404 F.Supp.3d 470
D. Mass.2019Background
- MSP Recovery Claims, Series LLC (MSPRC), as assignee of MAO Fallon Community Health Plan (Fallon), sued Plymouth Rock entities under the Medicare Secondary Payer Act (MSPA), 42 U.S.C. § 1395y(b)(3)(A), seeking reimbursement of conditional payments Fallon made for a beneficiary A.C.’s accident-related medical care ($1,782.02) after Plymouth settled with A.C.
- Fallon executed an irrevocable assignment of its claims to MSP Recovery, LLC, which assigned the rights to Series 17-04-631 (plaintiffs). MSPRC alleges a complete chain of assignments and standing as assignee.
- Plymouth moved to dismiss for lack of subject-matter jurisdiction (challenging assignment/standing and availability of the MSPA private cause of action to MAOs/assignees) and for failure to state a claim (arguing lack of demonstrated responsibility, notice noncompliance, statute of limitations, and that one defendant is not an insurer).
- The court treated well-pled factual allegations as true, found the assignment facially plausible and that an MAO (and thus an assignee) can assert a claim under § 1395y(b)(3)(A), and denied the motion to dismiss.
- The court granted Plymouth’s motion to strike the class allegations because the class definition was overbroad (no temporal limitation), constituted an impermissible "fail-safe" class, and because common issues would not predominate under Rule 23(b)(3).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing/Assignment validity | MSPRC: Fallon irrevocably assigned its recovery rights; MSPRC is assignee and has Article III standing | Plymouth: assignment facially invalid/contingent fee or not conveyed to plaintiffs | Court: assignment facially plausible; plaintiffs have standing; motion denied |
| Whether MAO/assignee may sue under MSPA § 1395y(b)(3)(A) | MSPRC: MAOs (and assignees) are entitled to the private cause of action to obtain double damages | Plymouth: private cause of action was not intended for MAOs/assignees; First Circuit dicta suggests beneficiaries only | Court: adopts Third Circuit logic (In re Avandia); MAOs may sue under § 1395y(b)(3)(A); assignees can pursue assigned claims |
| Demonstrated responsibility / notice compliance | MSPRC: alleges Plymouth settled with beneficiary, became primary payer, knew it owed reimbursement but failed to pay | Plymouth: responsibility must be "demonstrated" (e.g., judgment); plaintiffs failed to allege required CMS/recovery-demand procedures or clear amount | Court: accepts well-pled settlement allegation as sufficient at pleading stage; notice and precise amounts are discovery issues; claim survives now |
| Class certification / class pleading | MSPRC: seeks nationwide class of MAOs/assignees similarly unreimbursed by Plymouth | Plymouth: class is overbroad, time-barred members included, is a fail-safe class, and individual issues predominate | Court: strikes class allegations — class overly broad (no temporal limit), fail-safe, and Rule 23(b)(3) predominance fails |
Key Cases Cited
- Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 832 F.3d 1229 (11th Cir.) (supports MAO recovery under MSPA)
- In re Avandia Mktg., Sales Pracs. & Prods. Liab. Litig., 685 F.3d 353 (3d Cir.) (held MAOs may sue under § 1395y(b)(3)(A); persuasive reasoning adopted)
- United Seniors Ass’n v. Philip Morris USA, 500 F.3d 19 (1st Cir.) (discusses nature of MSPA private cause of action)
- Glover v. Liggett Grp., 459 F.3d 1304 (11th Cir.) (discusses requirement that primary payer responsibility be demonstrated)
- MSP Recovery, LLC v. Allstate Ins. Co., 835 F.3d 1351 (11th Cir.) (addresses demonstrated-responsibility issue and scope of assignments)
- Jefferson Cty. Pharm. Ass’n, Inc. v. Abbott Labs., 460 U.S. 150 (U.S.) (assignability of claims with treble damages upheld)
- Sprint Commc’ns Co. v. APCC Servs., Inc., 554 U.S. 269 (U.S.) (assignees have standing to sue)