MSP Recovery Claims, Series 44, LLC v. Quincy Mut. Fire Ins. Co.
| Docket Number | 22-cv-11271-DJC |
| Decision Date | 21 June 2023 |
| Parties | MSP RECOVERY CLAIMS, SERIES 44, LLC, Plaintiff, v. QUINCY MUTUAL FIRE INSURANCE COMPANY and QUINCY MUTUAL GROUP, INC., Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Plaintiff MSP Recovery Claims, Series 44, LLC (“MSPRC 44”) has filed this lawsuit pursuant to the Medicare Secondary Payer Act (“MSPA” or “the Act”) as the assignee of a Medicare Advantage Organization (“MAO”), Blue Cross Blue Shield of Rhode Island (“BCBSRI”). Defendants Quincy Mutual Fire Insurance Company and Quincy Mutual Group, Inc. (collectively, “Defendants”) are insurers that issue liability and no-fault policies and often settle claims for injuries that result from accidents involving their insureds. In connection with some of those settlements, MSPRC 44 alleges that Defendants failed to reimburse BCBSRI for medical expenses it paid and for which Defendants were responsible. Accordingly, MSPRC 44 asserts a claim pursuant to the MSPA's private cause of action, 42 U.S.C. § 1395y(b)(3)(A), for those medical expenses (Count I) and a claim for declaratory relief (Count II). D. 1. For the following reasons, the Court ALLOWS Defendants' motion for judgment on the pleadings. D. 29.
Rule 12(c) allows a party to move for judgment on the pleadings at any time “[a]fter the pleadings are closed-but early enough not to delay trial.” Fed.R.Civ.P. 12(c). A Rule 12(c) motion for judgment on the pleadings is “ordinarily accorded much the same treatment” as a Rule 12(b)(6) motion. Aponte-Torres v. Univ. of P.R., 445 F.3d 50, 54 (1st Cir. 2006) (citing cases). To survive a motion for judgment on the pleadings, therefore, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Because a motion for judgment on the pleadings “calls for an assessment of the merits of the case at an embryonic stage,” the Court “view[s] the facts contained in the pleadings in the light most favorable to the nonmovant and draw[s] all reasonable inferences therefrom'” in their favor. Perez-Acevedo v. Rivero-Cubano, 520 F.3d 26, 29 (1st Cir. 2008) (citation and internal quotation marks omitted).
On a Rule 12(c) motion, unlike a Rule 12(b) motion, the Court considers the pleadings, including the answer. See Aponte-Torres, 445 F.3d at 54-55 (citation omitted). In addition, “[t]he court may supplement the facts contained in the pleadings by considering documents fairly incorporated therein and facts susceptible to judicial notice.” R.G. Fin. Corp. v. Vergara-Nunez, 446 F.3d 178, 182 (1st Cir. 2006) (citation omitted).
Because the allegations here relate to several aspects of the MSPA, the Court begins with an overview of the Act.
Established in 1965, Medicare, which consists of Parts A and B, is administered by the Centers for Medicare & Medicaid Service (“CMS”). See 42 U.S.C. §§ 1395c-1395w-6. Parts A and B are fee-for-service provisions, which “entitle eligible persons to have [the] CMS pay medical providers directly for hospital and outpatient care.” MSP Recovery Claims, Series LLC v. Plymouth Rock Assurance Corp., 404 F.Supp.3d 470, 475 (D. Mass. 2019) (citing 42 U.S.C. §§ 1395c-1395w-6).
Under Parts A and B, “Medicare often acted as a primary insurer; that is, Medicare paid for enrollees' medical expenses, even when an enrollee carried other insurance that covered the same costs, or when a third party had an obligation to pay for them.” MSP Recovery, LLC v. Allstate Ins. Co., 835 F.3d 1351, 1354-55 (11th Cir. 2016). In response, Congress enacted the MSPA in 1980 to reduce the costs of Medicare. United Seniors Ass'n v. Philip Morris USA, 500 F.3d 19, 21 (1st Cir. 2007) (citing cases). To do so, the MSPA Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 832 F.3d 1229, 1234 (11th Cir. 2016) (quoting Bio-Med. Applications of Tenn., Inc. v. Cent. States Se. & Sw. Areas Health & Welfare Fund, 656 F.3d 277, 278 (6th Cir. 2011)). Accordingly, “[u]nder the current Medicare system, an automobile insurance provider or a similarly situated entity is the primary payer relative to Medicare or a[] MAO whenever its policy holders cause Medicare eligible expenses that are within its policy limits.” Plymouth Rock Assurance Corp., 404 F.Supp.3d at 475-76 (citing 42 U.S.C. § 1395y(b)(2)(A)); see 42 U.S.C. § 1395y(b)(2)(A) (defining “primary plan” broadly as “an automobile or liability insurance policy or plan (including a self-insured plan) or no fault insurance” which has a primary responsibility to pay).
The MSPA prohibits Medicare from paying a beneficiary's medical expenses if “payment has been made or can reasonably be expected to be made under . . . an automobile or liability insurance policy or plan (including a self-insured plan) or under no fault insurance.” 42 U.S.C. § 1395y(b)(2)(A)(ii). Nevertheless, where a primary plan “has not made or cannot reasonably be expected to make payment with respect to [the] item or service promptly,” Medicare may make the initial payment, “conditioned on reimbursement” from the primary plan. Id. § 1395y(b)(2)(B)(i). Reimbursement for these conditional payments is mandatory “if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service.” Id. § 1395y(b)(2)(B)(ii). Responsibility for payment may be shown in the following ways:
“In 1986, in an effort to ‘encourage private parties to bring actions to enforce Medicare's rights' under the MSPA and thereby reduce instances of primary payers failing to cover costs or to reimburse [the] CMS, Congress created the MSPA's private cause of action.” Plymouth Rock Assurance Corp., 404 F.Supp.3d at 476 (quoting United Seniors Ass'n, 500 F.3d at 22). This private cause of action provides “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) [as otherwise provided in the Act].” 42 U.S.C. § 1395y(b)(3)(A).
In 1997, Congress created Part C, which is the Medicare Advantage Program, under which Medicare-eligible beneficiaries may elect to receive their Medicare benefits through private insurers known as MAOs, rather than the CMS. 42 U.S.C. §§ 1395w-21-1395w-29; see Plymouth Rock Assurance Corp., 404 F.Supp.3d at 476. Under Part C, Medicare pays MAOs, like BCBSRI, an advanced, fixed amount per month for each beneficiary covered under the MAO's plan to provide the same original Medicare benefits. 42 C.F.R. § 422.304(a). “Congress's goal in creating the Medicare Advantage program was to harness the power of private sector competition to stimulate experimentation and innovation that would ultimately create a more efficient and less expensive Medicare system.” In re Avandia Mktg., Sales Pracs. & Prods. Liab. Litig., 685 F.3d 353, 363 (3d Cir. 2012) (citing H.R. Rep. No. 105-217, at 585 (1997) (Conf. Rep.)).
Unless otherwise indicated, the following summary is based upon the facts as alleged in the complaint. D. 1.
MSPRC 44 and related entities are “collection agencies that specialize in recovering funds on behalf of various actors in the Medicare Advantage system.” MSP Recovery Claims, Series LLC v. ACE Am. Ins. Co., 974 F.3d 1305, 1308 (11th Cir. 2020); see D. 1 ¶¶ 9-10. Pursuant to the MSPA's private right of action, MSPRC 44 filed this lawsuit as BCBSRI's assignee because Defendants are allegedly primary plans that failed to reimburse BCBSRI for payments it made. D. 1 ¶¶ 4, 65.
MSPRC 44 uncovered Defendants' alleged MSPA noncompliance “through data analytics, which requires cross-referencing unreimbursed, accident-related conditional payments in [BCBSRI's] claims data with instances where auto insurers reported to [the] CMS under Section 111 that they were responsible, which made them primary payers under the MSP Act as a matter of law.” Id. ¶ 21. CMS reports, however, are not directly available to MSPRC 44. Id. To access those reports, MSPRC 44 subscribes to a service known as “MyAbility,” which contracts with the CMS and provides subscribers with information that primary payers report to the CMS. Id. ¶¶ 15, 21. Nevertheless, MSPRC 44 does not possess claims information for each instance Defendants allegedly failed to reimburse BCBSRI. Id. ¶¶ 22-23. Accordingly, MSPRC 44 proffers and relies upon two representative examples, M.H. and J.O., to illustrate Defendants' failure to fulfill their statutory obligations and to demonstrate Article III standing, but states that the full extent of its damages cannot be known until discovery. Id. ¶¶ 23-24, 27-29.
On August 13, 2015, an individual named M.H., who was enrolled in a Medicare Advantage Plan issued by BCBSRI, was injured in an accident and sustained injuries that required medical items and services. Id. ¶¶ 30-31. These services were rendered on or about August 13, 2015 and August 21, 2015, and the medical providers charged BCBSRI $6,860.00 of which it paid $877.09. Id. ¶ 33. After the accident, M.H. initiated a claim against Defendants'...
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