MSP Recovery Claims, Series LLC v. Progressive Corporation, 1:18-cv-02273

Background

Plaintiffs (MSP Recovery entities) bring MSPA §1395y(b)(3)(A) and breach-of-contract claims as assignees of Medicare Advantage Organizations (MAOs), alleging no-fault automobile insurers (Progressive entities) failed to pay primary obligations for MAO enrollees.
Defendants moved to dismiss arguing: plaintiffs lack standing/valid assignments; some defendants are not liable primary payers; MAOs lack a private right of action under the MSPA; presentment/time-bar issues; and plaintiffs failed to identify insureds or link claimants to specific defendants.
The court evaluated statutory text, CMS regulations (42 C.F.R. §422.108(f)), and circuit authority, and concluded MAOs — and their assignees — may bring a private cause of action under §1395y(b)(3)(A).
The court held the three-year presentment provision in §1395y(b)(2)(B)(vi) is permissive/general and not a jurisdictional bar; the specific three-year limitation in (iii) controls suits by the United States and was not raised as applying to these plaintiffs.
The court found the attached assignments from FHCP and IMC sufficiently plead standing; the MAO status of Summacare and Connecticare remains a factual issue for later stages.
The court granted dismissal as to certain defendants (non-operating holding companies and entities that do not issue policies), denied dismissal in other respects, and ordered plaintiffs to file an amended complaint linking each representative claimant to a specific defendant by October 11, 2019.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether MAOs (and their assignees) have a private right of action under §1395y(b)(3)(A)	§1395y(b)(3)(A) is broadly worded and, aided by CMS regs, allows MAOs/assignees to sue	§1395y was not intended to create MAO private suits; MAO rights limited to §1395w-22 and analogous HMO precedent	Court: MAOs and assignees may maintain a private right of action under §1395y(b)(3)(A) (aligns with Avandia and Humana)
Whether failure to present claims within three years (§1395y(b)(2)(B)(vi)) bars suit	(Plaintiff) (vi) is permissive and not a condition precedent to suit by assignees	(Defendant) (vi) is an unambiguous three-year limit that bars late claims	Court: (vi) is permissive; the specific limit in (iii) governs U.S. recovery suits and plaintiffs’ claims survive dismissal on this ground
Standing — whether attached assignments from MAOs are valid and convey enforceable MSPA rights	Assignments from FHCP and IMC (and follow-on assignments) valid and broadly convey MSPA recovery rights	Assignments are mere administrative agreements, lack proper consent for reassignments, or were repudiated/assigned elsewhere	Court: FHCP and IMC assignments are sufficiently broad and valid to confer standing (evidence of receiver settlement and declaration support validity)
Failure to identify insureds / tie representative claimants to specific defendants	Plaintiffs allege MAOs incurred reimbursable costs and were not reimbursed; high-level allegations suffice	Plaintiffs must tie each representative claimant to a particular defendant/insurer	Court: Plaintiffs must amend complaint to link each representative claimant to a specific defendant; otherwise defendants will be dismissed (partial dismissal granted)
Whether MAOs must present a claim to the primary payer before making conditional payments or suing	Plaintiffs: no statutory presentment prerequisite; recovery rights are automatic	Defendants: §1395y(b)(2)(B)(iii)/(vi) require presentment before conditional payment suits	Court: No clear statutory requirement that MAOs present claims before suit; defendants’ presentment argument fails at dismissal stage

Key Cases Cited

Care Choices HMO v. Engstrom, 330 F.3d 786 (6th Cir. 2003) (distinguishes HMO rights and discusses scope of Medicare recovery provisions)
Bio–Medical Applications of Tennessee, Inc. v. Central States Southeast & Southwest Areas Health & Welfare Fund, 656 F.3d 277 (6th Cir. 2011) (explains when a primary plan is liable under the MSPA)
In re Avandia Mktg., Sales Practices & Prods. Liab. Litig., 685 F.3d 353 (3d Cir. 2012) (holds MSPA private cause of action extends to MAOs)
Michigan Spine & Brain Surgeons, PLLC v. State Farm Mut. Auto. Ins. Co., 758 F.3d 787 (6th Cir. 2014) (interprets MSPA private cause of action for providers and related standing issues)
Humana Med. Plan, Inc. v. Western Heritage Ins. Co., 832 F.3d 1229 (11th Cir. 2016) (concludes MAOs may sue under §1395y and analyzes statutory/regulatory scheme)
MSP Recovery LLC v. Allstate Ins. Co., 835 F.3d 1351 (11th Cir. 2016) (discusses assignment/standing issues and the complexity of the Medicare Act)