Sims v. PMA Ins. Co.
| Decision Date | 03 February 2021 |
| Docket Number | 1:20-cv-249 |
| Court | U.S. District Court — Middle District of North Carolina |
| Parties | CATHY MONROE SIMS, Plaintiff, v. PMA INSURANCE COMPANY d/b/a/ PMA INSURANCE GROUP, PMA MANAGEMENT CORP., MANUFACTURERS ALLIANCE INSURANCE COMPANY, and PMA COMPANIES, INC., Defendants. |
This is a putative class action seeking recovery for the alleged failure of private insurers to make timely conditional payments for Medicare services. Before the court is the motion of Defendants PMA Insurance Company d/b/a PMA Insurance Group, PMA Management Corp., Manufacturers Alliance Insurance Company, and PMA Companies, Inc.1 to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) or, in the alternative, Rule 12(b)(6). (Doc. 16.) Plaintiff Cathy Monroe Sims has responded in opposition. (Doc. 25.) For the reasons stated herein, Defendants' motion willbe granted and the amended complaint will be dismissed.
The facts alleged in the complaint, viewed in the light most favorable to Sims, show the following:
In 2011, Sims was employed as a certified nursing assistant by Century Care Management. (Doc. 14 ¶ 33.) On June 16, 2011, she suffered a lower back injury in the course of her work. (Id.)
On January 13, 2012, Defendants filed an N.C. Industrial Commission Form 63 that indicated that Defendants agreed to pay Sims's medical expenses connected to the work-related injury without prejudice to denying the compensability of her workers' compensation claims. (Id. ¶ 35.) On September 13, 2012, Defendants filed an N.C. Industrial Commission Form 60 in which they admitted Sims's right to compensation, including medical expenses, for her work-related injury. (Id. ¶ 37.)
On February 1, 2014, Sims became eligible to receive Medicare. (Id. ¶ 39.)
On May 15, 2015, following Defendants' failure to pay for certain treatments relating to Sims's back injury, the Full Commission of the North Carolina Industrial Commission issued an opinion and award that concluded Sims was entitled to ongoing medical care for her back injury. (Id. ¶ 42.) After evaluating the requested care, the Full Commission ordered Defendants to authorize treatment for Sims's back injury as recommended by herauthorized treating physician. (Id.; Doc. 11-6 at 14-25.)
On August 5, 2015, the Centers for Medicare and Medicaid Services ("CMS") sent the parties a Rights and Responsibilities letter that indicated Defendants' responsibility to reimburse Medicare for payments made for treatment of Sims's back injury. (See Doc. 14 ¶ 47.)
On August 11, 2015, CMS sent Defendants a conditional payment letter with an enclosed list of conditional payments. (Id. ¶ 49.) The letter stated, "Medicare has identified $4552.87 in conditional payments that we believe are associated with your claim." (Id.; Doc. 11-1.) The letter also indicated that Medicare was "still investigating this case file" and the enclosed listing of conditional payments was "not a final list and w[ould] be updated." (Doc. 11-1 at 3.) The letter prominently featured the statement, (Id. at 2.) The letter also told Defendants that they should "refrain from sending any monies to Medicare prior to . . . receipt of a demand/recovery calculation letter." (Id. at 2-3.) Although the letter asked Defendants to review the enclosed listing of conditional payments and inform Medicare if they disagreed with the inclusion of any claim, the letter did not indicate a timeframe in which Defendants were required to respond.2 (Id.)
On September 3, 2015, CMS sent Defendants another conditional payment letter. (Doc. 14 ¶ 49.) This letter was identical to the first, except the conditional payment amount was revised downward to $2, 397.39. (Id. ¶ 51; Doc. 11-2.)
Following receipt of these letters, Sims alleges, Defendants neither repaid the conditional payments nor disputed any of the claims. (Doc. 14 ¶ 51.)
On March 15, 2017, CMS sent Defendants a third conditional payment letter. (Id. ¶ 52; Doc. 11-3.) This letter stated that Medicare "identified a claim . . . for which you have primary payment responsibility and Medicare has made primary payment." (Doc. 11-3 at 2.) The letter identified $6,166.31 in conditional payments. (Id. at 3.) The letter also stated that Medicare was "still investigating the case file to obtain any other outstanding Medicare conditional payments; therefore, the enclosed listing of current conditional payments is not final." (Id.) As with the prior two letters, the letter indicated that Defendants should inform Medicare if they believed that the enclosed listing wasinaccurate, but it did not include a date by which Defendants were required to respond. (Id.)
On February 8, 2018, Defendants submitted a conditional payment dispute to CMS challenging most of the payments included in the March 15, 2017 letter. (Doc. 14 ¶ 55; Doc. 11-4.)
On March 1, 2018, CMS sent a letter indicating that it partially agreed with the dispute and adjusted the amount of conditional payments identified downward to $4,779.73. (Doc. 14 ¶ 56.) CMS issued Defendants a fourth conditional payment letter that reflected the adjusted amount. (Id.; Doc. 11-5.) In all other ways, the March 1, 2018 conditional payment letter was identical to the March 15, 2017 letter, including indicating that the enclosed listing of conditional payments was "not final" and instructing Defendants to inform Medicare if they believed the listing was inaccurate. (See Doc. 11-5 at 2-3; Doc. 11-3 at 2-3.)
On April 6, 2018, Defendants submitted another conditional payment dispute to CMS challenging the conditional payments identified in the March 1, 2018 letter. (Doc. 14 ¶ 61; Doc. 11-6.) CMS appears to have made no response to that dispute.
On March 16, 2020, Sims filed the present lawsuit against Defendants for violation of the Medicare Secondary Payer Act ("MSPA"), 42 U.S.C. § 1395 et seq., and sought certification as a class action. (Doc. 1.)
On April 15, 2020, CMS sent Defendants a fifth conditional payment letter. (Doc. 14 ¶ 64; Doc. 11-7.) This letter was identical to the third and fourth letters, except in that the conditional payment amount increased to $10,859.34. (See Doc. 11-7 at 2-3.) As with the prior letters, the letter indicated that the enclosed listing of conditional payments was "not final" and instructed Defendants to inform Medicare if they believed the listing was inaccurate. (Id. at 3.)
On April 23, 2020, Defendants submitted a conditional payment dispute to CMS challenging the conditional payments identified in the April 15, 2020 letter. (Doc. 14 ¶ 65; Doc. 11-8.) CMS responded on May 4 with a letter to Defendants indicating that it agreed with the dispute and adjusted the amount of identified conditional payments downward to zero.3 (Doc. 14 ¶ 66; Doc. 11-9.) CMS included with the letter a revised payment summary form that identified the total conditional payments owed as $0.00. (Doc. 11-9 at 4.)
On June 12, 2020, Defendants filed a motion to dismiss based on lack of subject matter jurisdiction or, in the alternative, failure to state a claim. (Doc. 10.) Sims requested and received an extension of time to reply. (Doc. 13.) On August 5, 2020, without the consent of Defendants or leave of the court, Sims filed an amended complaint.4 (Doc. 14.) The amended complaint alleges Defendants violated the MSPA and seeks certification as a class action. (Id.) Defendants again filed a motion to dismiss based on lack of subject matter jurisdiction or, in the alternative, failure to state a claim. (Doc. 16.) The motion is now fully briefed and ready for resolution. (See Docs. 18, 25, 27.)
"Federal courts are courts of limited jurisdiction and are empowered to act only in those specific instances authorized byCongress." Goldsmith v. Mayor & City Council of Balt., 845 F.2d 61, 63 (4th Cir. 1988) (citation omitted). Whether a court has subject matter jurisdiction is a "threshold matter" that a court must consider prior to addressing the merits of a claim. Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95 (1998); Sucampo Pharms., Inc. v. Astellas Pharma, Inc., 471 F.3d 544, 548 (4th Cir. 2006).
A party may contest the court's subject matter jurisdiction — including challenging timeliness and standing — pursuant to Federal Rule of Civil Procedure 12(b)(1). See, e.g., White Tail Park, Inc. v. Stroube, 413 F.3d 451, 459 (4th Cir. 2005); Miller v. Brown, 462 F.3d 312, 316 (4th Cir. 2006). When a Rule 12(b)(1) motion challenges the validity of the factual basis for subject matter jurisdiction, the burden of proving subject matter jurisdiction is on the plaintiff. Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991). However, where the challenge is not based on the accuracy of the facts alleged but rather on the complaint's failure "to allege sufficient facts to support subject matter jurisdiction, the trial court must apply a standard patterned on Rule 12(b)(6) and assume the truthfulness of the facts alleged." Kerns v. United States, 585 F.3d 187, 193 (4th Cir. 2009); see also 24th Senatorial Dist. Republican Comm. v. Alcorn, 820 F.3d 624, 629 (4th Cir. 2016) (allowing dismissal at the pleading stage under Rule 12(b)(1)"where the issue before the court is 'purely a legal question that can be readily resolved in the absence of discovery.'" (quoting Blitz v. Napolitano, 700 F.3d 733, 739 (4th Cir. 2012)). Ordinarily, subject matter jurisdiction is assessed at the time the original complaint is filed. Mollan v. Torrance, 22 U.S. 537, 539 (1824). But "when a plaintiff files a complaint in federal court and then voluntarily amends the complaint, courts look to the amended complaint to determine jurisdiction." Rockwell Int'l Corp. v. United States, 549 U.S. 457, 473-74 (2007).
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