MSP Recovery Claims, Series LLC v. Hartford Fin. Servs. Grp.
| Docket Number | 3:20-CV-305 (OAW) |
| Decision Date | 22 August 2022 |
| Parties | MSP RECOVERY CLAIMS, SERIES LLC Plaintiff, v. HARTFORD FINANCIAL SERVICES GROUP, INC., ET AL, Defendants. |
| Court | U.S. District Court — District of Connecticut |
RULING ON EXEMPLAR DEFENDANTS' MOTION TO DISMISS
This case is one of hundreds of lawsuits initiated by Plaintiff in district courts throughout the country. Plaintiff seeks to enforce the Medicare Secondary Payer Act (“MSP”) to recover claims paid by three Medicare Advantage Organizations (“MAOs”): Health Insurance Plan of Greater New York (“HIP”); ConnectiCare, Inc. (“ConnectiCare”); and SummaCare, Inc. (“SummaCare”). Plaintiff alleges that Defendants have failed to reimburse the MAOs as required under the MSP. Defendants have moved to dismiss the Complaint on the grounds that Plaintiff lacks standing to bring the claims on behalf of the MAOs. Defendants also argue that even if Plaintiff had standing, the allegations of the Complaint fail to state a claim under the MSP.
For the reasons stated herein, the court finds that Plaintiff lacks standing to recover Medicare conditional payments made by HIP and ConnectiCare. The remaining claim, brought on behalf of SummaCare, is time barred under the MSP's statute of limitations. The court hereby GRANTS the Exemplar Defendants' Motion to Dismiss (ECF No. 17). The court denies as moot the No-Exemplar Defendants' Motion to Dismiss (ECF No. 16) and the pending Motion to Strike Class Allegations (ECF No 18). The Complaint hereby is DISMISSED, and the clerk is instructed to terminate the action.
In 1980, Congress passed the Medicare Secondary Payer Act (“MSP”) in an effort to reduce the rising costs of Medicare. See 42 U.S.C. § 1395y(b) et seq; Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 832 F.3d 1229, 1234 (11th Cir. 2016). The MSP amends the Social Security Act to make Medicare the “secondary” payer where a “primary plan” exists. Thus, as a secondary payer, Medicare will not pay for medical services where “payment has been made, or can reasonably be expected to be made” by a “primary plan.” 42 U.S.C. § 1395y(b)(2)(A)(i). A “primary plan” includes a group health plan, a worker's compensation plan, automobile and liability insurance policies (including self-insured plans), or no-fault insurance policies. 42 U.S.C. § 1395y(b)(2)(a)(ii).
Under the MSP, Medicare may make conditional payments to a health care provider “if a primary plan . . . has not made or cannot reasonably be expected to make payment . . . promptly.” 42 U.S.C. § 1395y(b)(2)(B)(i). If a conditional payment is made, the primary plan must reimburse Medicare. 42 U.S.C. § 1395y(b)(2)(B)(ii). Where the primary plan fails to reimburse Medicare, “the United States may . . . collect double damages against any such entity.” 42 U.S.C. § 1395y(b)(2)(B)(iii).[1] Further enforcement mechanisms under the MSP include a private cause of action which permits the recovery of double damages “in the case of a primary plan which fails to provide for primary payment.” 42 U.S.C. § 1395y(b)(3)(A).
Plaintiff brings its claim under the MSP's private cause of action. Count One, Compl., ECF No. 1 at 47. Although the Second Circuit has yet to address the issue, a growing number of courts in other jurisdictions, including the Third and Eleventh Circuits, have recognized the right of an MAO to bring suit against a primary plan under the MSP's private cause of action. In re Avandia Mktg., Sales Practices & Prods. Liab. Litig., 685 F.3d 353, 367 (3d Cir. 2012) (); Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 832 F.3d 1229, 1236 (11th Cir. 2016) (); Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 94 F.Supp.3d 1285, 1291 (S.D. Fla. 2015) (); Humana Inc. v. Medtronic Sofamor Danek USA, Inc., 133 F.Supp.3d 1068, 1078 (W.D. Tenn. 2015) (same); Humana Ins. Co. v. Paris Blank LLP, 187 F.Supp.3d 676, 680 (E.D. Va. 2016) (same); MSP Recovery Claims, Series LLC et al v. Plymouth Rock Assurance Corporation, Inc, 404 F.Supp. 470, 481 (D. Mass. 2019) (same). For purposes of this ruling, the court presumes that an MAO has standing under the MSP to bring an action against a primary payer for the recovery of conditional payments.
Plaintiff alleges that “Defendants have systematically and uniformly failed to honor their primary payer obligations” under the MSP by failing to pay for or reimburse medical expenses resulting from injuries sustained in automobile and other accidents. Compl. at ¶ 1, ECF No. 1. Plaintiff identifies Defendants as “auto or other liability insurers that provide either no-fault or med-pay insurance to its customers, including Medicare beneficiaries enrolled under Part C of the Medicare Act[.]” Id. at ¶ 2. Through its proprietary software, Plaintiff has identified seventeen (17) claims for accident-related medical expenses which were paid by ConnectiCare, HIP, or SummaCare pursuant to a Medicare Advantage plan. The Complaint refers to each of the claims by the Medicare Advantage enrollee's initials: E.H.; J.O.; T.C.; K.S.; D.R.; M.B.; M.Q.; G.P.; B.B.; J.T.; C.A.; C.R.; D.S.; G.C.; B.G.; F.M.; T.B. Id. at ¶¶ 67, 77, 87, 97, 107,117,127, 137, 147, 157, 167, 177, 187, 197, 207, 217, 227.
Plaintiff alleges that the MAOs should have been reimbursed by Defendants because, for each of the claims, a defendant was a “primary payer.” For example, on thirteen (13) claims, Plaintiff alleges that each of the enrollees carried a no-fault insurance policy which provides coverage for accident-related medical expenses under its terms. Id. at ¶¶ 69, 79, 89, 99, 109,119,129, 139, 149, 159, 169, 179, 189. Therefore, the defendant who issued the no-fault insurance policy is a “primary payer” who was obligated to reimburse the MAO for covering its Medicare Advantage enrollee's accident-related medical expenses. Id. Moreover, Plaintiff alleges that “Defendants have reported and admitted their primary payer status and responsibility for the accident-related medical expenses for medical items and/or services provided to Enrollees within ten (10) days of the accident[.]” Id. at ¶ 66. These claims are identified in the Complaint as the “Exemplar No-Fault Claims.”
For the remaining four (4) claims, Plaintiff alleges that the enrollee received a settlement from the tortfeasor's insurance carrier. Id. at ¶¶ 203, 213, 223, 233. “By entering into that settlement and releasing all claims, including medical expenses,” Plaintiff alleges that the respective insurance carrier is a “primary payer for payment and/or reimbursement” of the enrollee's accident-related medical expenses. Id. These claims are identified in the Complaint as the “Exemplar Settlement Claims.” For each of the Exemplar No-Fault Claims and Exemplar Settlement Claims (together, “Exemplar Claims”), Plaintiff alleges that the identified defendant has failed to reimburse ConnectiCare, HIP, or SummaCare for conditional payments made on behalf of their Medicare Advantage plan enrollees.
Although Plaintiff names twenty defendants in this action, only six defendants actually are identified in the Complaint as having issued a policy or settlement applicable to the claims alleged as unreimbursed: Hartford Casualty Insurance Company (“HCIC”); Sentinel Insurance Company (“Sentinel”); Trumbull Insurance Company (“Trumbull”); Hartford Fire Insurance Company (“HFIC”); Hartford Financial Services Group (“HFSG”); and Hartford Insurance Company of the Midwest (“HICM”). The parties refer to this group of Defendants, as well as three additional defendants (Hartford Insurance Company of Illinois (“HICI”), Twin City Fire Insurance Company (“Twin City”), and Property and Casualty Insurance Company of Hartford (“PCICH”)), as the “Exemplar Defendants.”[2]The remaining eleven (11) defendants are referred to by the parties as the “No-Exemplar Defendants.”
i. The Assignments
Plaintiff is not an MAO. Plaintiff is a Delaware series limited liability company. Plaintiff alleges that various MAOs, including ConnectiCare, HIP, and SummaCare, have assigned their recovery rights to Plaintiff so that it may bring suit under the MSP. Compl. at ¶ 59. Attached to Plaintiff's complaint is “Appendix 2” which contains a summary of the assignments relevant to this action, as well as the assignments themselves. Compl. at Appendix 2, Exhibit JJ (HIP Assignment), Exhibit KK (ConnectiCare assignment), Exhibit LL (SummaCare Assignment).
HIP & ConnectiCare Assignments. The HIP and ConnectiCare assignments are virtually identical. Under the HIP Assignment, HIP assigned its “Medicare Recovery Claims” to “Series 16-08-483, a designated series of MSP Recovery Claims, Series LLC” and to “its affiliated entity MSP Recovery, LLC.” Exhibit JJ, Compl, ECF No. 1-36 [hereinafter “HIP Assignment”]. Under the ConnectiCare Assignment, ConnectiCare assigned its “Medicare Recovery Claims” to “Series 15-09-157, a designated series of MSP Recovery Claims, Series LLC” and “its affiliated entity MSP Recovery, LLC.” Exhibit KK, Compl, ECF No. 1-37 [hereinafter “ConnectiCare Assignment”].
The term “Medicare Recovery Claims” is defined to include the “legal and equitable rights to seek reimbursement and/or recover payments from primary...
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