MSP Recovery Claims, Series LLC v. N.Y. Cent. Mut. Fire Ins. Co.
| Decision Date | 05 September 2019 |
| Docket Number | 6:19-CV-00211 (MAD/TWD) |
| Parties | MSP RECOVERY CLAIMS, SERIES LLC, a Delaware limited liability company, and SERIES 16-08-483, a series of MSP Recovery Claims, Series LLC, Plaintiffs, v. NEW YORK CENTRAL MUTUAL FIRE INSURANCE COMPANY, a New York corporation, Defendant. |
| Court | U.S. District Court — Northern District of New York |
APPEARANCES:
THE FERRARO LAW FIRM
JAMES L. FERRARO, ESQ.
MICHAEL F. PERLEY, ESQ.
AMBER E. STORR, ESQ.
MEMORANDUM-DECISION AND ORDER
This case is one of dozens brought by Plaintiffs and their affiliates against insurance companies across the nation in an attempt to collect funds allegedly owed to Medicare Advantage Organizations ("MAO") under the Medicare Secondary Payer Act ("MSPA").1 See Dkt. No. 26-5at 10 n.1 (collecting cases). Plaintiffs MSP Recovery Claims, Series LLC, and Series 16-08-483 commenced this putative class action on November 7, 2018, alleging that Defendant New York Central Mutual Fire Insurance Company violated the MSPA by failing to reimburse Health Insurance Plan Of Greater New York ("HIPGNY") for conditional payments it made as an MAO on behalf of persons insured by Defendant. See Dkt. No. 1 at ¶ 1. Defendant has moved to dismiss the Complaint pursuant to 12(b)(1) for lack of subject-matter jurisdiction and 12(b)(6) for failure to state a claim. See Dkt. No. 26 at 1. For the following reasons, Defendant's motion is granted and the case is dismissed for lack of subject-matter jurisdiction.
"[T]he MSP Act requires that entities known as 'primary payers,' such as insurance companies, must reimburse Medicare (or, as in this case, a Medicare Advantage Organization ('MAO')) for payments for medical items and services that were covered by the insurance company's policy." MSP Recovery Claims, Series LLC v. QBE Holdings, Inc., No. 6:18-CV-1458, 2019 WL 1490531, *1 (M.D. Fla. Apr. 4, 2019); see also 42 U.S.C. § 1395y(b)(2)(A)(ii) (). Under the MSPA, an MAO can make a "conditional payment" for medical items and services if "a primary plan . . . has not made or cannot reasonably be expected to make payment with respect to such item or service promptly," but the primary plan must reimburse the MAO for that payment "if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item orservice." See 42 USC § 1395y(b)(2)(B). The MSPA creates a private right of action for double damages against primary payers that fail to reimburse the MAO for covered expenses. See 42 USC § 1395y(b)(3)(A).
Under New York State's "No Fault Regulations," before suing an automobile insurance company for personal injuries, the insured party must provide to its insurer (1) written notice setting forth the details of the accident, (2) written proof of health service expenses incurred, no later than 45 days after the services are rendered, and (3) written proof of work loss benefits and other necessary expenses incurred, no later than 90 days after the expenses are incurred. See 11 N.Y.C.R.R. 65-1.1(d). Additionally, the insurer can require the insured party to (1) execute a written proof of claim under oath, (2) submit to reasonable examinations under oath by any person named by the insurer, (3) provide authorization so the insurer can obtain his or her medical records, and (4) provide any other pertinent information that may assist the insurer in determining the amount due and payable. Id.
Plaintiffs have allegedly developed a software that "captures data from different sources to . . . identify a Medicare eligible person for whom primary medical payments should have been made, along with any information stored as to potential class members." See Dkt. No. 1 at ¶¶ 37, 38. Based on that information, Plaintiffs allege that Defendant, who is a no-fault insurer, has "repeatedly failed to provide primary payment, or to reimburse secondary payments made by Plaintiffs' assignors and Class Members, . . . for medical expenses resulting from injuries sustained in automobile accidents." See id. at ¶ 2.
As a representative claim to this putative class action, the Complaint refers to an individual, R.L., who was allegedly enrolled in a Medicare Advantage plan issued and administered by HIPGNY. See id. at ¶ 7. According to Plaintiffs, R.L. sustained several injuries in an accident on September 28, 2014, which required "medical items and services" as listed in the Complaint. See id. at ¶¶ 8, 9. Plaintiffs allege that HIPGNY was billed $26,853.67 for R.L.'s accident-related medical expenses, of which HIPGNY paid $5,232.23. See id. at ¶ 10. Plaintiffs claim that, as the as the "primary payer by virtue of a no-fault policy that it issued to R.L.," Defendant is liable for the total amount billed to HIPGNY, so Plaintiffs seek double the amount of $26,853.67 as damages for this particular claim. See id. at ¶¶ 10, 11; see also 42 C.F.R. § 411.31. Finally, Plaintiffs claim that Defendant reported to the Centers for Medicare and Medicaid Services ("CMS") that it was the primary payer for R.L., and "even reported information regarding the accident, the name of the reporting entity, and the type of insurance policy involved." See Dkt. No. 1 at ¶ 11. Plaintiffs claim to have attached that report as Exhibit C. See id.; Dkt. No. 1-3 at 2.
Plaintiffs allege that they have standing to bring this action on behalf of HIPGNY and the alleged class members based on several assignments. See Dkt. No. 1 at ¶ 13. First, the Complaint alleges that on March 20, 2018, HIPGNY "irrevocably assigned all rights to recover conditional payments made on behalf of its Enrollees to Series 16-08-483, a designated series of MSP Recovery Claims, Series LLC and to MSP Recovery, LLC, a Florida Limited Liability Company," (hereinafter, the "March Assignment"). See id. at ¶ 14. Then, on April 4, 2018, MSP Recovery, LLC allegedly assigned the rights in had acquired in the March Assignment to Series16-08-483 (hereinafter, the "April Assignment"). See id. at ¶ 15. Plaintiffs also allege that HIPGNY ratified and approved the April Assignment. See id.
In support of these allegations, Plaintiffs attach two agreements to the Complaint.2 See Dkt. Nos. 1-4, 1-5. The first agreement, which is dated April 4, 2018 and attached as Exhibit D1, appears to be the contract effectuating the April Assignment. See Dkt. No. 1-4 at 2-3. That agreement assigns the rights that MSP Recovery, LLC had acquired in the March Assignment to Series 16-08-483. See id. The second agreement, which is attached as Exhibit D2, irrevocably assigns to Series 16-08-483 and MSP Recovery, LLC, "any and all of [HIPGNY's] right[s], title, ownership and interest in and to all Assigned Medicare Recovery Claims" and excludes from the assignment "Assignor Retained Claims." See Dkt. No. 1-5 at 3. The agreement defines Assigned Medicare Recovery Claims as "all right[s], title, interest in and ownership of Medicare Recovery Claims . . . [excluding the Assignor Retained Claims] . . . related to Medicare Health Care Services that were rendered and paid for by Assignor" from September 29, 2011 through September 29, 2017. See id. at 2-3. The Assignor Retained Claims are defined as "Medicare Recovery Claims that can be asserted against Assignor's members, enrollees and/or contracted providers, and . . . Medicare Recovery Claims that, as of the Effective Date, have been assigned to and/or are being pursued by other recovery vendors." See id. The agreement states that the assignment is effective as of March 20, 2018, but was signed solely by Michael Palmateer, the Chief Administrative Officer of HIPGNY, on July 27, 2018. See id. at 3. In the Complaint, Plaintiffs claim that this agreement represents the March Assignment. See Dkt. No. 1 at ¶ 14.
Plaintiffs allege that, on June 19, 2018, they sent Defendant a letter informing it of the assignments and requesting "additional information related to reimbursements owed by Defendant to Plaintiffs' assignors," (hereinafter, the "Coordination of Benefits Letter"), which they attached to the Complaint as Exhibit E. See id. at ¶ 16; Dkt. No. 1-6 at 2-5. The Coordination of Benefits Letter states that, "pursuant to an approved assignment agreement . . . the Medicare Secondary Payer or at risk provider owns all reimbursement, recovery claims and subrogation rights in connection with Medicare health benefit payments made for and on behalf of the insured/claimant/beneficiary referenced above." See Dkt. No. 1-6 at 3. The names of the insured party and beneficiary are redacted from the letter. See id. The letter also asks Defendant for information about the insured party, the insurance policy, Defendant's liability limits, and any evidence about the incident, claim, or settlements. See id. at 5. Plaintiffs claim that "Defendant was required to provide the requested information, but has failed to do so." See Dkt. No. 1 at ¶ 16. Finally, Plaintiffs argue that the letter, along with Defendant's report to CMS, shows that "Defendant had actual and constructive knowledge that it was the primary payer for R.L.'s accident-related expenses." See id. at ¶ 17.
Plaintiffs initiated this action in the Southern District of New York on November 7, 2018, and the case was transferred to the Northern District of New York on February 20, 2019. See Dkt. Nos. 1, 15. On ...
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