Another Case Filed by MSP Recovery for Double Damages Pursuant to Medicare Secondary Payer Act Dismissed for Failure to Demonstrate Payment Obligation

Liability, Medicare Advantage, Medicare Set-Aside Blog, MSP Litigation on October 5, 2015 | Posted by Joanna Wynes, JD

In MSP Recovery v. Allstate Ins. Co., 2015 U.S. Dist. LEXIS 1380834 (S.D. Fla. Sept. 22, 2015), the United States District Court for the Southern District of Florida dismissed yet another claim filed by, inter alia, John Ruiz, Esquire of La Ley Law firm on behalf of MSP Recovery against another personal injury protection (PIP) carrier, Allstate, for an alleged refusal to reimburse MSP Recovery under the Medicare Secondary Payer Act, which creates “a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).” Glover v. Ligett Group, Inc., 459 F.3d 1304, 1308 (11th Cir. 2006)(citing 42 U.S.C. § 1395y(b)(3)).

The Court reiterated that before a cause of action can exist under the Medicare Secondary Payer Act, a plaintiff must demonstrate the defendant’s responsibility to pay a patient’s medical costs, and that MSP Recovery once again put “the cart before the horse and sue[d] Allstate under the Act before establishing Allstate’s obligation to reimburse certain medical expenses.” MSP Recovery, 2015 U.S. Dist. LEXIS at *1. Further, the Court held that “until MSP Recovery demonstrates—by judgment or other agreement—Allstate’s obligation to pay Enrollee’s medical expenses, MSP Recovery cannot proceed with claims under the Medicare Secondary Payer Act,” thereby dismissing claims for declaratory relief and double damages. Id. At *7. Although not expressly stated, it appears that the Court, as they have done in the other cases filed by MSP found that the simple existence of contractual PIP coverage was insufficient to demonstrate a payment obligation, given that the insurers have the right to “assert that the claim was unrelated, not medically necessary, or was unreasonable” under state law. Florida PIP Statute §627.736(4)(b).

Although this case appears to place another nail in Mr. Ruiz’s coffin, it remains to be seen whether he will continue his relentless pursuit of double damages against PIP carriers for reimbursement for alleged accident-related medical expenses that the insurer failed to pay upon demand. Will one of the next defendants move for sanctions in an attempt to thwart further suits? Will Mr. Ruiz ultimately grow tired of spending time and money in filing these claims, which are continuously dismissed? Will similar lawsuits be filed throughout the country with different results? As always, we will continue to report on any new developments relative to Medicare Secondary Payer issues.