261 So. 3d 637
Fla. Dist. Ct. App.2018Background
- MSPA Claims 1, LLC sued Ocean Harbor Casualty Insurance Company as assignee of Florida Healthcare Plus (an MAO), seeking double damages under the Medicare Secondary Payer Act (MSPA) for medical bills Medicare paid that MSPA contends Ocean Harbor (a Florida no-fault insurer) should have paid.
- The trial court certified a (b)(3) class of Florida MAOs, accepting MSPA's position that liability is "automatic" once an MAO pays: proof requires only (1) MAO payment, (2) insured had Ocean Harbor coverage, and (3) Ocean Harbor failed to reimburse.
- Ocean Harbor argued MSPA must prove Ocean Harbor’s obligation under Florida no-fault (PIP) law for each bill, which would require individualized, bill-by-bill hearings under § 627.736, Fla. Stat., defeating predominance.
- The trial court accepted MSPA’s methodology (including an algorithm and statistical models) and certified the class; Ocean Harbor appealed asserting predominance and other defects.
- The appellate court examined whether proof required by § 1395y(b) displaces state no-fault law or whether MSPA must prove under Florida law that each disputed bill was payable by the primary plan.
- The court concluded MSPA must prove Ocean Harbor’s obligations under Florida no-fault law for each claimed reimbursement and that resolving those issues would devolve into mini-trials, so class-wide predominance was not satisfied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MAO reimbursement rights under §1395y(b)(3)(A) are "automatic" and independent of state no-fault law | MSPA: Rights are automatic once MAO/Medicare makes payment; class proof needs only MAO payment, insured coverage, and insurer nonpayment | Ocean Harbor: MSPA must prove under Florida no-fault law that Ocean Harbor was contractually/statutorily obligated to pay each bill; no automatic right | Held: Not automatic — MSPA must prove each bill was payable under Florida no-fault law before recovery under §1395y(b) |
| Whether Medicare/Sec. 1395y preempts Florida PIP substantive requirements | MSPA: Federal MSPA preempts state PIP rules that would defeat class claims | Ocean Harbor: MSPA does not preempt state substantive claims conditions (relatedness, reasonableness, exclusions, filing requirements) | Held: MSPA does not broadly preempt state no-fault law; state substantive rules remain applicable |
| Whether CMS regulation 42 C.F.R. § 411.24(f) overrides state claim-filing defenses | MSPA: §411.24(f) allows Medicare to recover regardless of state filing requirements | Ocean Harbor: Even if arguable, §411.24(f) is invalid and cannot displace state substantive rules | Held: §411.24(f) is invalid under controlling precedent and does not excuse substantive state-law defenses |
| Whether class certification satisfies predominance when liability requires individualized PIP determinations | MSPA: Common issues predominate; algorithm/statistics can identify Ocean Harbor responsibility class-wide | Ocean Harbor: Liability requires individualized PIP proof and defenses, producing mini-trials and defeating predominance | Held: Individualized inquiries predominate; class certification (as to issues conflicting with opinion) reversed |
Key Cases Cited
- Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 832 F.3d 1229 (11th Cir.) (upheld MAO recovery where primary insurer admitted coverage and funds were held to pay medical bills)
- MSP Recovery, LLC v. Allstate Ins. Co., 835 F.3d 1351 (11th Cir.) (an MAO must plead and prove primary-plan contractual obligation; defendants may assert contract defenses)
- In re Avandia Mktg., Sales Practices & Prod. Liab. Litig., 685 F.3d 353 (3d Cir.) (recognized MAO access to private cause of action where primary settled claims reserving funds to reimburse Medicare)
- Bio-Med. Applications of Tennessee, Inc. v. Cent. States Se. & Sw. Areas Health & Welfare Fund, 656 F.3d 277 (6th Cir.) (discussed interpretive difficulties of §1395y(b)(3)(A) and limitations on private cause of action)
- Caldera v. Ins. Co. of the State of Pennsylvania, 716 F.3d 861 (5th Cir.) (state-law requirements for entitlement, like preauthorization, are not preempted by MSPA)
- Health Ins. Ass'n of America v. Shalala, 23 F.3d 412 (D.C. Cir.) (42 C.F.R. §411.24(f) exceeds Secretary's authority and is invalid)