United States District Court, M.D. Florida, Orlando Division
GREGORY A. PRESNELL, UNITED STATES DISTRICT JUDGE.
matter comes before the Court without a hearing on the Motion
to Stay Proceedings or, in the Alternative, for Order Setting
Scheduling Conference (Doc. 60) filed by the Defendant,
Halifax Health, Inc. (henceforth, “Halifax”), the
response in opposition (Doc. 64) filed by the Plaintiff, MSPA
Claims 1, LLC (“MSPAC”), and the reply (Doc. 68)
filed by Halifax.
filed this purported class action as the assignee of Florida
Healthcare Plus, Inc. (“FHCP”), a Medicare
Advantage Organization (“MAO”). In its Complaint
(Doc. 22-1 at 7-29), originally filed in state court and
subsequently removed, MSPAC alleges that one of FHCP's
enrollees incurred $32, 000 in medical bills for
treatment from Halifax. The enrollee also had medical
coverage through 21st Century Preferred Insurance Company
(“21st Century”), which was the primary payer for
that enrollee. MSPAC contends that Halifax billed both FHCP -
which was secondarily liable - and 21st Century the full
amount of the enrollee's bill. 21st Century paid its $10,
000 policy limit, and FHCP paid the entire $32, 000.
Count I of the Complaint, MSPAC seeks to recover the $10, 000
overpayment (as FHCP's assignee) pursuant to the Medicare
Secondary Payer Act (the “MSP Act”), 42 U.S.C.
§ 1395y(b). MSPAC also argues that Halifax's failure
to reimburse FHCP was a violation of Florida's Deceptive
and Unfair Trade Practices Act, Fla. Stat. §501.201
et seq. (Count II) and constituted unjust enrichment
(Count III). Halifax has filed a motion to dismiss (Doc. 16),
arguing inter alia that MSPAC lacks a legal basis
for pursuing those claims. That motion is ripe for review. In
the instant motion, Halifax requests a stay to avoid
incurring discovery costs before the motion to dismiss has
passed the MSP Act in 1980 to reduce the costs of Medicare.
Glover v. Liggett Grp., Inc., 459 F.3d 1304, 1306
(11th Cir. 2006). Prior to the passage of the MSP Act,
Medicare often acted as a primary payer, paying for an
enrollee's medical expenses even when the enrollee
carried other insurance that covered those expenses or when
some third party had an obligation to pay for them. MSP
Recovery, LLC v. Allstate Insurance Company, 835 F.3d
1351, 1354-55 (11th Cir. 2016). The MSP Act changed this,
making Medicare only secondarily liable - meaning that if
payment has been or is reasonably expected to be made by
another entity, Medicare does not have to pay. 42 U.S.C.
§ 1395y(2)(A); Cochran v. U.S. Health Care Fin.
Admin., 291 F.3d 775, 777 (11th Cir. 2002). To
accommodate its beneficiaries, however, Medicare does make
payments for covered services, even when another source is
obligated to do so, if the other source is not expected to
pay promptly. 42 U.S.C. § 1395y(2)(B)(i);
Cochran at 777. These payments are conditioned on
reimbursement to Medicare, 42 U.S.C. § 1395y(2)(B)(i),
and are referred to as “conditional payments”.
Section 1395y(3)(A) of the MSP Act provides a private cause
of action for double damages “in the case of a primary
plan which fails to provide for primary payment (or
appropriate reimbursement)” in accordance with the
provisions of 42 U.S.C. § 1395y(1) and 42 U.S.C.
§1395y(2)(A). It is this private right of action that
MSPAC seeks to utilize against Halifax in Count I.
does not dispute that MSPAC is entitled to recover the $10,
000 paid by FHCP that had also been paid by 21st Century. But
Halifax makes several legal arguments that MSPAC cannot
proceed under the MSP Act's private right of action to do
so. In particular, Halifax argues that the $10, 000 at issue
was simply a mistaken overpayment, rather than a conditional
payment, and that the MSP Act's private right of action
only applies in regard to conditional payments. In addition,
Halifax notes that, by its terms, 42 U.S.C. §
1395(y)(3)(A) provides for suit being brought against
“a primary plan which fails to provide payment (or
appropriate reimbursement), ” not a provider such as
initial discovery request in this putative class action,
MSPAC seeks, inter alia, financial records for every
Medicare recipient treated at Halifax in the past seven
years. Thus, discovery in this case is likely to be highly
burdensome. Facial challenges to the legal sufficiency of a
claim or defense, such as a motion to dismiss for failure to
state a claim, should be resolved before discovery begins.
Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1367
(11th Cir. 1997). Accordingly, the Court will grant
Halifax's request for a stay of discovery pending
resolution of its motion to dismiss.
consideration of the foregoing, it is hereby
that the Motion to Stay Proceedings or, in the Alternative,
for Order Setting Scheduling Conference (Doc. 60) is
GRANTED as set forth above. Discovery in
this matter is STAYED indefinitely pending
resolution of the Defendant's motion to dismiss (Doc.