FL Court of Appeal Reverses Class Certification by MSP Recovery for a Third Time

by M. Heberling

We have previously written about the challenges MSP Recovery and their subsidiaries have experienced when trying to effectively navigate state procedural requirements and properly establish a claim for recovery on behalf of Medicare Advantage Organization (MAO) plans. Well, the hits keep on coming in Florida’s Third District Court of Appeal.

At issue is whether class certification was appropriately granted by the trial court. The Court of Appeal noted that MSP Recovery had previously attempted class action lawsuits against IDS Property and Casualty Insurance Company in 2018 (IDS I) and 2024 (IDS II). In both instances, the certification ultimately failed when the Court of Appeal reversed the class certification by the trial court.

In the present action of USAA Casualty Insurance Company vs. MSP Recovery Claims, Series LLC, MSP Recovery attempted to draw a distinction from the prior cases, and avoid a reversal of the class certification, by bringing a “declaratory action” instead of direct money damages. However, the Court of Appeal was not persuaded by the distinction and found that MSP Recovery failed to satisfy the predominance requirement, just as they had in the two prior cases. The Court of Appeal also indicated that the reasoning in IDS II was directly analogous to the present action.

With respect to the predominance requirement, the Court noted “[t]he appropriateness of the class certification turns largely on whether issues common to the class will predominate.” The Court found that proof that certain medical bills should have been paid by a MAO as primary payer will not establish that other medical bills paid by a different Insurer should also have been paid by that MAO. The Court found that proof to establish liability would devolve into a series of mini trials under Florida law, which precludes the finding of predominance. Therefore, the class certification was reversed, and the case was remanded to the trial court.

Despite MSP Recovery’s difficulty in prevailing in Court on behalf of MAOs, the specter of double damages for unpaid conditional payments and the use of the private cause of action remains. Medicare Advocacy and Recovery Coalition (MARC) has a primary future goal of passing the RAMP Act to eliminate the private cause of action and double damages. MARC has successfully spearheaded other efforts, like the SMART Act in 2012 and the PAID Act in 2020 and hopefully will be successful again with the RAMP Act.

In the meantime, IMPAXX continues to recommend that the parties identify Part C and Part D lienholders before finalizing a settlement to prevent unexpected recoveries, exposure to double damages, and potentially avoid future litigation. If you have any questions about this case and/or would like to discuss Medicare Parts C/D liens, please reach out to our Settlement Consulting team at [email protected].