Florida PIP Carriers Beware of a Potential Increase in MSP Reimbursement Demands
On August 28, 2015, the US District Court or the Southern District of Florida granted yet another motion to dismiss a MSP private cause of action for failing to demonstrate responsibility to make payment sufficient to trigger the Medicare Secondary Payer Act. While at first I found the opinion rather insignificant given that this is at least the third one this summer to rule the same way out of the same court, it then dawned on me that this is the third one this summer from the same court. So I took a closer look and noticed that all of the players are all the same.
All cases stem from Medicare Advantage benefits provided by Florida Healthcare Plus (FHCP). FHCP was forced into receivership by the State of Florida effective January 1, 2015. It is not clear whether FHCP or the state did it, but at some point during the last year or so, FHCP’s potential MSP debts were assigned to a “collection agency” (we’re just going to call it that for now). Most likely the assignment is to John H. Ruiz, a personal injury attorney in Miami specializing in servicing the Hispanic market (given his website is entirely in Spanish), or one of his many companies. A Google search of him shows that he’s been heavily involved in many business ventures, however has faced some challenging financial times over the past decade, particularly with regard to failed real estate ventures. Anyway, with regard to all of these MSP lawsuits, Mr. Ruiz or someone from his law firm, La Ley Law, is always lead attorney of record. The plaintiffs have been MSP Recovery, LLC or MSPA Claims 1, LLC, both owned by Ruiz and located at the same address as his law firm.
To date, reported opinions have involved Liberty Mutual, Progressive Insurance and IDS Property Casualty Insurance and there is one against Allstate referenced on MSP Recovery’s website because it is likely their only victory. All are filed as an MSP private cause of action for double damages under 42 USC 1395y(b)(3)(A) for reimbursement under PIP for allegedly accident-related medical expenses that the insurer failed to pay upon demand. All but one court 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, was not medically necessary, or was unreasonable” under state law [Florida PIP Statute §627.736(4)(b)].
Although the insurers have mostly prevailed to date, these cases were dismissed without prejudice so these claims are not necessarily over. Worse, expect more to be filed. Mr. Ruiz has opened 14 additional companies for the likely purposes of serving as plaintiff in additional suits. MSPA Claims II, LLC through MSPA Claims XV, LLC are all registered with the State of Florida and ready to conduct business, noted to be “any and all lawful purposes.” And win or lose, these claims will cost money to defend. The Progressive case racked up 38 docket entries in less than 4 months. But hopefully with 3 noted losses to his name, the Southern District of Florida judges will get tired of hearing the issues and one of the next defendants will move for sanctions if he continues to file suits based solely on the basis of reimbursement demands going unpaid. You know, MSP litigation is convoluted enough. We really don’t need to turn it into ambulance chasing.
MSP Recovery, LLC v. Progressive, 2015 U.S. Dist LEXIS 47784 (S.D. Fla. 4/1/15).
MSPA Claims I, LLC v. Liberty Mutual Insurance, 2015 U.S. Dist LEXIS 99188 (S.D. Fla. 7/22/15).
MSPA Claims I, LLC v. IDS Property Casualty Insurance, 2015 U.S. Dist LEXIS 114574 (S.D. Fla. 8/28/15).