Florida Federal Court Again Allows Assignee to Bring MSP PCA, and Again Dismisses it Due to Lack of Facts Establishing Insurer’s Responsibility to Pay Medical Expenses

Rafael Gonzalez, Esq.
Vice President, Strategic Solutions

073115_1834_FloridaFede1.jpgOn October 6, 2015, the United States District Court for the Southern District of Florida published its opinion on MSP Recovery, LLC v. Allstate Insurance Company, finding that Plaintiff has again failed to adequately allege the minimal facts to support its claims. Thus, the Court concludes that Defendant’s motion to dismiss is granted with leave for Plaintiff to replead some of its counts. The Court warns Plaintiff that this will be its last chance to plead its case. If Plaintiff fails to adequately allege its claims in a Third Amended Complaint, the Court will dismiss with prejudice.

This is yet another one of those cases where Florida Healthcare Plus (FHCP), a health maintenance organization (HMO) and a participant provider in the Medicare Advantage Plan (MAP) program, provided Medicare Advantage coverage to Enrollee. As in the other similar 5 cases published by this same court in 2015, FHCP assigned all of its rights with respect to claims for the recovery of amounts owed to FHCP to La Ley Recovery. La Ley Recovery, in turn, assigned all the recovery and reimbursement rights it received from FHCP to MSP Recovery LLC (Plaintiff).

On June 19, 2014, Enrollee was a passenger in a car which was struck from behind. Enrollee suffered bodily injury, received medical care for such injuries and incurred medical bills. Florida FHCP, as Enrollee’s MAP, paid Enrollee’s medical expenses. Allstate (Defendant) was Enrollee’s PIP and no-fault automobile insurer and, therefore, should have been the primary payer for the medical expenses arising from the automobile accident. However, FHCP and Plaintiff were unaware Allstate was Enrollee’s PIP and no-fault auto insurer. After learning about Defendant, Plaintiff sent several notices demanding reimbursement for the medical services paid for by FHCP, totaling $2,869.00, which Defendant refused to pay.

As a result of such denial, Plaintiff filed a Complaint alleging among other claims, a private cause of action under the MSPA for double damages. Defendant subsequently filed a Motion to Dismiss Plaintiff’s Complaint, which the Court granted, giving Plaintiff leave to amend its claim under the MSPA. The Court specifically noted that, while a contractual obligation may be sufficient to demonstrate Defendant’s responsibility for payment of the medical bills, Plaintiff had failed to adequately allege Defendant’s contractual responsibility because Plaintiff had not alleged the medical bills for which it sought repayment were reasonable, necessary, and related to the automobile accident. Plaintiff therefore filed its Second Amended Complaint.

The Court indicates that when a complaint is challenged under Rule 12(b)(6), a court will presume that all well-pleaded allegations are true and view the pleadings in the light most favorable to the plaintiff. However, once a court “identifies pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth,” it must determine whether the well-pled facts “state a claim to relief that is plausible on its face.” A complaint can only survive a 12(b)(6) motion to dismiss if it contains factual allegations that are “enough to raise a right to relief above the speculative level, on the assumption that all the factual allegations in the complaint are true.” However, a well-pled complaint survives a motion to dismiss “even if it strikes a savvy judge that actual proof of these facts is improbable, and “that a recovery is very remote and unlikely.”

Defendant again moved to dismiss Plaintiff’s MSPA claim on several grounds. The first, that Plaintiff must first obtain a judgment or settlement agreement to demonstrate Defendant’s responsibility for payment, was previously raised by Defendant and rejected by this Court. Despite the recent decisions by Judges King and Scola, which Defendant brought to the Court’s attention in two Notices of Supplemental Authority, the Court sees no reason to revisit these arguments and its prior holding, which rejected this argument.

Defendant next argues that Plaintiff has failed to adequately plead its MSPA claim because it has not pled any facts to establish Defendant’s responsibility to pay. Defendant argues that Plaintiff does nothing more than make conclusory statements that the medical bills it paid were reasonable, necessary, and related to the auto accident. Defendant argues that Plaintiff has not pled any underlying facts, no allegations regarding what type of injuries Plaintiff suffered in the accident, what injuries were treated, what services the medical bills paid by FHCP were for, the amounts of the individual bills that were paid, or whether the amounts of the bills were reasonable. Defendant urges that while Plaintiff alleges that Enrollee’s medical providers determined that the injuries sustained by Enrollee were directly the result of the use of the motor vehicle, it is not clear that the medical services actually paid for by FHCP were for these same injuries. Therefore Defendant argues Plaintiff’s conclusory allegations, coupled with its allegation that Defendant paid some medical bills for Enrollee that resulted from the auto accident, are simply a formulaic recitation of the elements of its claim and are, thus, insufficient to meet the pleading standard. Thus, Defendant argues Plaintiff has not adequately “demonstrated” Defendant’s responsibility to pay the bills based on its contractual obligations.

The Court agrees and grants Defendant’s motion to dismiss the MSPA claim with leave to replead for Plaintiff to allege facts supporting its conclusion that the payments made to Enrollee’s medical providers were reasonable, necessary, and related to the auto accident.

Regarding Plaintiff’s breach of contract claim, the Court indicates that Plaintiff must also establish that the assignor was a third-party beneficiary of the contract that Plaintiff now seeks to enforce. While Plaintiff has alleged that Enrollee’s medical providers are intended third-party beneficiaries of the no-fault insurance contract, the Court finds Plaintiff has alleged no facts to support this conclusory allegation. Since Plaintiff has not provided the no-fault policy, quoted its language, or otherwise pled the content of the policy that would establish that the medical providers were intended third-party beneficiaries of the policy, the Court concludes Plaintiff has not adequately pled a breach of contract claim based on the assignment of rights from the medical providers to FHCP because Plaintiff has not adequately pled that the providers were third-party beneficiaries of Enrollee’s no-fault insurance contract with Defendant. Accordingly, the Court dismisses this claim with leave to replead.

Defendant also seeks to dismiss Plaintiff’s allegations regarding “bad faith” and Plaintiff’s request for relief that seeks a determination that Defendant acted in bad faith. Despite these allegations and the request for a finding that Defendant acted in bad faith, Plaintiff did not actually alleged a claim for bad faith. Defendant argues dismissal would be appropriate because the allegations are immaterial and impertinent given the absence of a bad faith claim. The Court agrees. The Court indicates that because Plaintiff has not pled a claim for bad faith and the allegations are irrelevant to the claims pled by Plaintiff, it dismisses the bad faith allegations with prejudice, as is Plaintiff’s request for relief asking for a declaration that Defendant acted in bad faith.

As we have been doing throughout 2015, Helios Settlement Solutions will continue to report on the evolution of this issue and the case law deciding whether MAP assignees have the authority to bring an MSP private cause of action for double damages when primary payers have denied payment or reimbursement of medical bills paid by the MAP and what evidence and facts are needed in order to show and plead such primary payers’ responsibility. Stay tuned!

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