MSPA Claims 1, LLC v. Covington Specialty Insurance Company

MSPA CLAIMS 1, LLC, Plaintiff, v. COVINGTON SPECIALTY INSURANCE COMPANY, Defendant.

No. 19-21583-Civ-WILLIAMS/TORRES

United States District Court, S.D. Florida

May 24, 2021

REPORT AND RECOMMENDATION ON PENDING MOTIONS FOR SUMMARY JUDGMENT

EDWIN G. TORRES, United States Magistrate Judge.

This matter is before the Court on Covington Specialty Insurance Company's (“Defendant” or “Covington”) and MSPA Claims 1, LLC's (“Plaintiff” or “MSPA”) cross-motions for summary judgment. [D.E. 130, 134]. Each party filed their respective responses [D.E. 146, 152] and replies. [D.E. 156 161]. Therefore, the motions are now ripe for disposition. After careful consideration of the motions, responses replies, relevant authorities, and for the reasons discussed below, Covington's motion for summary judgment should be GRANTED and MSPA's motion for summary judgment should be DENIED.^[1]

I. BACKGROUND

On September 13, 2018, MSPA filed a two-count complaint in the United States District Court for the District of New Hampshire seeking relief under the Medicare Secondary Payer Act (the “MSP Act” or the “Secondary Payer Act”) and alleging that Covington failed to reimburse a Medicare Advantage Organization (“MAOs”) for medical payments made on behalf of an enrollee, P.M.^[2] The District Court of New Hampshire granted Covington's motion to transfer venue on March 21, 2019 and transferred this case to the United States District Court for the Southern District of Florida. [D.E. 28].

MSPA is an assignee of subrogated claims, recovery, and reimbursement rights from Florida Healthcare Plus, LLC (“FHCP”).^[3] FHCP is an MAO that contracted with the Centers for Medicare and Medicaid Services (“CMS”) to provide Medicare benefits to eligible members enrolled in FHCP's Medicare Advantage health plan under Part C of the Medicare Act. Plan members are referred to as “enrollees, ” and FHCP served the needs of its enrollees through its Medicare and managed care programs, delivered through its network of physicians and health care professionals.

Plaintiff alleges that P.M. was a member of a Medicare Advantage Plan that FHCP managed at the time of a slip and fall. FHCP paid approximately $2, 347.89 for P.M.'s accident-related medical expenses pursuant to a contract with CMS. The complaint also claims that Covington was the primary payer of P.M.'s injuries as a “no-fault” insurer and pursuant to a general liability policy.^[4] But, MSPA alleges that Covington failed to pay any medical services, and failed to reimburse FHCP for the payments it made on behalf of P.M. to satisfy certain medical bills.

FHCP subsequently entered into an agreement to assign its MSP Act claims to La Ley Recovery Systems, Inc. (“La Ley”) on April 15, 2014. This assigned “all of [FHCP's] rights as it pertains to the rights pursuant to any plan, State or Federal statute whatsoever directly and/or indirectly for any [of] its members and/or plan participants.” [D.E. 55-2 at § 1.1]. On February 20, 2015, La Ley entered into a separate agreement with MSPA to assign all claims for reimbursement that it acquired pursuant to the previous assignment. In determining whether MSPA should recover damages for unpaid medical expenses and other reimbursements under 42 U.S.C. § 1395y(b)(3)(A) and 42 C.F.R. § 411.24(e), each party filed a motion for summary judgment that is now ripe for disposition.

II. APPLICABLE PRINCIPLES AND LAW

The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).

A party asserting that a fact cannot be or is genuinely disputed must support the assertion by: (A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials; or (B) showing that materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.

Fed. R. Civ. P. 56(c)(1). On summary judgment the inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion. See Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 597 (1986) (quoting another source).

In opposing a motion for summary judgment, the nonmoving party may not rely solely on the pleadings, but must show by affidavits, depositions, answers to interrogatories, and admissions that specific facts exist demonstrating a genuine issue for trial. See Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323B24 (1986). The existence of a mere “scintilla” of evidence in support of the nonmovant's position is insufficient; there must be evidence on which the jury could reasonably find for the nonmovant. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). A court need not permit a case to go to a jury . . . when the inferences that are drawn from the evidence, or upon which the non-movant relies, are implausible. See Mize v. Jefferson City Bd. Of Educ., 93 F.3d 739, 743 (11th Cir. 1996) (citing Matsushita, 475 U.S. at 592-94).

At the summary judgment stage, the Court's function is not to “weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at 249. In making this determination, the Court must decide which issues are material. A material fact is one that might affect the outcome of the case. See id. at 248 (“Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.”). “Summary judgment will not lie if the dispute about a material fact is genuine, that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

III. ANALYSIS

Each party seeks summary judgment on the two counts listed in MSPA's amended complaint for a private cause of action under 42 U.S.C. § 1395y(b)(3(a) and for breach of contract under 42 C.F.R. § 411.24(e). MSPA seeks summary judgment because the undisputed facts show (1) that Covington is a primary payer responsible for P.M.'s medical expenses, (2) that Covington failed to reimburse MSPA for those costs, and (3) that MPSA suffered damages. If MSPA prevails on count one, it reasons that the Court must grant the same as to count two and award double damages and interest.

Covington, on the other hand, seeks summary judgment because MSPA cannot point to any evidence demonstrating a responsibility to pay. And even if Plaintiff could meet that burden, Covington argues that there is still insufficient evidence that FHCP made an actual payment toward P.M.'s medical expenses. Covington also claims that MSPA failed to present any evidence or testimony “that either Plaintiff or its assignor was a party or third-party beneficiary of Covington's insurance policy, that Plaintiff obtained an assignment from any party to Covington's policy of insurance, or that would otherwise support its breach of contract claim against Covington.” [D.E. 130 at 16]. To inform the analysis that follows, we consider the general principles of the MSP Act, its underlying purposes, and how it operates in the recovery of medical expenses for enrollees.

A. General Principles of the MSP Act

In 1980, Congress passed the MSP Act to reduce the costs of Medicare. SeeGlover v. Liggett Grp., Inc., 459 F.3d 1304, 1306 (11th Cir. 2006). Prior to the law's passage, Medicare often acted as a primary insurer - meaning Medicare paid for an 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. See Bio-Med. Applications of Tenn., Inc. v. Cent. States Se. & Sw. Areas Health &Welfare Fund, 656 F.3d 277, 278 (6th Cir. 2011) (“Medicare paid for all medical treatment within its scope and left private insurers merely to pick up whatever expenses remained.”). The MSP Act changed that relationship so that Medicare acts as a secondary payer, where “if payment for covered services has been or is reasonably expected to be made by someone else, Medicare does not have to pay.” Cochran v. U.S. Health Care Fin. Admin., 291 F.3d 775, 777 (11th Cir. 2002). “Congress's intent was to reposition the burden back to private insurers where it could best be absorbed, especially considering that these insurers had already assumed such burdens-and received the benefits-in contracts with the insured.” Manning v. Utilities Mut. Ins. Co., 254 F.3d 387, 396 (2d Cir. 2001).

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 a workmen's compensation law or plan of the United States or a State or under an automobile or liability insurance policy or plan (including a self-insured plan) or under no fault insurance.” 42 U.S.C. § 1395y(b)(2)(A)(ii). If, however, a primary payer - in the parlance of the statute, a “primary plan” - “has not made or cannot reasonably be expected to make payment with respect to the item or service promptly, ” Medicare may make a payment on the enrollee's behalf, conditioned on reimbursement from the primary plan. Id. § 1395y(b)(2)(B)(i); see also Cochran, 291 F.3d at 777 (“In order to accommodate its beneficiaries, however, Medicare does make conditional payments for covered services, even when another source may be obligated to pay, if that other source is not expected to pay promptly.”).

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