On Tuesday, June 28, 2016, MSP Recovery Law Firm won a major victory for Medicare Advantage Organizations (“MAO”). In MSP v. Ocean Harbor, the Honorable Judge Samantha Ruiz-Cohen denied an auto insurer’s (“Defendant”) attempt to dismiss an MAO’s (“Plaintiff”) suit. The court held that the MAO clearly established that Florida state court had jurisdiction to preside over its private cause of action for double damages pursuant to the Medicare Secondary Payer Act (“MSP Act”), 42 U.S.C. § 1395y(b)(3)(A), and various breach of contract claims. Ultimately, the Florida court ruled that an MAO can seek reimbursement from an auto insurer in state court without exhausting any administrative remedies as referenced in Humana v. Reale.
In MSP v. Ocean, an enrollee was in an accident that resulted in injuries arising from a car accident. Ultimately, MSP Recovery paid the medical expenses when the Auto Insurer was supposed to pay and failed to do so. However, Defendant illogically argued that Plaintiff failed to exhaust administrative remedies, an avenue only appropriate for Medicare enrollees.
At the June 28, 2016 hearing on this issue John H. Ruiz, Esq., Frank C. Quesada, Esq., and Gonzalo R. Dorta, Esq., maintained the position that Reale is distinguishable and inapplicable to the case at hand. They argued, and the Court agreed, that Plaintiff has a right to seek reimbursement in state court because its reimbursement rights do not “arise under the Medicare Act.”
Defendant focused on Reale; a case brought by enrollees against an MAO that addressed whether a Medicare benefit dispute between an enrollee and an MAO must be resolved through the MAO’s own administrative procedures or exclusively in federal court. As a result, the Reale court held that before an enrollee can bring suit against an MAO, it must “exhaust administrative remedies” pursuant to 42 U.S.C. § 405. Notably, the Reale court relied on Collins v. Wellcare when it held that an MAO’s claims are “not subject to the same exhaustion requirement as [an enrollee] because 42 U.S.C. § 405(h) does not require Medicare organizations to exhaust administrative remedies.”
Inapposite to Reale’s holding, the Auto Insurer unsuccessfully relied on Reale and Shalala v. Ill. Council arguing that 42 U.S.C. § 405 applied to MAOs in an effort to force the case into federal court. However, a clear and plain reading of 42 U.S.C. § 405(h) indicates that it only applies to “actions against the United States” and Reale only requires an enrollee to navigate through the given MA plan’s administrative appeals process before he/she can seek review from a federal court over Medicare benefits. Hence, the Florida state court agreed with Plaintiff’s position.
Additionally, contrary to the Auto Insurer’s assertions, MSP Recovery successfully demonstrated that the reimbursement it seeks from an auto insurer does not “arise under the Medicare Act.” It was MSP Recovery’s position that the “arise under” language used in Reale is only applicable to actions between an enrollee and the MAO, as that was Reale’s focus.
Ultimately, the Florida state court held that MSP Recovery’s private cause of action for double damages and its various breach of contract claims could stay in state court and, hence, denied the Auto Insurer’s motion to dismiss its claims.
MSP Recovery, LLC v. Ocean Harbor Casualty Ins., Case No. 2015-1946-CA-01.
Humana v. Reale, 180 So. 3d 195 (Fla. 3d DCA 2015).
Collins v. Wellcare Healthcare Plans, Inc., 73 F. Supp. 3d 653, 662 (E.D. La. 2014).
Reale, 180 So. 3d at 204 (citing Collins, 73 F. Supp. 3d at 662).
Shalala v. Ill. Council on Long Term Care, Inc., 529 U.S. 1 (2000).