Health Law Daily Court won’t reconsider class action over failure to reimburse Medicare Advantage organizations
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Friday, December 13, 2019

Court won’t reconsider class action over failure to reimburse Medicare Advantage organizations

By Donielle Tigay Stutland, J.D.

The court was not convinced that software could accurately identify class members.

The Massachusetts district court denied a motion to reconsider a proposed class in connection with a lawsuit brought by an assignee of a Medicare Advantage (MA) plan under the Medicare Second Payer Act (MSPA), reiterating an earlier decision that the proposed class is untimely and fail-safe. The court noted that new software to screen settlements between insurers and plans would not address concerns regarding individualized and fact specific inquiries needed to identify members of the class (MSP Recovery Claims v. Plymouth Rock Assurance Corporation, Inc., December 12, 2019, Burroughs, A).

Background. On April 12, 2012, an individual referred to as A.C. sustained injuries in an accident. A.C. later enrolled in a MA plan administered by the Medicare Advantage organization (MAO) Fallon Community Health Plan (Fallon). A.C. received medical treatment related to the accident and Fallon paid a medical provider $1,782.02 to settle the charge.

A.C. then filed a lawsuit against the individual who caused the injuries and who was insured by Plymouth Rock Assurance Corporation, Inc. Plymouth Rock settled A.C.’s claim and reported the settlement to CMS. Plymouth Rock became the primary payer for A.C.’s medical expenses relating to the accident. Fallon assigned its rights to recover payments to MSP Recovery Series, LLC. MSP Recovery brought suit against Plymouth Rock alleging that Plymouth Rock knew it was obligated to reimburse Fallon for the $1,782.02 payment, but nonetheless failed to do so. MSP Recovery also filed a class action alleging that Plymouth Rock was the primary payer for numerous other medical expenses incurred by other MAOs that Plymouth Rock had not reimbursed.

Plymouth Rock filed a motion to dismiss and a motion to strike the class claim, and on July 18, 2019, the court denied the motion to dismiss, but did grant the motion to strike the class action claim. The court found that MSP Recovery could pursue a private right of action under the MSPA. However, the court granted the motion to strike the class allegations. MSP Recovery requested reconsideration of the class.

Proposed class. The class was originally rejected three reasons. First, the court found the class definition would include MAOs with time barred claims, and as such it was over broad. Second, the court viewed the purported class as an impermissible "fail safe" class. Third, the court noted that even if a class of MAOs with viable claims could be determined and noticed, the pleadings would not satisfy applicable rules of civil procedure because the MSP Recovery failed to show that questions of law or fact common to the class members would predominate.

MSP Recovery argued that the court should reconsider its order because it has a software program that could be used to resolve individual inquiries necessary to determine class membership, and that it could revise the class allegations to address the court’s concerns regarding the proposed "fail-safe class."

The court noted that neither argument presents extraordinary circumstances necessary to revisit its earlier decision, noting that the proposed new class is both untimely and a fail-safe class. Moreover, the decision points out that because of the nature of settlements involved in such cases, the court would still have to engage in an "individualized and fact-specific inquiry for every putative class member," despite the proposed software to identify such instances.

The case is Civil Action No. 1:18-cv-11702-ADB.

Attorneys: James L. Ferraro (The Ferraro Law Firm, P.A.) for MSP Recovery Claims, Series LLC and Series 17-04-631. John J. Cloherty, III (Pierce Davis & Perritano LLP) for Plymouth Rock Assurance Corp., Inc. and The Plymouth Rock Co., Inc.

Companies: MSP Recovery Claims, Series LLC; Plymouth Rock Assurance Corp., Inc.; The Plymouth Rock Co., Inc.

MainStory: TopStory CMSNews PartCNews MSPNews

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