60 F.4th 1314
11th Cir.2023Background
- Consolidated appeals by assignees of Medicare Advantage Organizations (MSPA Claims 1, LLC and MSP Recovery Claims, Series LLC) seeking reimbursement from private insurers (Covington Specialty Insurance and United Automobile Insurance) under the Medicare Secondary Payer Act (MSPA).
- Covington case: Covington’s no-fault and liability policies contained a one-year claims-filing deadline; MSPA (assignee of Florida Healthcare Plus) first notified Covington in 2015; Covington argued late reporting and settled directly with the beneficiary (P.M.) in 2016; district court granted summary judgment for Covington.
- MSPA attempted at summary judgment to rely on Covington’s settlement as establishing primary-payer liability but never amended its complaint to plead the settlement-based theory; the district court rejected that late theory as forfeited.
- United Auto case: MSP Recovery (assignee of Avmed) identified unreimbursed conditional payments and sued United Auto; district court granted summary judgment for United Auto because MSP Recovery failed to send the Florida statutorily required pre-suit demand under Fla. Stat. § 627.736(10)(a).
- Both assignees argued that the MSPA preempted the insurers’ procedural requirements (Covington’s contractual deadline and Florida’s pre-suit demand); the Eleventh Circuit affirmed both judgments, holding neither procedural requirement is preempted.
- Judge Rosenbaum concurred in part but dissented as to United Auto, arguing Florida’s pre-suit demand is conflict-preempted because it frustrates the MSPA’s purpose of shifting reimbursement obligations to private insurers.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the MSPA preempts Covington’s one-year contractual claims-filing deadline | MSPA: the MSPA’s recovery rule controls and preempts shorter insurer deadlines (argued broadly that no shorter deadline should defeat MSPA claims) | Covington: contract defense valid; policy deadline applies to bar claims | Held: Not preempted — §1395y(b)(2)(B)(vi) addresses U.S. recovery and employer group plans, does not preempt Covington’s no-fault/liability policy deadline |
| Whether MSPA could rely on Covington’s settlement (raised at summary judgment) to establish Covington’s primary-payer liability | MSPA: settlement demonstrates responsibility for payment and was an alternative basis for liability | Covington: settlement theory was not pled; plaintiff forfeited the new theory by not amending the complaint | Held: Forfeited — MSPA failed to plead settlement theory and could not raise it for the first time at summary judgment |
| Whether the MSPA preempts Florida’s pre-suit demand requirement (Fla. Stat. §627.736(10)(a)) | MSP: Florida’s demand requirement is preempted because MSPA imposes a low federal threshold (constructive knowledge) and federal scheme displaces state procedural demands | United Auto: Florida’s notice-and-cure requirement is a traditional state procedural/regulatory rule and does not conflict with federal objectives | Held: Not preempted — no express or conflict preemption; Florida’s procedural demand and 30‑day cure do not meaningfully obstruct MSPA’s reimbursement scheme (but one judge dissented) |
Key Cases Cited
- MSPA Claims 1, LLC v. Tenet Fla., Inc., 918 F.3d 1312 (11th Cir. 2019) (MAOs must rely on private cause of action for reimbursement; conditional payment/recovery framework)
- Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 832 F.3d 1229 (11th Cir. 2016) (primary-payer allocation and constructive-knowledge principles)
- MSP Recovery, LLC v. Allstate Ins. Co., 835 F.3d 1351 (11th Cir. 2016) (alleged primary payers may assert valid contract defenses)
- MSP Recovery Claims, Series LLC v. ACE Am. Ins. Co., 974 F.3d 1305 (11th Cir. 2020) (addressing defendants’ arguments about recovery demand letters and the form of notice)
- MSPA Claims 1, LLC v. Kingsway Amigo Ins. Co., 950 F.3d 764 (11th Cir. 2020) (limits on MSPA private cause of action and requirements to demonstrate primary-payer responsibility)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard; legal conclusions not entitled to assumption of truth)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)