MSP Recovery Claims, Series LLC v. Technology Insurance Company, Inc.

Background

MSP Recovery Claims, Series LLC and Series 16-08-483, a designated series of that company, brought a putative class action under the Medicare Secondary Payer Act. They sought recovery of conditional Medicare payments from Technology Insurance Company, Inc., Amtrust Financial Services, Inc., and Amtrust North America, Inc. The plaintiffs alleged that the defendants had repeatedly failed to reimburse payments made for medical expenses resulting from accidents.

The plaintiffs were not Medicare Advantage organizations. They alleged that the Medicare Advantage organization Health Insurance Plan of Greater New York assigned recovery rights to them. The assignment covered Medicare recovery claims for health care services rendered and paid for by that organization between September 29, 2011, and September 29, 2017. It excluded claims assigned to or being pursued by other recovery vendors.

The complaint included 16 representative claims. It did not specify when the Medicare Advantage organization paid the charges for those claims. For some claims, it also provided only a range of possible accident dates rather than a specific date.

Motions and Issue

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction and under Rule 12(b)(6) for failure to state a claim. The court addressed standing, which is the requirement that a plaintiff show a concrete injury connected to the defendant’s conduct and likely to be remedied by a court decision.

Because the standing challenge was based on the pleadings, the court accepted the complaint’s material factual allegations as true and construed them in the plaintiffs’ favor. The plaintiffs nevertheless had to allege facts plausibly showing that they had standing.

Court’s Reasoning

An assignee may have standing to assert an injury suffered by the assigning party if the assignment covers the claim. Here, however, the assignment was limited by the payment period and by the exclusion for claims assigned to or pursued by other recovery vendors.

The complaint did not identify when the Medicare Advantage organization paid for any of the services. Without those dates, the court could not determine whether the representative claims fell within the assignment’s covered period. The court noted that the D.P. claim illustrated the problem: although the accident was alleged to have occurred on September 26, 2017, the complaint did not say when the medical services were paid for, making it unclear whether the payment occurred by September 29, 2017.

The court also found that the complaint did not allege that the representative claims had not previously been assigned to, or were not being pursued by, another recovery vendor. Because the assignment expressly excluded such claims, the plaintiffs had not shown that the claims belonged to them. The court concluded that the complaint did not plausibly establish standing and that the alleged injury was conjectural rather than concrete.

Disposition

The court granted the defendants’ motion to dismiss for lack of subject-matter jurisdiction. It dismissed the complaint without prejudice. Because the court lacked jurisdiction, it did not reach the defendants’ Rule 12(b)(6) arguments about whether the complaint stated a claim. Judge Analisa Torres directed the Clerk of Court to terminate the motion and close the case.