New Part D Safety Policy Intends to Reduce Opioid Misuse

CMS recently announced its new Medicare Part D opioid safety policy, intended to reduce prescription opioid misuse. One aspect of the new policy is improved safety alerts at the pharmacy for Part D beneficiaries who are filling initial opioid prescriptions or receiving high doses. CMS cited the following three situations that would warrant an alert:

CMS recently announced its new Medicare Part D opioid safety policy, intended to reduce prescription opioid misuse. One aspect of the new policy is improved safety alerts at the pharmacy for Part D beneficiaries who are filling initial opioid prescriptions or receiving high doses. CMS cited the following three situations that would warrant an alert:

• Possible unsafe amounts of opioids.
• First prescription fills for opioids.
• Use of opioids and benzodiazepines at the same time.

CMS reports that if an alert is sent and if the prescription can’t be filled as written, including the full amount on the prescription, the pharmacist will give the beneficiary a notice explaining how they or their doctor can contact the plan to ask for a coverage determination.

The new policy also permits Part D plans to put drug management programs in place to help beneficiaries. One of the proposed ways that a Part D plan would accomplish this is given through the example that if a beneficiary gets opioids from multiple doctors or pharmacies, the beneficiary may be directed to receive such medications from specific providers or pharmacies to avoid overlap. However, the most notable part of this new plan is that the Part D plan will send the beneficiary a letter if it will limit their access to these medications under its drug management program. If so, the beneficiary and their doctor will have the right to appeal.

CMS acknowledges that “one size does not fit all” and that such policies do not apply to specific populations (i.e. long-term care facilities, individuals in hospice, palliative, or end-of-life care). To that end, additional material was provided for prescribers, pharmacists, and patients to clarify CMS’s interpretation of these policies.

Practitioner’s Note: While these policies are admirable in their attempt to curb the opioid issues within our country, it does beg the question as to what impact this will have in a clinical setting. With the example of the seven (7) day fill rule for new opioid users, in a majority of workers’ compensation and/or liability cases the beneficiary isn’t a beneficiary at the time of injury and the initial prescription of pain medication. As such, this policy would not apply to those individuals. Additionally, upon review of the additional materials for the providers and pharmacists, CMS specifically notes in bold “This alert is not a prescribing limit” and explains that decisions to taper or discontinue prescription opioids are individualized between patient and prescriber. How this policy may apply to the current Workers’ Compensation Medicare Set-Aside Reference Guide allocation methodology has yet to be determined.

The Gordon & Rees Medicare Compliance team will continue to follow these trends and update you as new developments arise.

Gordon Rees Scully Mansukhani Becomes First 50-State Law Firm

With 68th office opening, Gordon Rees Scully Mansukhani expands reach, services to every state.

Gordon Rees Scully Mansukhani (GRSM) has opened its 68th office, creating the world’s first 50-state law firm.

Name partner Miles Scully heralded the move as a game-changing moment in the legal services industry. “As the first and only law firm to feature offices in all fifty states, we are poised to meet our clients’ needs whenever or wherever they may arise. Our deep bench of talented lawyers coupled with our forward-thinking use of technology enables us to lead the industry in providing efficient and cost effective representation virtually anywhere in the country.”

Managing partner Dion Cominos added, “With an already established national platform, the firm was well-positioned to take the next step of providing full territorial coverage throughout the United States. This milestone represents both the culmination of our journey toward becoming a truly national firm, and the next chapter in a new era of delivering seamless and comprehensive legal services to clients on a nationwide basis.”

Since its founding 45 years ago in San Francisco, GRSM has strategically expanded across the nation, opening offices in markets critical to its clients. And as the firm’s clients have continued to consolidate, grow in size, and span additional industries, GRSM has grown to match and service their needs – initially on the west coast, and eventually throughout the country. The full list of GRSM’s offices and local contacts can be found here.

The firm’s strong growth was recognized by The American Lawyer in 2018, which named GRSM number 103 in top grossing law firms, moving up seven spots from the previous year. Law360 recognized the firm as the 40th largest in the United States in its annual rankings by domestic attorney headcount. The firm was also recognized among the top 45 for diversity on The American Lawyer Diversity Scorecard.

GRSM is a national litigation and business transactions firm with more than 900 lawyers providing full service representation to public and private companies ranging from the Fortune 500 to start-ups. Founded in 1974, GRSM is recognized among the fastest growing and largest law firms in the country.

Highlights of Resulting Media Coverage:
Bloomberg Law, April 15, 2019
Law360, April 15, 2019 (subscription may be required)

Contacts
Dion N. Cominos
Miles D. Scully

Medicare Coverage App Launches eMedicare

Yesterday CMS announced a new app to display what Medicare Part A & B covers. Per the announcement, “The new ‘What’s Covered’ app lets people with Original Medicare, caregivers and others quickly see whether Medicare covers a specific medical item or service. Consumers can now use their mobile device to more easily get accurate, consistent Original Medicare coverage information in the doctor’s office, the hospital, or anywhere else they use their mobile device.” Unsurprisingly, CMS discussed the need for this app as questions about what Medicare covers are some of the most frequent inquiries that CMS receives.

Interestingly, this app also is reported to enable beneficiaries to connect their claims data to applications and tools developed by innovative private-sector companies to help them understand, use, and share their health data.

As discussed previously, this innovation is in line with the directive from the current administration to move toward more electronic access in regards to healthcare. Specifically, this program is called eMedicare, and some of the purported goals are to allow beneficiaries to examine all available plans and see how different coverage choices will affect out-of-pocket costs.

Practitioner’s Note: This app could be extremely beneficial to beneficiaries who have had a MSA approved and are attempting to appropriately spend down their funds. Additionally, it will be interesting to see if the next version of this new app will include the option to compare Part C plans. Considering the narrative, ease of comparing different Part C plans appears to be an important part of the eMedicare program. However, this does beg the question what exactly is the “health data” they aim to share? 

The Gordon & Rees Medicare Compliance team will continue to follow these trends and update you as new developments arise.

New Conditional Payment Portal Functionality Expected in January

Long awaited improvements to the Medicare conditional payment reimbursement process may be available at the start of the new year, according to a November 19 alert from The Centers for Medicare and Medicaid Services (CMS). Back in August, CMS announced the Medicare Secondary Payment Recovery Portal (MSPRP) would offer enhanced functionality in 2019, including the ability for authorized Non-Group Health Plan (NCHP) users to self-report leads on liability, auto, no-fault or workers’ compensation cases. According to the alert, this functionality will be effective on January 7, 2019.  CMS is hosting a webinar regarding this enhancement on December 18th, 2018 at 1:00PM EST. A link to register for this webinar can be found here>>CMS 12.18.18 Webinar Registration

The ability to self-report leads will generate Medicare Conditional Payment information that authorized parties can review and/or dispute in accord with their reimbursement obligations under the Medicare Secondary Payer laws. Such enhanced portal functionality should eliminate several weeks of wait time per claim in obtaining Medicare conditional payment information.

This enhancement was initially introduced as a possible improvement for 2019 during a webinar CMS conducted on August 16. A second enhancement allowing online payment of Medicare conditional payments to the MSPRP was also referenced at that time as a possible improvement for 2019. The November 19 CMS alert makes reference to online payment.

Stay tuned to the Gordon & Rees MSPulse for a summary of the December webinar. In the meantime, please contact us should you have any questions.

CMS Low Dollar Recovery Threshold Remains $750 for 2019

There will be no change in the low dollar threshold for Medicare conditional payment reimbursement in 2019. The SMART (Strengthening Medicare And Repaying Taxpayers) Act of 2012 serves to avoid governmental waste by setting an annual amount in which the costs associated with reimbursement outweigh the benefits. The SMART Act provides that the Secretary must calculate and publish not later than November 15th a low dollar threshold amount applicable in the following year for settlements, judgments, awards or other payments in which Medicare Conditional Payment reimbursement need not be reimbursed given the costs associated with recovery. This threshold corresponds also to the $750 threshold for Medicare Mandatory Insurer Section 111 reporting requirement.

On Friday, November 15th, The Centers for Medicare and Medicaid Services released their updated Computation of Annual Recovery Thresholds for Non-Group Health Plans.  Below are the Agency’s findings:

  • The 2019 reporting threshold remains $750 for no-fault, workers’ compensation and liability cases.
  • The estimated cost to process any individual case is $297
  • The average Medicare conditional payment demand amount for settlements of $500 is $368 (74%)
  • The average Medicare conditional payment demand amount for settlements around $750 is $518 (69%)

These metrics once again demonstrate exceedingly high percentages of cost versus recovery for low dollar settlements. The SMART Act applies a common sense approach to recovery efforts, given such costs associated with reimbursement and the interest of avoiding wasteful spending of government money,. The complete notice can be found in the link here>> CMS Computation-of-Annual-Recovery-Thresholds-for-NGHP–2019.pd

Should you have any questions regarding the above or need any Medicare compliance assistance, please do not hesitate to contact Gordon & Rees Medicare Compliance Group at mstockdale@grsm.com or 412-588-2277

IDS Property Casualty Insurance Class Certification Reversed, Remanded

As previously reported, the Third District Court of Appeal for the State of Florida recently reversed and remanded the class action certification for MSPA Claims 1, LLC v. Ocean Harbor. On October 24, 2018, the same Court reversed and remanded the only other certified class action suit brought by MSPA Claims 1, LLC.

Citing Ocean Harbor specifically, the Third District Court again opined that in this case, MSPA has failed to establish that common issues predominate over individual issues. Applying the same rationale as Ocean Harbor, the Court noted “to quantify the claims of the putative class members will require a comprehensive and distinct analysis of each underlying PIP claim and automobile accident…Plainly this is one of those cases where merely proving entitlement to reimbursement from IDS for payments made by Florida Healthcare Plus on behalf of MA., in no way proves the cases of the other class members.” IDS Prop. Cas. Ins. Co. v. MSPA Claims 1, LLC, 2018 Fla. App. LEXIS 15107

The Court then went on to reverse as well on the alternate ground of standing. Harkening back to MSPA Claims 1, LLC. v United Auto. Ins. Co., 204  F. Supp. 3d 1342, 1345 (S.D. Fla. 2016), the Court ruled that the approvals of assignment did not occur until after the initial complaint had been filed. The parties in question did not assign benefits until June 1, 2016 as a part of a settlement agreement. However, MSPA filed its amended complaint on March 8, 2016, several months prior to the Receiver’s approval. As previously found, standing must exist at the inception of a case. As IDS had based its attack on standing on validity of the assignment, standing was not present[1].

As such, the Court reversed and remanded for proceedings consistent with the opinion.

It would be remiss to not point out that this was MSP Recovery’s only other certified class action suit. With its reversal and remand, the future of these class action proceedings seems dimmer and dimmer, at least in the Third District Court of Appeal for the State of Florida.

 

[1] The court does note that this case does differ from MSP Recovery LLC v. Allstate Insurance Co., 835 F. 3d 1351 (11th Circ. 2016) which similarly argued lack of standing. In that IDS argued that MSPA’s private cause of action against IDS was barred by the federal anti-assignment statue. This was rejected by the Eleventh Circuit.

MSPA Claims 1 LLC v. Infinity Auto – No Collection Without Recollection

For MSP Recovery LLC, it apparently takes more than two things to make a thing go right. Collecting fees is now out of sight.

The United States District Court for the Southern District of Florida, dismissed yet another MSP Recovery LLC subsidiary claim with prejudice. It seems this time around the Plaintiffs could not establish that MSPA Claims 1, a subsidiary of MSP Recovery, was in fact acting on behalf of the now defunct Florida Healthcare Plus, Inc. Medicare Advantage Organization, despite producing affidavits speaking to the relationship from top brass within both companies.  The assignment was allegedly first with La Ley Recovery Systems prior to MSPA Claims 1.

On October 19, 2018, The Southern District of Florida, ruled in the case of MSPA Claims 1, LLC v. Infinity Auto Ins. Co., granting summary judgment. The Court also dismissed the case with prejudice.

In the present case, the Court allowed over sixteen months of discovery to go forward with this claim. Despite this timeframe, Plaintiff relied on only two affidavits to establish standing (based upon assignment from FHCP to La Ley Recovery) for the claim: the first of the Defense’s own attorney John. H. Ruiz and the second of Susan Molina, CEO of FHCP. Putting aside that it is generally improper for a lawyer in a case to testify as to his legal opinion regarding facts in the case[1], the Court found that the testimony about conversations between Attorney Ruiz and Susan Molina was “merely Mr. Ruiz’s mental impression following conversations…” that “does not lay the necessary factual predicate for Mr. Ruiz’s lay opinion testimony.”[2]

The Court then went on to examine the Affidavit of Susan Molina, who essentially attested to not remembering specific conversations with John Ruiz and did not specifically recall approving assignment to La Ley Recovery. The Court very clearly points out what is missing from the affidavit: a positive statement that express assignment was given to La Ley Recovery.

After that analysis, the Court found in a very familiar fashion, that the Plaintiff lacked standing even despite the Plaintiff’s position that such was demonstrated via the settlement agreement between FHCP and its liquidators. As has been held in several previous MSP Recovery cases, a settlement agreement cannot retroactively establish standing after a case is filed. As no assignment was found and standing was lacking, the Court dismissed the matter with prejudice.

 

[1] Hickman v. Taylor, 329 U.S. 495, 67 S Ct. 385, 394, 91 L Ed. 451 (1947)

[2] MSAP Claims 1, LLC v. Infinity Auto Ins. Co., 2018 U.S. Dist. LEXIS 181446

CMS Issues New WCMSA Reference Guide and Section 111 NGHP User Guide

As of October 1, 2018, CMS has issued updated versions of both the WCMSA Reference Guide and the Section 111 NGHP User Guide.

 WCMSA Reference Guide Version 2.8:

The updates found in version 2.8 of the Workers’ Compensation Medicare Set-Aside Reference Guide are as follows:

– As a part of an ongoing process, CMS must discontinue use of Social Security Number-based Medicare identifiers and distribute new randomly selected Medicare identification numbers to all beneficiaries, referred to as Medicare Beneficiary Identifiers (MBIs). Accordingly, all fields formerly labeled HICN are now labeled “Medicare ID” and will accept either an individual’s HICN or MBI (if assigned)

– The link to the CDC Life Expectancy Table has been updated. This link can be found at bullet #7 of Chapter 10.3 of the Reference Guide.

– The Verifying Jurisdiction and Calculation Method for medical reviews has been updated. This information can be found in Tables 9-1 and 9-2 in Chapter 9.4.4 of the Reference Guide.

– Version 2.8 of the WCMSA Reference Guide can be found here.

NGHP Section 111 User Guide Version 5.4:

The updates found in version 5.4 of the Section 111 Non-Group Health Plan User Guide are as follows:

– To meet Section 111 requirements, a Paperwork Reduction Act (PRA) disclosure statement has been added to this guide. This disclosure can be found on page iii of the User Guide.

– The contact protocol for the Section 111 data exchange escalation process has been updated. This escalation process can be found in Sect. 8.2 of the User Guide and in short, provides the contact information for the newly appointed EDI Director.

– In order to ensure updates are applied to recovery cases appropriately, RREs are asked to submit the policy number uniformly with a consistent format. When reporting updates enter the policy number exactly as it is entered on the original submission whether blank, zeros, or a full policy number. This requirement is discussed in greater detail in Sect. 6.6.5 of the User Guide

The excluded and no-fault excluded ICD-10 diagnosis codes have been updated for 2019. These codes can be found in Table I-1 and J-1 of Chapter V of the User Guide.

– The placement of the decimal point in the excluded ICD-10 “Y codes” of table I-1 has been corrected. For example, in version 5.3 of the User Guide these codes were written as Y921.10 whereas it should be written Y92.110. These codes are now written correctly.

Each chapter of the Section 111 NGHP User Guide, version 5.4 can be found here.

Gordon & Rees remains committed to bringing you the most up to date information regarding all things Medicare Secondary Payer related. Please do not hesitate to contact us should you have any questions about the newest versions of these reference guides.

 

Ocean Harbor Class Certification Reversed, Remanded

Another blow was just dealt to MSP Recovery. On September 26, 2018, the Third District Court of Appeal for the State of Florida reversed and remanded the class action certification that had gained so much attention when it was granted last year.

This case has its genesis with MSPA Claims 1, LLC, a subsidiary of MSP Recovery acting on behalf of Florida Healthcare Plus, Inc., a now defunct Medicare Advantage Organization (MAO), and other similarly situated entities. MSPA filed a class action against Ocean Harbor Casualty Insurance Company for failure to reimburse medical bills. MSPA sought double damages via the Medicare Secondary Payer Act’s private cause of action, 42 U.S.C. § 1395Y(b)(3)(A). MSPA contended that class action was appropriate as some or all of the thirty-seven (37) MAOs in Florida might be in a similar situation. The trial court determined that common issues existed because the Plaintiffs’ right to reimbursement was “automatic,” given that a payment was made on behalf of a Medicare enrollee who was also insured by the Defendant and that such payment was not reimbursed.

In order to understand the Appeal Court’s ruling, the underlying class certification must be first examined. According to Fla. R. Civ. P. 1.220(a), the prerequisites to class certification are numerosity, commonalty, typicality and adequate representation, in additional to the satisfaction of other requirements under Fla. R. Civ. P. 1.220(b). Under 1.220(b), one of three subsections must be satisfied. The subsections are: (b)(1) prosecution of individual actions for members of the class creates a risk of inconsistent adjudications and incompatible standards of conduct; (b)(2) relief sought by the class is injunctive or declaratory in nature, rather than predominantly monetary damages, or (b)(3) that common issues of law or fact predominate over issues affecting only individual class members, and thus the class action is superior to other methods of adjudication.  The trial court certified this class based on subsection (b)(3), referencing Porsche Cars N. Am., Inc. v. Diamond, “In a (b)(3) class action, not all issues of fact and law are common, but common issues predominate over individual issues.” 140 So. 3d 1095-96 (Fla. 3d DVA 2014) (citing Fla. R.Civ. P. 1.220(b)(3)).

The Appeal Court reconsidered predominance under Fla. R. Civ. P. 1.220(b)(3), stating “the appropriateness of the class certification turns largely on whether issues common to the class will predominate.” The Appeal Court noted that this matter was an “intersection” of Florida class action law, Medicare Secondary Payer law and Florida no-fault insurance law. In exploring the obligation to reimburse Medicare under the MSP Act and also Florida no-fault insurance law, the Court aptly examined not only that a payment was made by Medicare, but also whether Ocean Harbor was required to make the payment in the first place. Through this exercise, the Appeal Court questioned the “automatic” requirement to reimburse Medicare simply due to a demonstrated responsibility to make a payment, as the MSP does not eliminate the terms and conditions of the state no-fault law. Specifically, the Court referenced 42 C.F.R Section 411.51, stating “Medicare does not pay until the Beneficiary has exhausted his or her remedies under no-fault insurance” (emphasis added). In blending the federal Medicare law with the state no-fault law, the Court first observed that the MSP’s private cause of action does not arise until a payment could reasonably be expected to be made under no-fault insurance. In turn, the Court stated that MSPA must prove that not only was a proper conditional payment made, but that Ocean Harbor was required to make the payment in the first place under the state no-fault law.

MSPA relied upon the holdings in In re: Avandia Marketing[1], and Humana Medical Plan v. Western Heritage Ins[2], two predominant circuit court cases conferring the private cause of action on the Plaintiff(s). In each of these two cases, the responsibility to make a payment was in reference to the primary plan’s pre-existing settlement of a claim relating to the tort from which the medical bills arose. The Appeal Court distinguished the facts of Ocean Harbor from these two landmark cases, in that no pre-existing settlement was being referenced as creating a responsibility for payment. Rather, the demonstrated responsibility was to be established “by other means,” thereby cancelling these cases out as precedent, bringing this matter within the MSP Recovery LLC v. Allstate[3] tutelage. In Allstate, the 11th Circuit held that even without a settlement, a demonstrated responsibility for payment could be established through proof of the primary plan’s contractual obligation to make a payment. The burden of proving this is on the Plaintiff.

According to Florida no-fault law, there are exclusions from the obligation to make payments, and also necessary procedures that if not followed, are grounds to decline payment. The Appeal Court observed that “payment under Florida no-fault law proceeds on a factually intensive bill-by-bill and case-by-case basis,” and that MSPA would be required to prove the Defendant was required to pay each particular bill. Ocean Harbor would likewise be permitted to raise defenses regarding each particular bill, thus resulting in a series of mini-trials to determine whether payment is required under Florida no-fault law. The Appeal Court stated in its conclusion “Proof that certain medical bills paid by MSPA’s alleged assignor should have been paid by Ocean Harbor as a primary payer will not establish that other medical bills paid by a different MAO should also have been paid by Ocean Harbor as a primary payer.” Accordingly, a finding of predominance was precluded, rendering the case inappropriate for class action certification. As such, the class certification was reversed and the case remanded.

Practitioner’s Note: This Court delves into interesting territory in its determination that common issues of law or fact do not predominate over issues affecting only individual class members if there is a question about whether payment of each individual bill was ever required to begin with. A similar analysis can be applied as to whether it is appropriate to file suit for Medicare conditional payment reimbursement when each individual Medicare conditional payment may not be “ripe” for reimbursement. Like Florida no-fault law, there are processes and procedures in obtaining Medicare conditional payment information, as well as for making timely reimbursement. There are defenses. There is a statute of limitations. There are reasons why payments made by Medicare may be proper payments rather than conditional payments. This decision touches on the concept of exhaustion of administrative remedies, and references the SMART Act (Strengthening Medicare and Repaying Taxpayers Act of 2012), which provides primary payers an appeal process for Medicare conditional payment matters.  Many of the various court rulings in MAO litigation focus on demonstrated responsibility for reimbursement without considering whether it is actually timely or appropriate to reimburse Medicare. If MAOs wish to assert the same rights of reimbursements as traditional Medicare Parts A and B under the MSP laws, it would stand to reason that the same processes and procedures would apply. In day-to-day practice, the mere existence of Medicare conditional payments does not necessarily trigger the obligation to reimburse.

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[1] In re: Avandia Marketing, 685 F.3d 353, (3rd Cir. 2012)

[2] Humana Medical Plan v. Western Heritage Ins, 832 F.3d 1229, (11th Cir. 2016)

[3] MSP Recovery, LLC v. Allstate Insurance Company, 853 F. 3d 1351 (11th Cir. 2016)

Busy Southern District of Florida dismisses one MSP Recovery case; allows another to proceed, for now…

The United States District Court for the Southern District of Florida has been busy lately reviewing more litigation in front of them, courtesy of MSP Recovery LLC. Recently, the Court granted a motion to dismiss with prejudice another claim brought by not MSP Recovery LLC directly, but instead a subsidiary of MSP Recovery LLC, complicating the assignment relationships and ultimately leading to a dismissal for lack of subject matter jurisdiction.

As we recently reported, MSP Recovery LLC has had two pending claims either dismissed or sent back for amendment due to issues with subject matter jurisdiction. In both of these previous cases, there were questions surrounding who the original assignor of the recovery benefits was and/or if a valid assignment of those rights was made.

On July 31, 2018, the case of MSPA Claims 1, LLC v. Liberty Mutual Fire Insurance Company was dismissed due to the same issues recounted above.

In MSPA Claims v. Liberty Mutual, the Defendant Liberty Mutual brought motion to dismiss Plaintiff’s third amended complaint for lack of subject matter jurisdiction and failure to state a claim. As similarly discussed in Recovery v. State Farm, which was issued just last month, the Court again noted that standing must be present when the lawsuit was filed and cannot amend to add new plaintiffs.

The background is similar to the most recently reported cases including MSP Recovery, and the Plaintiff’s allege that they are the assignee of FHCP, HFAP, and IMCG and representatives that were Medicare beneficiaries who were enrolled in plans managed by FHCP, HFAP, and IMCG. Plaintiff’s further alleged that the Assignors paid for the Beneficiaries’ medical expenses which should have been paid by Defendant, the primary payer.

However, the Court in MSPA Claims v. Liberty Mutual specifically notes that Plaintiffs are not MAOs, Medicare beneficiaries or direct health care providers. Rather, they have obtained claims for reimbursement via assignments from the Assignors. Notably, the documentation reportedly showing this assignment was provided with the third amendment of the complaint. As such, Defendants argued that the case should be dismissed because Plaintiff lacked standing at the time the lawsuit was filed. Ultimately, the Court agreed with the Defendant and that Plaintiff lacked standing when the suit was originally filed and thus, cannot amend in an attempt to confer standing and failed to allege facts sufficient to show that any of the alleged Assignors have standing under the MSPA. Quoting various other courts rulings on the issue of FHCP and standing, the Court based its rationale on the cases that came before the one at hand.

In summary, the facts and findings of this case are almost identical to the two previous claims that have recently been reported upon. Lack of subject matter jurisdiction seems to continue to be found by courts involving these claims.

Just three days later another, less damaging order was entered in the Southern District of Florida, this time, in favor of MSP Recovery. On August 3, 2018, the court here entered an order granting MSP Recovery’s motion for leave to file a third amended complaint and denied plaintiff’s motion to dismiss. In this advancement in the case of MSP Recovery Claims, Series LLC v. Hanover Ins. Co. we see the court permitting MSP Recovery to amend its second amended complaint in order to change the named defendant from Hanover Insurance to it subsidiary which underwrites the insurance policy that is at the heart of this case. See generally MSP Recovery Claims, Series LLC v. Hanover Ins. Co., 2018 U.S. Dist. Lexis 131211. Hanover argues that MSP Recovery’s motion should not be granted based on futility and lateness, stating that the amendment would be futile because the plaintiff did not have standing at the commencement of the lawsuit and therefore could not correct this mistake without filing a new suit, and further, that MSP Recovery has provided no legitimate reason for the delay in correcting this mistake and therefore should not be provided the opportunity for leave to amend. Id. at 3. However, the court in citing to MSP Recovery Claims, Series LLC v. United Services Automobile Assoc., states that there appears to be a legitimate disagreement as to standing, and therefore amending the complaint would not be futile, and further, that MSP Recovery has provided appropriate reasoning for the delay in naming the correct defendant in arguing that the delay is due to Hanover’s failure to properly disclose the proper underwriter of the policy in question.

Thoughts: Two specific facts are interesting about these cases. First, in MSPA Claims I, the Court specifically acknowledges that this is the Plaintiff’s third attempt at amending the Claimant to meet the requirements for standing, in almost the same fashion that we see in Hanover. Secondly, the Court also makes a point to cite several previous cases in which standing was found to be lacking and even noted that “Plaintiff’s attempts to characterize HFAP as an MAO are disingenuous.” From these statements, it can be garnered that the courts are now aware of MSP Recovery’s tactics and the issues surrounding their filings and will be taking a much closer look at these cases going forward.

Gordon & Rees will continue to monitor these cases and provide updates.  Should you have any questions regarding the above or need any Medicare compliance assistance, please do not hesitate to contact Gordon & Rees Medicare Compliance Group at mstockdale@grsm.com or 412-588-2277