MSP Recovery v. Travelers

On June 21, 2018, the U.S. District Court for the Southern District of Florida granted with prejudice, Travelers’ motion to dismiss MSP Recovery’s claim against it for recovery under the Medicare Secondary Payer Act (MSP). This motion was granted, and the case dismissed, based on lack of subject matter jurisdiction. In MSP Recovery Claims v. Travelers Cas. & Sur Co., the court was faced with deciding whether MSP Recovery had standing under the private cause of action provision of the MSP to bring suit against Travelers for recovery of medical payments made to Medicare beneficiaries. See generally MSP Recovery Claims v. Travelers Cas. & Sur. Co., 2018 U.S. Dist. Lexis 105078.

As a brief background, MSP Recovery, LLC is an entity whose business model is relatively simple- it sets out to obtain assignments from Medicare Advantage Organizations (MAOs) in order to attempt to sue and recover for payments made by the MAO for medical treatment of a Medicare beneficiary that allegedly should have been made by a different insurer, or primary payer. This case is similar to a multitude of cases that MSP Recovery and its subsidiaries have filed against insurers across the country, alleging recovery on behalf of an MAO under the MSP. Gordon & Rees has previously covered, and will continue to provide updates on similar cases such as Recovery v. State Farm Mut. Auto. Ins. Co –

In the case at hand, the court did not have to decide whether MSP Recovery’s arguments for recovery here were valid, as it must first determine whether MSP Recovery had standing to bring the case in the first place. MSP Recovery argues that has received an executed assignment from Health First Administrative Plans, Inc. (HFAP), and therefore should be permitted to bring this case under the MSP. While MSP Recovery may have very well received such an assignment, it has been made very clear in several cases now that HFAP is not an MAO, and therefore does not have standing to bring a cause of action against Travelers under the Medicare Secondary Payer Act. The court here agrees with and relies on the reasoning of other district courts in other similar cases, including MSP Recovery Claims, Series LLC v. Auto-Owners Insurance Co. and Recovery v. State Farm Mut. Auto. Ins. C., in holding that HFAP is in fact not an MAO, and at most, the administrative arm of another company that may have an MAO. Given that HFAP, and therefore MSP Recovery, is not an MAO it has not suffered an injury and further, lacks standing under the MSP, this case was dismissed based on lack of subject matter jurisdiction.

While this case represents an unsuccessful attempt by MSP Recovery, LLC to bring a case on behalf of a Medicare Advantage Organization under the MSP, the landscape surrounding MAO recovery rights continues to grow and change. Gordon & Rees will continue to provide the most up to date information as these cases develop.