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Medicare Advantage Assignees’ Case Dismissed for Lack of Specificity in Complaint

As we have reported over the years, there have been increasing efforts by select organizations to seek to recovery under the Medicare Secondary Payer Act (MSPA) on behalf of Medicare Advantage Organizations. In the most recent example of these efforts, MSP Recovery Claims, Series Ltd. Liab. Co. v. Merchs. Mut. Ins. Co., No. 1:19-cv-524-JLS-JJM, 2020 U.S. Dist. LEXIS 219395 (W.D.N.Y. Nov. 20, 2020), the United States District Court for the Western District of New York considered the procedural issue of whether or not the Plaintiffs, assignees of a Medicare Advantage Organization, had standing to sue. The assignment originated from Health Insurance Plan of Greater New York (HIPGNY), which is a Medicare Advantage Organization. Plaintiffs filed a class action under the MSPA alleging that Defendants, no-fault insurers, owe them, as assignees of HIPGNY, reimbursement for secondary payments that HIPGNY made for medical treatment provided to Defendants’ policy holders. To demonstrate their entitlement for relief, Plaintiffs outlined three exemplar claims related to Medicare beneficiaries who were injured in no-fault accidents covered by Defendants. Defendants filed a motion to dismiss, arguing, among other points, that Plaintiffs lacked standing to sue because the assignment failed to identify which claims were included in the assigned recovery claims. In granting Defendants’ motion to dismiss, the Court found that Plaintiffs did not meet their burden to affirmatively demonstrate that the exemplar claims were part of the Assigned Claims. The Court noted that the assignment from HIPGNY excluded certain claims and that none of the documents provided by Plaintiffs stated the date upon which HIPGNY paid for the medical services on behalf of the beneficiaries. Without that information, the Court was unable to determine if Plaintiffs’ claims related to the exemplar beneficiaries fell within the assigned claims. Therefore, the Court granted the motion to dismiss without prejudice, which will allow Plaintiffs to refile and continue their efforts to seek recovery.

Although this claim was dismissed, it is likely not the last we will see of it. It is just another example of Advantage Organizations and their assignees doubling down on their efforts to seek recovery for claims under the MSPA. Given the increasing efforts, it is more important than ever that Medicare Advantage and Prescription Drug Plan liens are identified and addressed as part of settlement. As always, should you have questions regarding Medicare Advantage or Prescription Drug Plan recovery rights, or would like assistance with this lien research, we are here to help.

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