Medical providers score billion-dollar win in insurance recovery claims case
At issue was who was responsible for paying claims assigned by HMOs offering Medicare Advantage Plan benefits under the Medicare Secondary Payer Act,
A Florida lawyer said a ruling from the U.S. Court of Appeals for the Eleventh Circuit will allow his firm to collect billions of dollars from insurance companies for Medicare claims.
“I finally feel vindicated. Every single legal issue that I strategized since 2014, and with which many district judges disagreed with, has been ratified,” said John Ruiz of Coral Gables. “This is a true Cinderella story.”
Ruiz was referring to a set of rulings in favor of MSP Recovery, which he said owns billions of dollars in claims assigned by health maintenance organizations offering Medicare Advantage Plan benefits. He is working with a group of lawyers in Florida and around the country seeking reimbursements from a long list of insurance companies. In many of the cases, MSP is seeking double damages against insurance companies under the Medicare Secondary Payer Act.
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The Eleventh Circuit combined those cases and reversed lower court rulings dismissing them with prejudice.
The insurers challenged the assignments, saying they did not entitle the collector to recover. MSP argued “all of its assignments were valid,” Judge John Walker Jr. of the Second Circuit, sitting by designation, wrote for a panel that included Judges Adalberto Jordan and Jill Pryor. “We agree with Plaintiffs on all issues.”
The firm’s “primary tool for recovering funds is the Medicare Secondary Payer Act,” Walker said. “Generally speaking, the Act established that Medicare—and, as an extension of Medicare, the Medicare Advantage system—should not bear the costs of medical procedures that are already covered by a ‘primary payer,’ or other insurer such as a provider of workers’ compensation insurance or automobile insurance.”
The insurance companies are the primary payers, according to MSP Recovery’s claims.
“Under the Act, Medicare and MAOs still can, as a stopgap measure, make a ‘conditional payment’ to cover their beneficiaries’ medical bills when the primary payer ‘cannot reasonably be expected to make payment with respect to such item or service promptly,’” Walker said. Those are the payments MSP is seeking to recover. Billions of dollars worth, according to Ruiz.
Nancy Copperthwaite of Akerman in Miami argued on behalf of Ace American Insurance Co., the first named defendant, asking to affirm the dismissals. Copperthwaite could not be reached immediately for comment.
American Property Casualty Insurance Association and Personal Insurance Federation of Florida filed an amicus brief supporting the insurance companies. Their attorneys include: Michael Menapace of Wiggin & Dana in New Haven, Connecticut, Ivana Greco of Robinson & Cole in Hartford, Connecticut, and Scott Hiaasen in Miami.
MSP’s “theory of standing has been endorsed by no court. Nor should it be,” the insurance lawyers said in their amicus brief. “Subcontractors have no statutory rights or obligations under the Act, only contractual relationships with the entities that do.”
But Walker disagreed.
“Depending on how MSPRC’s relationships with its affiliated series LLCs are structured, MSPRC may have the same rights as or rights separate from the series LLCs with respect to the assignments,” Walker said. “Nothing in the record suggests that MSPRC’s relationships with its series LLCs preclude MSPRC from asserting those series LLCs’ rights.”
The panel reversed dismissals of the MSP lawsuits and remanded them for “further proceedings consistent with this opinion.”
Ruiz called it “a landmark decision for at-risk medical providers.”
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