United States District Court, S.D. Florida, Miami Division
ORDER GRANTING MOTION TO DISMISS WITH
PATRICIA A. SEITZ, UNITED STATES DISTRICT JUDGE.
MATTER is before the Court on Defendants' Motion to
Dismiss Plaintiffs Consolidated Complaint. [DE 54]. In the
Consolidated Complaint [DE 48], Plaintiff alleges it is
entitled to reimbursement from Defendants for payments made
on behalf of Medicare beneficiaries pursuant to the Medicare
Secondary Payer Act (MSPA), 42 U.S.C. § 1395y(b).
Defendants move to dismiss for lack of standing and for
failing to state a claim. Fed.R.Civ.P. 12(b)(1), 12(b)(6).
Plaintiff filed a response [DE 57] to which Defendants
replied [DE 58]. Plaintiff also filed an Affidavit of Michael
Keeler [DE 60] which Defendants moved to strike as an
unauthorized sur-reply [DE 62].
is a threshold question that the Court must address to ensure
it has subject-matter jurisdiction over the claim. While the
Consolidated Complaint pleads additional facts compared to
the original complaints, the allegations still fail to
establish Plaintiff has standing as recognized under the
MSPA. Therefore, because Plaintiff fails to allege standing
to sue and the Court has already provided Plaintiff with
numerous opportunities to properly plead its claims, the Motion
to Dismiss is granted with prejudice.
is an entity whose business model involves obtaining
assignments from Medicare Advantage Organizations, first-tier
entities and downstream entities to recover reimbursement for
payments made for the medical expenses of Medicare
beneficiaries that should have been made by a private insurer
pursuant to the Medicare Secondary Payer Act (MSPA), 42
U.S.C. § 1395y(b). [DE 48 ¶ 89]. Plaintiff filed
this class action as the assignee of two entities-Health
First Administrative Plans, Inc. and Verimed IP A, LLC-to
seek reimbursement from Defendants pursuant to the MSPA. [DE
48 ¶¶ 14, 29]. Therefore, the Court must consider
whether Health First Administrative Plans, Inc. and Verimed
IP A, LLC have standing under the private cause of action in
the MSPA, § 1395y(b)(3)(A).
The Medicare Secondary Payer Act (MSPA)
enacted the Medicare Act'in 1965 to establish a health
insurance program for the elderly and disabled. At that time,
Medicare paid for medical expenses even when Medicare
beneficiaries were also enrolled in third-party insurance
policies that covered those same costs. See MSP Recovery,
LLC v. Allstate Ins. Co., 835 F.3d 1351, 1354 (11th Cir.
2016). In an effort to reduce costs, Congress passed the MSPA
in 1980 which made Medicare the secondary payer, rather than
the primary payer, for medical services provided to its
beneficiaries when they are covered for the same services by
a private insurer. See § 1395y(b)(2). Thus, the
private insurer becomes the primary payer, as defined by the
statute,  for medical services. However, when a
primary payer cannot be expected to make a payment for a
service promptly, Medicare may make conditional payments.
§ 1395y(b)(2)(B)(i). Once notified of its responsibility
for a payment, a primary payer must reimburse Medicare for
any payment made within 60 days. § 1395y(b)(2)(B)(ii).
In an effort to enforce this scheme, the MSPA created a
private cause of action for double damages when a primary
plan fails to provide payment. See §
Medicare Advantage Organizations, First-Tier Entities and
1997, Congress created Medicare Part C to give Medicare
beneficiaries the option of receiving Medicare benefits
through private insurers known as Medicare Advantage
Organizations (MAOs). See 42 U.S.C. § 1395w-21.
MAOs contract directly with Medicare to administer benefits
for a Medicare beneficiary. See Humana Medical Plan Inc.,
v. Western Heritage Ins. Co., 832 F.3d 1229, 1235 (11th
may then separately contract with third-parties, known as
first-tier entities and downstream entities, to provide
health care or administrative services to the Medicare
beneficiaries in the MAO's plan. See 42 C.F.R.
§ 422.2. The MAO pays first-tier entities and downstream
entities certain rates for certain categories of treatments.
Tenet Healthsystem GB, Inc. v. Care Improvement Plus
South Central Ins. Co., 875 F.3d 584, 586 (11th Cir.
2017). Plaintiff alleges these first-tier entities and
downstream entities take on the "full risk" for a
Medicare beneficiary's medical care. [DE 48 ¶¶
Relevant Allegations of the Consolidated Complaint
as assignee of two entities-Health First
Administrative Plans, Inc. ("HFAP") and Verimed
IPA, LLC ("Verimed")-alleges Defendants are primary
payers which failed to perform their statutory
obligation pursuant to the MSPA to reimburse Plaintiffs
assignors for medical payments made on behalf of Medicare
beneficiaries. [DE 48 ¶¶ 2, 4]. The relevant
alleged facts as to Plaintiffs HFAP and Verimed claims are:
1. HFAP: As assignee of HFAP, Plaintiff brings three
representative claims. Medicare beneficiaries J.L, J.W and
P.G. were each enrolled in a Medicare Advantage plan issued
and managed by HFAP, an MAO. [DE48 ¶¶ 8, 35, 45].
The medical providers issued bills to HFAP for the medical
expenses of J.L, J.W. and P.G. which HFAP paid. [DE 48
¶¶ 11, 39, 49].
2. Verimed: As assignee of Verimed, Plaintiff brings
two representative claims. Medicare beneficiaries S.H. and
P.L. were each enrolled in a Medicare Advantage plan issued
and managed by Optimum HealthCare, Inc.
("Optimum"), an MAO. [DE 48 ¶¶ 19, 55].
Optimum contracted with a first-tier entity, Verimed, to
provide services to S.H. and P.L., in exchange for a fixed
fee. [DE 48 ¶¶ 20, 56]. Under its contract with
Optimum, Verimed: (1) incurred the cost of S.H.'s medical
services provided by Springhill Regional Hospital and SDI
Diagnostic Imaging; and (2) reimbursed Optimum for services
P.L. received at Polk County, Central Florida Imaging
Associates, and Publix. [DE 48 ¶¶ 20, 26, 60; DE
48-7; DE 48-18].
alleges HFAP and Verimed assigned their rights to recover
conditional payments made on behalf of Medicare
beneficiaries. [DE 48 ¶¶ 14, 15, 29, 30]. Both
assignment agreements contain identical boilerplate language
describing HFAP and Verimed broadly as a "Health
Maintenance Organization, Maintenance Service Organization,
Independent Practice Association, Medical Center, and/or
other health care organization and/or provider ...." [DE
48-4; DE 48-8].
each representative claim, Plaintiff contends HFAP and
Verimed conditionally paid for medical services that
Defendants should have paid as primary payers under the MSPA.
Plaintiff seeks double damages under § 1395y(b)(3)(A),
as well as a reimbursement of damages under 42 C.F.R. §
411.24(e) because of Defendants' alleged failure
to properly reimburse Plaintiffs assignors.
STANDARD OF REVIEW
is the threshold question that must be addressed prior to,
and independent of, the merits of a party's claim because
it addresses the Court's jurisdiction to adjudicate the
claim. DiMaio v. Democratic Nat'l Comm., 520
F.3d 1299, 1301 (11th Cir. 2008). The party invoking federal
jurisdiction bears the burden of establishing standing by
showing: (1) that it suffered an injury-in-fact that is (a)
concrete and particularized, and (b) actual or imminent; (2)
a causal connection between the injury and the conduct
complained of (and not the result of the independent action
of some third party not before the court); and (3) that it is
likely, not merely speculative, that the injury will be
redressed by a favorable decision. Lujan v. Defs. of
Wildlife, 504 U.S. 555, 560 (1992). Plaintiff must
support each element of standing in the same way as any other
matter on which the plaintiff bears the burden of proof, with
the manner and degree of evidence required at the successive
stages of litigation. Id.
Court is required to carefully examine the allegations to
ascertain whether a plaintiff is entitled to an adjudication
of the claims asserted. DiMaio, 520 F.3d at 1301.
There is no standing where the Court can only imagine an
injury from the facts in the complaint. Id. The
Court should not speculate concerning standing; if a