MSP Recovery Gets Caught in the Tangled Web of the Medicare Secondary Payer Act

In the recent case of MSPA Claims 1, LLC v. Tenet Fla., Inc. the Eleventh Circuit Court of Appeals affirmed the holding of the district court, dismissing a case for recovery of payments under the private cause of action of the Medicare Secondary Payer Act (MSP Act). While aspects of the MSP Act can be very convoluted and confusing, especially with regard to the private cause of action for recovery of primary payments, the court here begins its opinion by stating “Luckily, we do not need to venture very far into its tangled web here. The provision at issue in this case is clear, and clearly bars plaintiff’s claim.” See MSPA Claims 1, LLC v. Tenet Fla., Inc. 2019 U.S. App. LEXIS 7833.

The court here spends little time examining the makeup and history of the MSP Act; however, reminds us that while the Act has created a private cause of action that permits the government to sue when it is not properly reimbursed by a primary payer, it also provides for a private cause of action for private plaintiffs to recover double damages. The intent of this private cause of action is to encourage private parties to enforce Medicare’s right of recovery against primary payers in the courts. See generally MSPA Claims 1, LLC v. Tenet Fla., Inc. 2019 U.S. App. LEXIS 7833. Various courts have held this private cause of action to extend to Medicare Advantage Organizations (MAOs).

While a detailed rehashing of the facts of this case is not important to understanding the outcome, a brief background will help outline the issue here. In short, one of Florida Healthcare Plus’s (an MAO) enrollees was involved in a car accident and received medical care at St. Mary’s Medical Center. St. Mary’s billed both the enrollee’s primary plan- Allstate, as well as FHCP. FHCP assigned its right of recovery to the Plaintiff in this case MSPA Claims 1, LLC, through a series of assignments. St. Mary’s later reimbursed FHCP in full- $286. However, MSPA Claims brought suit against ST. Mary’s and its parent company Tenet Florida, Inc. for the delayed $286 reimbursement.

The court here determined that FHCP did suffer an injury-in-fact and that MSPA Claims has standing to bring the case and therefore the case was properly in court; however, in order to survive dismissal, the claim must still be plausible. The court reiterates that the MSP Act’s private cause of action is only available in the case in which a primary plan fails to reimburse Medicare, or in this case an MAO. Here, MSPA Claims has sued a medical service provider and not a primary plan. The court reasoned that given the fact that MSPA Claims has not sued a primary plan, its claim is not plausible on its face, and therefore the dismissal based on failure to state a claim issued by the lower court is affirmed.

This dismissal provides another instance of MSP Recovery, LLC getting caught in the tangled web that is the Medicare Secondary Payer Act. The amount in controversy here hints that the purpose of bringing this case was to attempt to gain a favorable decision and to begin to carve a path through the case law to further recovery by MAOs under this provision of the MSP Act. While the private cause of action at issue here is a dangerous one given the double damages provision, this case makes it clear that there is still work to be done in order to weave through this tangled web.