s motion to dismiss, allowing the case to proceed. We will continue to report new developments.