United States District Court, D. Massachusetts
MSP RECOVERY CLAIMS, SERIES LLC and SERIES 17-04-631, a series of MSP Recovery Claims, Series LLC, Plaintiffs,
PLYMOUTH ROCK ASSURANCE CORPORATION, INC. and THE PLYMOUTH ROCK COMPANY, INC., Defendants.
MEMORANDUM AND ORDER ON DEFENDANTS' MOTION TO
DISMISS AND MOTION TO STRIKE CLASS ALLEGATIONS
ALLISON D. BURROUGHS, U.S. DISTRICT JUDGE
Recovery Claims, Series LLC and Series 17-04-631 (together
“MSPRC”) bring this putative class action under
the Medicare Secondary Payer Act (“MSPA”) as the
assignee of a Medicare Advantage Organization
(“MAO”). Defendants Plymouth Rock Assurance
Corporation, Inc. and The Plymouth Rock Company, Inc.
(together “Plymouth”) offer automobile insurance
and frequently settle claims for injuries that result from
accidents involving the individuals they insure. MSPRC argues
that at least one of those settlements rendered Plymouth
liable for medical expenses that had been paid by its
assignor MAO and claims that Plymouth failed to reimburse
that MAO. MSPRC brings a single claim against Plymouth
pursuant to the MSPA's private cause of action, 42 U.S.C.
§ 1395y(b)(3)(A), for those medical expenses and for
similar expenses incurred by other MAOs who Plymouth has not
reimbursed. [ECF No. 1 (“Complaint” or
“Compl.”) ¶¶ 55-65]. Now pending before
the Court are Plymouth's motion to dismiss pursuant to
Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), [ECF
No. 8], and its motion to strike the class allegations, [ECF
No. 11]. For the reasons discussed herein, the motion to
dismiss [ECF No. 8] is DENIED, and
the motion to strike [ECF No. 11] is
following facts are drawn from the Complaint, the
well-pleaded allegations of which are taken as true for the
purposes of evaluating the motion to dismiss. See Ruivo
v. Wells Fargo Bank, N.A., 766 F.3d 87, 90 (1st Cir.
2014) (citing A.G. ex rel. Maddox v. Elsevir, Inc.,
732 F.3d 77, 80 (1st Cir. 2013). Certain details are also
culled from documents attached to the Complaint and from
documents whose authenticity is not disputed by the parties.
See Alvarez-Mauras v. Banco Popular of P.R., 919
F.3d 617, 622 (1st Cir. 2019) (citing Watterson v.
Page, 987 F.2d 1, 3 (1st Cir. 1993)).
brings this action as the assignee of MAO Fallon Community
Health Plan (“Fallon”). [ECF No. 1
(“Compl.”) ¶¶ 7, 14]. On April 12,
2012, an individual named A.C., who later enrolled in a
Medicare Advantage plan administered by Fallon, was injured
in an accident. Id. ¶ 8. Between April 16, 2012
and August 30, 2013, A.C. received numerous medical services
for accident-related injuries. Id. ¶ 9. One of
A.C.'s medical providers billed Fallon $8, 106.30 for
accident-related services, and Fallon paid $1, 782.02 to
settle that charge. Id. ¶ 10.
the accident, A.C. asserted a claim against the tortfeasor
involved in the accident, who was insured by Plymouth.
Id. ¶¶ 8, 11. Plymouth settled A.C.'s
claim against its insured, reported the settlement to the
Centers for Medicare & Medicaid Services
(“CMS”), and thereby became the primary payer for
A.C.'s accident-related medical expenses. Id.
¶ 11. MSPRC alleges that, as of the date Plymouth
notified CMS of the settlement, Plymouth knew it was
obligated to reimburse Fallon for the $1, 782.02 of
accident-related medical expenses that Fallon had paid the
medical provider for A.C. and yet nonetheless failed to
reimburse Fallon. Id.
19, 2017, Fallon assigned all rights to recover conditional
payments made for its enrollees' healthcare services to
MSP Recovery, LLC. Id. at 45. MSP Recovery, LLC then
assigned all of the rights acquired from Fallon to Series
17-04-631, a designated series of MSP Recovery Claims, Series
LLC. Id. at 53.
addition to A.C.'s accident-related medical expenses,
MSPRC asserts that Plymouth is the primary payer for numerous
other medical expenses that it will be able to identify once
it obtains and organizes data from Plymouth. See id.
¶ 51. MSPRC brings a single count to recover those
expenses from Plymouth under the MSPA's private cause of
action. Id. ¶¶ 55-65.
claim is brought on behalf of the following putative class:
All Medicare Advantage Organizations, or their assignees,
that provide benefits under Medicare Part C, in the United
States of America and its territories, which made payments
for a Medicare beneficiary's medical expenses where
(1) is the primary payer by virtue of having settled a claim
with Medicare beneficiary enrolled in a Medicare Advantage
(2) settled a dispute to pay for personal injuries with a
Medicare beneficiary enrolled in a Medicare Advantage plan;
(3) failed to reimburse Medicare Advantage Organizations, or
their assignees, the payments provided for medical items and
services related to the claims settled by Defendant.
This class definition excludes (a) Defendant, its officers,
directors, management, employees, subsidiaries, and
affiliates; and (b) any judges or justices involved in this
action and any members of their immediate families.
Id. ¶ 45.
LEGAL FRAMEWORK FOR CLAIM
Medicare consists of Parts A and B of the Medicare Act.
See 42 U.S.C. §§ 1395c - 1395w-6. These
fee-for-service provisions entitle eligible persons to have
CMS pay medical providers directly for hospital and
outpatient care. See id. Medicare Part C is the
Medicare Advantage program under which Medicare-eligible
persons may elect to have an MAO such as Fallon, rather than
CMS, provide Medicare benefits. See 42 U.S.C.
§§ 1295w-21 - 1395w-29. Medicare Part D provides
for prescription drug coverage, see 42 U.S.C.
§§ 1395w-101 - 1395w-154, and Part E contains
generally applicable definitions and exclusions, see
42 U.S.C. §§ 1395x - 1395lll.
1980, ‘Medicare paid for all medical treatment within
its scope and left private insurers merely to pick up
whatever expenses remained.'” Humana Med. Plan,
Inc. v. W. Heritage Ins. Co., 832 F.3d 1229, 1234 (11th
Cir. 2016) (quoting Bio-Med. Applications of Tenn., Inc.
v. Cent. States Se. & Sw. Areas Health & Welfare
Fund, 656 F.3d 277, 278 (6th Cir. 2011)). “In
1980, in an effort to curb the rising costs of Medicare,
Congress enacted the MSPA, which ‘inverted that system;
it made private insurers covering the same treatment the
“primary” payers and Medicare the
“secondary” payer.' Medicare benefits became
an entitlement of last resort, available only if no private
insurer was liable.” Id. (citation omitted).
Under the current Medicare system, an automobile insurance
provider or a similarly situated entity is the primary payer
relative to Medicare or an MAO whenever its policy holders
cause Medicare eligible expenses that are within its policy
limits. See 42 U.S.C. § 1395y(b)(2)(A).
1986, in an effort to “encourage private parties to
bring actions to enforce Medicare's rights” under
the MSPA and thereby reduce instances of primary payers
failing to cover costs or to reimburse CMS, Congress created
the MSPA's private cause of action. See United
Seniors Ass'n v. Philip Morris USA, 500
F.3d 19, 22 (1st Cir. 2007). The private cause of action
There is established a private cause of action for damages
(which shall be in an amount double the amount otherwise
provided) in the case of a primary plan which fails to
provide for primary payment (or appropriate reimbursement) in
accordance with paragraphs (1) and (2)(A) [of 42 U.S.C.
42 U.S.C. § 1395y(b)(3)(A). Paragraph (1) contains rules
concerning group health care plans and paragraph (2)(A) is a
general prohibition on Medicare making payments for costs
that a primary payer, such as Plymouth or a similarly
situated auto insurance provider, has paid or is expected to
pay. See Humana Med. Plan, 832 F.3d at 1234
(discussing MSPA's statutory structure). MAOs such as
Fallon did not exist when the MSPA's private cause of
action was enacted, and Congress likely therefore did not
anticipate such plans bringing actions like that brought
here. The more probable scenario then was Medicare
beneficiaries or their healthcare providers suing to recover
the costs of services that primary payers declined to cover.
1997, Congress enacted Part C of Medicare, the Medicare
Advantage program, including the provisions that allowed for
the creation of MAOs. See id. at 1235 & n.3
(citing Pub. L. No. 105-33, § 4001, 111 Stat. 251
(codified as amended at 42 U.S.C. §§ 1395w-21 -
1395ww-28)). “Congress's goal in creating the
Medicare Advantage program was to harness the power of
private sector competition to stimulate experimentation and
innovation that would ultimately create a more efficient and
less expensive Medicare system.” In re Avandia
Mktg., Sales Pracs. & Prods. Liab. Litig., 685 F.3d
353, 363 (3d Cir. 2012) (citing H.R. Rep. No. 105-217, at 585
(1997), 1997 U.S.C.C.A.N. 176, 205-06 (Conf. Rep.)). Under
the Medicare Advantage program, MAOs administer Medicare
benefits pursuant to a contract with CMS, and CMS pays the
MAOs a fixed fee per enrollee. An MAO must provide its
enrollees at least the same benefits as they would receive
under traditional Medicare. See 42 U.S.C.
§§ 1395w-22(a), 1395w-23. As of 2018, more than 20
million Americans, comprising 34 percent of Medicare
beneficiaries, were enrolled in a Medicare Advantage plan.
See Gretchen Jacobson et al., A Dozen
Facts About Medicare Advantage, Kaiser Family Foundation
(Nov. 13, 2018),
Part C includes a provision that allows MAOs to charge a
primary payer, such as an auto insurance provider that
insures a tortfeasor and thereby becomes a primary payer
pursuant to the MSPA, or an individual who has received
payments from such a primary payer.
“[o]rganization as secondary payer, ” provides:
Notwithstanding any other provision of law, a [Medicare
Advantage] organization may (in the case of the provision of
items and services to an individual under a [Medicare
Advantage] plan under circumstances in which payment under
this subchapter is made secondary pursuant to section
1395y(b)(2) of this title) charge or authorize the provider
of such services to charge, in accordance with the charges
allowed under a law, plan, or policy described in such
(A) the insurance carrier, employer, or other entity which
under such law, plan, or policy is to pay for the provision
of such services, or
(B) such individual to the extent that the individual has
been paid under such law, plan, or ...