Thanks to an aggressive litigation strategy pursued over the course of the last decade, Medicare Advantage Plans have become a fixture of Medicare Secondary Payer compliance. In decision after decision, Medicare Advantage Plans have been awarded the right to sue to conditional payments that it has made in Federal Court and obtain double damages in the process.
One company, the MSP Recovery Group, has attempted to capitalize on these decisions and has filed dozens of class action lawsuits in federal courts throughout the United States. Courts have not been particularly receptive to these claims and these lawsuits are often dismissed on very technical grounds. Given the volume of these lawsuits as well as the myriad issues that arise after the claims are filed, it’s perhaps not surprising that at least one judge appears to have had lost her patience.
The decision
In MSP Recovery Claims, Series LLC v. N.Y. Central Mutual Fire Ins. Judge Mae D’Agostino dismissed a class action filed in a New York federal court and the decision describes real concern with MSP Recovery’s tactics. As with a majority of MSP Recovery’s class action complaints, this one was dismissed on standing grounds.
MSP Recovery claims rely upon a complicated series of assignments from Medicare Advantage plans and then to various subsidiaries in order to allow them the opportunity sue in Federal Court. If the assignment is invalid or is not properly outlined, a court can dismiss the claim and that’s exactly what happened in MSP Recovery v. N.Y. Central Mutual Fire Ins.
But Judge D’Agostino admonished MSP Recovery and its attorneys, summarizing the thoughts of many who have been forced to respond to one of MSP Recovery’s complaints.
This case is one of dozens of putative class action suits filed in federal courts across the United States by MSP Recovery Claims, Series LLC or its affiliates. Plaintiffs’ strategy, it appears, is to throw their allegations into as many federal courts as possible and see what sticks. In each of these cases, Plaintiffs file deficient complaints, rely on courts to point out the problems, and then repeatedly amend their pleadings until they get it right. Plaintiffs’ tactics are a flagrant abuse of the legal system. A pleading is not meant to be a means by which a party can discover if they actually have a case. (Citations omitted)
It’s rare that a sitting federal judge would admonish a party so harshly, but Judge D’Agostino was not through. MSP Recovery had provided a series of affidavits and other documents in an effort to demonstrate that it had standing to sue. Judge D’Agostino was concerned with the way these documents were produced and the pattern that they represented. The court’s dismissal of MSP Recovery’s claim comes with a stern warning.
Finally, the Court has some concern about the veracity of the allegations in the Complaint…At this stage in the proceedings, the Court has accepted as true all well-pleaded facts in the Complaint, as it is required to do. However, Plaintiffs’ history of untruthfulness is well documented. Accordingly, Plaintiffs are warned not to commit fraud on the court, and Plaintiffs’ attorneys are reminded of their duty of candor to the Court.
What does it mean?
Because the dismissal was made without prejudice (as is required at this stage), MSP Recovery can always go back to the drawing board and cure the defects in its complaint. We have written quite a few articles about Medicare Advantage because of the unique way courts fashion different recovery schemes on a state-by-state basis. But the decision out of New York shows that at least one judge may have seen enough of MSP Recovery Group and its litigation tactics.
ExamWorks Clinical Solutions offers a number or programs that can not only identify whether a Medicare Advantage Plan is involved in a claim, but also identify and mitigate risk in this area. If you need help with any aspect of Medicare conditional payments – including Medicare Advantage recovery – please contact our Director of Conditional Payment Research, Lou Porrazzo, at 678-256-5085 or louis.porrazzo@examworkscompliance.com.
