Medicare Advantage Plan is Denied Recovery and Lawyers are Sanctioned

MSP Recovery, LLC is a Miami, Florida based law firm that allegedly represents Medicare Advantage Plans (MAPs) seeking to pursue a private cause of action and therefore double damages under the Medicare Secondary Payer Act. They have filed numerous direct actions and class actions asserting that primary plans have failed to reimburse the MAP and are liable for double damage recovery.

Recently, however, in Recovery v. State Farm, 2018 U.S. Dist. LEXIS 95789, the U.S. District Court for the Central District of Illinois entered a decision on June 7, 2018 that dismissed such a claim. The claim was brought by an administrative company, Health First Administrative Plans. The plaintiff’s firm, through a series of attempted amended complaints lacked standing and failed to allege specific harm on behalf of a true MAP. The court in dismissing the case sanctioned three lawyers at $5,000 per lawyer, as well as $5,000 against MSP Recovery itself. The total amount of the sanction was $20,000.

The lesson here is that not only are the MAPs becoming more aggressive in pursuing these claims but private law firms seeking to make this their primary purpose.

Bennett L. Pugh, JD
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