Class Action MAO Recoveries Are Continuing

Medicare Advantage, Medicare Set-Aside Blog, MSP Litigation, MSP News on October 13, 2017
Posted by Jean S. Goldstein, JD, CMSP

On August 10, 2017, MSP Recovery Claims, LLC filed a class action complaint against Safeco Insurance Company of America in a Florida Circuit Court.  Yesterday, the Defendants filed a request for removal of the matter to Federal Court.  (MSP Recovery Claims, Series LLC v. Safeco Insurance Company of America, Case 1: 17-cv23738-UU).

As we have discussed here on our blog, MSP Recovery LLC, is a law firm that has certified two suits on behalf of Medicare Advantage Organizations (MAOs) that have claims against Non-Group Health Plans (NGHP).  MSP Recovery is championing these claims nationwide alleging that NGHPs are allowing MAOs to make payment first, giving rise to MSP Recovery’s claims for double damages.  In this most recent filing, MSP Recovery specifically asserts that the Defendant “failed to fulfill its statutorily mandated duty under the Medicare Secondary Payer provisions of the Medicare Act to reimburse Medicare Advantage Organizations for medical treatments or expenses paid by Plaintiff and the putative Class Members on behalf of Medicare beneficiaries who entered into a settlement with the Defendant.”  MSP Recovery further alleges that the Defendant “…reported some or all of the cases to CMS admitting it has primary payer responsibility…[but] failed to provide notice to Plaintiff and/Plaintiff’s assignor of its primary payment responsibility… Despite Defendant being aware of its primary payer responsibility, the Defendant has failed to pay or reimburse the secondary payer.”   Plaintiffs further assert that even if Defendant reported their responsibility for a claim, that was simply not enough; that they are obligated to pay first or reimburse the MAO. The allegations contained within this complaint further reiterate warnings we have been delivering, and concerns we have for NGHPs throughout the country.  Specifically, the complaint alleges that some or all of the cases were reported to CMS.  However, CMS and MAOs do not operate the same and do not share all reported Section 111 data.  Thus, even if a claim has been reported properly through Section 111 reporting, it does not necessarily mean that an NGHP is protected from MAO recovery down the line.  NGHPs simply cannot rely on zero conditional payment notices from CMS to ensure that the NGHP has satisfied all primary payment obligations.

It remains to be seen if this latest class action filing will be certified, as the two other Florida state classes were certified in actions also filed by MSP Recovery, LLC:

  • MSPA Claims 1, LLC v. Ocean Harbor Cas. Ins., Case No. 2015-1946 CA-01 (Fla. l 1th Jud’l Cir. Ct. Feb. 2, 2017); and
  • MSPA Claims, LLC v. IDS Property Casualty Ins. Co., Case No. 2015-27940 CA-01 (Fla. 11th Jud’l Cir. Ct. Apr. 20, 2017).

We will keep you updated as this case proceeds, along with any other MAO recovery efforts nationwide.