MSP Recovery Claims, Series LLC v. Metropolitan General Insurance CompanyMSP Recovery Claims, Series LLC v. Metropolitan General Insurance Company
MSP RECOVERY CLAIMS, SERIES LLC,
MSPA CLAIMS 1, LLC,
MAO-MSO RECOVERY II LLC, SERIES PMPI,
a segregated series of MAO-MSO II LLC,
Plaintiffs-Appellants,
versus
METROPOLITAN GENERAL INSURANCE COMPANY,
METROPOLITAN CASUALTY INSURANCE COMPANY,
METROPOLITAN GROUP PROPERTY & CASUALTY
INSURANCE COMPANY,
METLIFE AUTO & HOME GROUP,
METROPOLITAN P&C INSURANCE COMPANY,
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 1:20-cv-24052-RNS
Before JORDAN, LUCK, and LAGOA, Circuit Judges.
This appeal involves claims brought under the private cause of action provided for
The district court dismissed MSP Recovery‘s claims because the complaint failed to show that Defendants had a “demonstrated responsibility” to reimburse MSP Recovery‘s assignors for the medical expenses at issue. This appeal asks us to determine whether MSP Recovery‘s complaint plausibly alleged that Defendants had a demonstrated responsibility to pay the claims. After careful review, and with the benefit of oral argument, we reverse the district court‘s decision and remand for further proceedings.
I. BACKGROUND
Because this appeal concerns the Medicare Secondary Payer Act, we summarize the Act before addressing MSP Recovery‘s claims.
A. Statutory Framework
Traditional Medicare consists of Parts A and B—the fee-for-service provisions entitling recipients to have Centers for Medicare & Medicaid Services (“CMS“) pay providers directly for their medical care. See
The Medicare Secondary Pаyer Act (the “MSP Act“) was enacted in 1980 to reduce the costs of Medicare. Glover v. Liggett Grp., Inc., 459 F.3d 1304, 1306 (11th Cir. 2006). More than one insurer is often liable for an individual‘s medical costs. Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 832 F.3d 1229, 1233 (11th Cir. 2016). For example, a car accident victim who is covered by Medicare may also be entitled to recover medical expenses under both his own health insurance and the tortfeasor‘s car insurance policies. To address this overlap in coverage, the MSP Act allocates liability between Medicare and other insurers. See id. The MSP Act uses the term “primary plan” to describe entities with a primary responsibility to pay and defines the term broadly to include “an automobile or liability insurance policy or plan (including a self-insured plan) or no fault insurance.”
Before the MSP Act went into effect, “Medicare often acted as a primary insurer; that is, Medicare paid for enrollees’ medical expenses, even when an enrollee carried other insurance that covered the same costs, or when a third party had an obligation to pay for them.” MSP Recovery, LLC v. Allstate Ins. Co., 835 F.3d 1351, 1354–55 (11th Cir. 2016). As its name suggests, the Medicare Secondary Payer Act was enacted to ensure Medicare acts as a secondary payer. “This means that if payment for covered services has been or is reasonably expected to be made by someone else, Medicare does not have to pay.” Id. at 1355 (quoting Cochran v. U.S. Health Care Fin. Admin., 291 F.3d 775, 777 (11th Cir. 2002)).
In fact, the MSP Act prohibits Medicare from paying for items or services if “payment has been made or can reasonably be expected to be made under . . . an automobile or liability insurance policy or plan (including a self-insured plan) or under no fault insurance.”
a judgment, a payment conditioned upon the recipient‘s compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan‘s insured, or by other means.
To facilitate recovery of conditional payments, Congress created government and private causes of action for double damages against primary plans that fail to provide primary payment or appropriate reimbursement. See
There is established a privаte cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with [its primary payment obligations].
With this statutory framework in mind, we turn to the factual and procedural background of the case.
B. Factual and Procedural Background
The MSP Recovery entities are “collеction agencies that specialize in recovering funds on behalf of various actors in the Medicare Advantage system.” See MSP Recovery Claims, Series LLC v. ACE Am. Ins. Co., 974 F.3d 1305, 1308 (11th Cir. 2020), cert. denied,
MSP Recovery filed the instant class action complaint2 “on behalf of themselves
MSP Recovery alleged that Defendants had a demonstrated responsibility to reimburse the MAOs in one of two circumstances: (1) where Defendants were contractually obligated to pay for enrollees’ accident-related medical еxpenses under “no-fault” coverage liability policies, or (2) where Defendants entered into settlement agreements with enrollees as a result of claims arising under Defendants’ liability insurance policies.
According to MSP Recovery, it “identified numerous instances where Defendants admitted, by reporting to CMS, that they were obligated (pursuant to no-fault and other liability policies) to provide primary payment on behalf of [e]nrollees.” “And in those instances where Defendants reported themselves responsible pursuant to ‘other liability’ policies, they did so as a result of entering into settlement agreements with the Medicare beneficiary at issue.” But the complaint itself did not specify thеse instances. Instead, MSP Recovery attached a “sample list of these instances” to the complaint in “Exhibit A.”
Exhibit A contained hundreds of claims assigned to MSP Recovery. The complaint alleged that MSP Recovery‘s assignors made conditional payments on behalf of each of these claims and that each payment was “subject to overlapping primary coverage from the Defendants.” Exhibit A included the following information in connection with each of these claims: (1) the beneficiary, identified by the MSP Recovery Member ID; (2) the MSP Recovery assignor that made the conditional payment; (3) the plan with primary responsibility to pay; (4) the insurance policy number; and (5) whether the primary payment obligation arose as a result of a contractual obligation or settlement.
The complaint alleged that MSP Recovery identified the claims in Exhibit A by comparing their assignor‘s claims data against two sets of documents: (1) “Defendants’ filings with CMS under
Defendants moved to dismiss the complaint under
The district court granted Defendants’ motion to dismiss because it found MSP Recovery failed to sufficiently plead that
As to the inclusion of Exhibit A, the district court cited its recent decision in MSP Recovery Claims, Series LLC v. Amerisure Insurance Company, No. 17-23961-CIV, 2021 WL 358670, at *3 (S.D. Fla. Feb. 1, 2021), in which it held that an exhibit attached to a complaint “may not serve as a substitute for factual allegations.” There, the district court stated that it was not enough for an exhibit attached to a complaint to contain exemplars; the complaint itself had to contain at least “an instance” or “representative example” of the plaintiff‘s alleged injury. Id. The district court held that MSP Recovery‘s complaint in this action “suffer[ed] from similar pleading deficiencies” and that these deficiencies were “fatal to [MSP Recovery‘s] claims.” As to the adequacy of MSP Recovery‘s factual allegations, the district court found that the complaint was “completely devoid of non-conclusory factual allegations that would allow the [c]ourt or the Defendants to determine whether [MSP Recovery] ha[d] stated cognizable claims under the MSP [Act], specifically whether [MSP Recovery] ha[d] ‘demonstrated’ a responsibility by any of the Defendants to make payments under the MSP [Act].” The district court also denied MSP Recovery‘s request for leave to amend, reasoning that the request was “inserted, as an afterthought, at the end of their opposition to the Defendants’ motion” and was thus “procedurally defective and lacking in substantive support.”
MSP Recovery filed a motion for reconsideration, which аlso requested leave to file a second amended complaint. The district court denied MSP Recovery‘s motion. This timely appeal followed.3
II. STANDARD OF REVIEW
We review de novo an order dismissing a complaint under
III. ANALYSIS
On appeal, MSP Recovery contends that the district court erred in dismissing its complaint because the complaint sufficiently alleged the elements for a private cause of action under the MSP Act, including that Defendants had a demonstrated responsibility to pay its claims. Defendants assert, however, that dismissal was warranted because the two-dismissal rule of
Our analysis of the parties’ arguments proceeds in two parts. First, we consider whether the district court erred in dismissing MSP Recovery‘s complaint for failure to state a claim under the MSP Act. Then, we consider Defendants’ alternative arguments in support of dismissal.
“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.‘” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). At the motion to dismiss stage, “all well-pleaded facts are accepted as true, and the reasonable inferences therefrom are construed in the light most favorable to the plaintiff.” Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1273 n.1 (11th Cir. 1999). Of course, “[t]hreadbare reсitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678.
“Though the MSP Act as a whole is ‘remarkably abstruse,’ the private cause of action is remarkably simple.” MSPA Claims 1, LLC v. Tenet Fla., Inc., 918 F.3d 1312, 1320 (11th Cir. 2019) (quoting Allstate, 835 F.3d at 1358). As explained above, the private cause of action allows plaintiffs to recover double damages “in the case of a primary plan which fails to provide for primary payment []or appropriate reimbursement” of conditional payments made by a secondary payer.
This Court has distilled the
Only the second element—the defendant‘s failure to provide for primary payment or appropriate reimbursement—is at issue in this appeal. As for that element, “the would-be primary payer‘s responsibility must be ‘demonstrated’ in some way prior to the suit for reimbursement.” MSPA Claims 1, LLC v. Kingsway Amigo Ins. Co., 950 F.3d 764, 771 (11th Cir. 2020). “Until Defendants’ responsibility to pay for a Medicare beneficiary‘s expenses has been demonstrated . . . , Defendants’ obligation to reimburse Medicare does not exist,” and “it cannot be said that Defendants have ‘failed’ to provide appropriate reimbursement.” Glover, 459 F.3d at 1309.
Here, the district court dismissed MSP Recovery‘s complaint for failing to рlausibly allege Defendants had a demonstrated responsibility to pay its claims. According to the district court, Exhibit A could not “serve as a substitute for factual allegations.” Additionally, the district court reasoned that the complaint did not include any facts “related to any enrollee, the amount charged to [MSP Recovery‘s] assignors or amounts they supposedly paid, what exactly such payments were for, what treatment was provided, what exactly was supposedly covered and not paid by Defendants, or what coverage determinations were made by the Defendants.” “Absent such information,” the district court concluded that the complaint failed “to state cognizable claims.”
On appeal, MSP Recovery argues that the district court erred by refusing to consider Exhibit A as part of the complaint and that the complaint, including Exhibit A, stated a claim for relief under the MSP Act. In response, Defendants assert that the district court correctly refused to consider
1. The district court erred in failing to consider Exhibit A to the complaint
“In deciding whether a complaint states a claim upon which relief may be granted, we normally consider all documents that are attached to the complaint or incorрorated into it by reference.” Gill ex rel. K.C.R. v. Judd, 941 F.3d 504, 511 (11th Cir. 2019). “The Civil Rules [of Procedure] provide that an attachment to a complaint generally becomes ‘part of the pleading for all purposes,’
Here, the district court found that it would not consider Exhibit A, which was attached to and referenced by incorporation in the factual allegations of MSP Recovery‘s complaint. Because “documents attached to a complaint or incorporated in the complaint by reference can generally be considered by a federal court in ruling on a motion to dismiss under
We now turn to address whether the complaint and Exhibit A taken together plausibly allege that Defendants had a demonstrated responsibility to pay.
2. The demonstrated responsibility standard
As noted, the MSP Act requires a primary plan to reimburse Medicare only “if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service.”
Plaintiffs can show a primary рlan‘s responsibility to pay has been demonstrated by “a judgment, a payment conditioned upon the recipient‘s compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan‘s insured, or by other means.”
In Allstate, we held that “a plaintiff suing a primary plan under the private cause of action in the MSP Act may satisfy the demonstrated responsibility prerequisite by alleging the existence of a contractual obligation to pay.” 835 F.3d at 1362–63. Defendants contend that the following language from Allstate requires that, to survive a motion to dismiss, plaintiffs must also allege additional facts showing the contractual obligation “actually render[s] them primarily responsible for the expenses at issue“:
[Our holding] does not relieve Plaintiffs of their burden to allege in their complaints, and then subsequently prove with evidence, that Defendants’ valid insurance contracts actually render Defendants responsible for primary payment
of the expenses Plaintiffs seek to recover. And Defendants may still assert any valid contract defense in arguing against their liability. We hold only that a contractual оbligation may satisfy the demonstrated responsibility requirement, not that the existence of a contractual obligation conclusively demonstrates liability under the MSP Act‘s private cause of action.
Id. at 1361. But this language merely says that, while it is sufficient at the motion to dismiss stage to allege there is a contractual obligation that renders Defendants “responsible for primary payment of the expenses” at issue, plaintiffs will need to later present evidence in support of that allegation.
As to settlement agreements, we have held that a defendant‘s settlement agreement with a beneficiary can be used to demonstrate responsibility to pay, and knowledge of it. See Kingsway, 950 F.3d at 772 (“[Plaintiff] alleges that [defendant‘s] responsibility has been ‘demonstrated’ by its settlement of the underlying personal-injury suit . . . . [B]ased on our precedent interpreting the private cause of action, [plaintiff] seems to have done everything it needed to do.“); ACE, 974 F.3d at 1319 (“Defendants’ settlement agreements with beneficiaries show, at a minimum, that Defendants had constructive knowledge that they owed the primary payments.“).
And finally, as to defendants’ knowledge of their responsibility to pay, this Court has determined that defendants’ CMS filings5 “evidence [d]efendants’ knowledge that they owed primary payments.” ACE, 974 F.3d at 1319. The MSP Act requires certain kinds of insurance plans—including liability and no-fault insurance plans,
In summary, to survive a motion to dismiss on Medicare Secondary Payer Act claims, a plaintiff must plausibly allege that a defendant‘s responsibility to pay had been demonstrated before filing suit, and a defendant must have (at least constructively) known of such obligation. A defendant‘s responsibility can be shown in many ways, including by having a contractual obligation to pay and entering into a settlement agreement with a beneficiary for accident-related medical expenses. As to the knowledge requirement, a defendant‘s CMS filings evidence constructive knowledge that the defendant owed primary payments.
With this background in mind, we turn to whether MSP Recovery‘s complaint plausibly alleged Defendants had a demonstrated responsibility to pay its claims.
On appeal, MSP Recovery argues that because those instances were too numerous to allege in a complaint, MSP Recovery attached Exhibit A to the complaint, which contained the following information about each claim: (1) the beneficiary, identified by the MSP Recovery Member ID; (2) the MSP Recovery assignor that made the conditional payment; (3) the plan with primary responsibility to pay; (4) the insurance policy number; and (5) whether the primary payment obligation arose as a result of a contractual no-fault obligation or settlement. MSP Recovery identified the claims in Exhibit A by comparing their assignor‘s claims dаta against Defendants’ filings with CMS, under
In other words, MSP Recovery alleged that Defendants had contractual obligations and settlement agreements with beneficiaries that made them responsible to pay for the claims listed in Exhibit A, and that Defendants reported these obligations and settlements to CMS. We hold that, at this stage, MSP Recovery‘s allegations “satisfy the demonstrated responsibility prerequisite.” See Allstate, 835 F.3d at 1362–63 (holding “that a plaintiff suing a primary plan under the private cause of action in the MSP Act may satisfy the demonstrated responsibility prerequisite by alleging the existence of a contractual obligatiоn to pay. A judgment or settlement from a separate proceeding is not necessary“); Kingsway, 950 F.3d at 772 (concluding that, when a plaintiff “allege[d] that [defendant‘s] responsibility has been ‘demonstrated’ by its settlement” with beneficiaries, it “seem[ed] to have done everything it needed to do” at the motion to dismiss stage); ACE, 974 F.3d at 1319 (concluding that plaintiffs “plausibly alleged that Defendants had” actual or constructive knowledge of primary payer responsibility where defendants had reported such responsibility to CMS under
We do not end our analysis here, however, as Defendants argue that dismissal is still warranted even if MSP Recovery met the demonstrated responsibility requirement. We address those arguments in turn.
3. Defendants’ Alternative Arguments For Dismissal
First, Defendants argue that the two-dismissal rule of
this action, the cases cited by Defendants involved a single plaintiff—MSP Recovery Claims, LLC and a single defendant—Metropolitan Casualty Insurance Company, and involved “distinct failures
Second, Defendants claim the district court lacked personal jurisdiction over two of the Defendants because Metropolitan Group Property and Casualty Insurance Company “does not write insurance in Florida and does not have any automobile insurance policies currently in force therе,” and MetLife Auto & Home Group does not even exist. MSP Recovery responds that Defendants’ CMS reporting undermines their arguments, and any errors in its naming of the Defendants was due to Defendants’ sloppy reporting to CMS.
The district court, however, did not address either of these arguments. And we generally “will not consider issues which the district court did not decide.” McKissick v. Busby, 936 F.2d 520, 522 (11th Cir. 1991); accord Nyland v. Moore, 216 F.3d 1264, 1267 (11th Cir. 2000). Because the district court did not address these issues, we decline to do so here in the first instance. McKissick, 936 at 522; Nyland, 216 F.3d at 1267. On remand, the district court should address, and make the factual findings necessary to
MSP Recovery Claims v. Metropolitan Casualty Insurance Company, No. 17-cv-23825-DLG (S.D. Fla.).
determine, whether it had personal jurisdiction over the Defendants and whether this case is barred by
IV. CONCLUSION
For the reasons stated, we hold that at this procedural stage MSP Recovery‘s complaint plausibly alleged that Defendants had a demonstrated responsibility to pay the claims, and we therefore reverse and remand this case to the district court for further proceedings consistent with this opinion.
REVERSED AND REMANDED.
JORDAN, Circuit Judge, Concurring in the Judgment:
I agree that we should reverse, but my reasoning differs from the majority‘s. In my view, the district court correctly dismissed the plaintiffs’ complaint but erred in denying leave to amend. I therefore concur in the judgment.
I‘ll start with the sufficiency of the first amended complaint. Our cases indicate that an insurer‘s submission of reports to the government about a claimant‘s entitlement to Medicare benefits constitutes “evidence” that thе insurer knew that it “owed primary payments” under the Medicare Secondary Payer Act,
As the majority notes, documents attached to and incorporated in a complaint must be considered in evaluating sufficiency under
Here, for example, is the very first entry on Exhibit A (with the address of the defendant excluded for space reasons):
| MSP Member Id | Contract/Plan # | Reporting Primary Payer | Insurance Type | MSP Client |
|---|---|---|---|---|
| 5306294-BCBSRI | 6963690070 | Metropolitan Property & Casualty | other liability insurance. . . | BCBSRI-BCBSRI |
How that entry (and others like it) provided fair notice to Metropolitan Property and Casualty is beyond me. Sеe Johnson v. City of Shelby, 574 U.S. 10, 12 (2014) (explaining that a complaint is sufficient when it “simply, concisely, and directly” sets out the matters that entitle the plaintiffs to damages from the defendants); 5 Charles Alan Wright, Arthur R. Miller, and A. Benjamin Spencer, Federal Practice and Procedure § 1216 (4th ed. 2021) (“The pleader is entitled to considerable latitude regarding the mode of stating a claim for relief, provided the pleading gives reasonable notice of the claims that are being asserted.“).
In a footnote in their complaint, the plaintiffs explained that “[a]dditional information regarding the Medicare beneficiaries referenced in Exhibit A will be made available to [the defendants] upon request,” and that such information was “reserved” in order to ensure protection of personal information in “accordance with HIPAA.” D.E. 10 at ¶ 55 n.9. But that offer, however well-intentioned, could not prop up a deficient complaint. The adequacy and sufficiency of a complaint is not determined based on whether the plaintiffs are able to answer basic post-filing questions posed by the defendants. As for the plaintiffs’ purported concern about HIPAA, it was unfounded. In their proposed second amended complaint, the plaintiffs set out a number of alleged exemplars and submitted a new chart set containing the names of the beneficiaries and the dates of occurrence or loss. See D.E. 39-1 at ¶¶ 54–59, 72–151; D.E. 39-3 (Ex. B to proposed second amended complaint). To avoid any HIPAA problems, the proposed second
It seems to me that the plaintiffs, who are “collection agencies” involved in a high-volume aspect of the Medicare industry, see ACE, 974 F.3d at 1308, were testing the
Because I conclude that the district court correctly dismissed the plaintiffs’ first amended complaint, the next question is whether leave to amend should have been granted. For me, the answer is yes.
The district court, citing to Newton v. Duke Energy Florida, LLC, 895 F.3d 1270, 1277 (11th Cir. 2018), denied leave to amend because the plaintiffs had included their request in their motion for reconsideration. See D.E. 38 at 4–5. But a closer reading of Newton indicates that leave should have been granted. Although Newton reaffirmed the rule that a request for leave to amend is not properly raised if embedded in a memorandum in opposition to a motion to dismiss, it also explained that a plaintiff can seek leave to amend in a motion under
As noted above, the proposed second amended complaint contained several exemplars. It also set out the names of the beneficiaries and the dates of occurrence or loss in a new chart. Those changes largely remedied the pleading problems I‘ve identified, and as a result the proposed second amended complaint was not legally futile. The plaintiffs should havе been granted leave to file it, and I would reverse and remand so that the defendants can respond to that complaint as they see fit.