United States District Court, N.D. Ohio, Eastern Division
OPINION AND ORDER
CHRISTOPHER A. BOYKO UNITED STATES DISTRICT JUDGE.
matter is before the Court on Defendant The Progressive
Corporation's (“Defendant”) Motion to Dismiss
(ECF DKT # 35). For the following reason, the Court grants
Defendant's Motion and dismisses the above-captioned
MAO-MSO Recovery II, LLC; MSP Recovery, LLC and MSPA Claims
I, LLC (collectively, “Plaintiffs”) filed this
putative class action suit against “Progressive
Corporation, its direct and indirect subsidiaries;
Progressive; Progressive Insurance; Progressive Casualty
Insurance Company; and Progressive Group of Insurance
Companies.” First Amended Complaint
(“FAC”). This case is one of several filed around
the country by Plaintiffs against various automobile
action arises under the Medicare Secondary Payer
(“MSP”) provisions of the Medicare Act, 42 U.S.C.
§ 1395, et seq. When the Medicare program was
enacted in 1965, Medicare “paid for all medical
treatment within its scope and left private insurers merely
to pick up whatever expenses remained.” Bio-Med.
Applications of Tennessee, Inc. v. Cent. States Southeast
& Southwest Areas Health and Welfare Fund, 656 F.3d
277, 278 (6th Cir. 2011). In 1980, Congress “inverted
that system” by “mak[ing] private insurers
covering the same treatment the ‘primary' payers
and Medicare the ‘secondary' payer” when
overlapping coverage exists. Id. Automobile
insurance plans may be primary payers under this system.
Stalley v. Methodist Healthcare, 517 F.3d 911, 915
(6th Cir. 2008). However, “[i]f the primary payer has
not paid and will not promptly do so... Medicare can
conditionally pay the cost of treatment.” Id.
MSP empowers Medicare to seek reimbursement for any
conditional medical payments from the primary payer... if it
is demonstrated that the primary payer has responsibility to
pay.” Id. The MSP also provides for a
“private right of action with double recovery to
encourage private parties who are aware of non-payment by
primary plans to bring actions to enforce Medicare's
1997, Congress created Medicare Part C, which allows for
private Medicare Advantage plans. 42 U.S.C. §§
1395w 21-28. Under this system, private insurers may become
Medicare Advantage Organizations (“MAOs”) and
administer Medicare benefits pursuant to contracts with the
Centers for Medicare and Medicaid Services
are entities which allege that they have been assigned
“all rights, title, and interest allowing them to bring
these claims” by several unspecified MAOs. FAC at 2,
n.2. Plaintiffs allege that Defendant provided no-fault
automobile insurance coverage, which obligated Defendant to
pay all medical expenses up to a certain threshold to several
Medicare enrollees. FAC ¶ 3. Plaintiffs thus contend
that Defendant was a primary payer and that the MAOs covering
these Medicare enrollees were secondary payers. FAC
¶¶ 3-4. Plaintiffs allege that Defendant failed to
pay medical bills that it was statutorily obligated to pay,
resulting in economic loss to Plaintiffs. FAC ¶ 4.
Plaintiffs assert claims for Double Damages under the Private
Right of Action established by the MSP in 42 U.S.C. §
1395y(b)(3)(A) and for Breach of Contract.
moves to dismiss Plaintiffs' claims for lack of
jurisdiction under Fed.R.Civ.P. 12(b)(1) and for failure to
state a claim under Fed.R.Civ.P. 12(b)(6). Defendant argues
that Plaintiffs' claims should be dismissed for lack of
subject matter jurisdiction because Plaintiffs do not have
Article III standing to pursue this lawsuit since they have
failed to plead an injury that is concrete and
particularized. Plaintiffs have similarly failed to allege
sufficient facts to connect any injury to Defendant.
Defendant contends that MAOs do not have any private right of
action under the MSP provisions of the Medicare Act.
Furthermore, even if MAOs did have a private right of action,
Defendant contends that the MAOs improperly made payments
before determining whether there was a primary payer, making
the payments illegal and not proper “conditional”
payments within the meaning of the MSP provisions.
Defendant also argues that the FAC fails to state a claim
upon which relief can be granted because “it is bereft
of even the most basic factual allegations” and
“does not identify a single claim that any MAO paid
conditionally.” Similarly, Plaintiffs have not alleged
any facts demonstrating the existence of valid assignments
between themselves and any MAO. Therefore, “the Amended
Complaint is a textbook example of a barebones pleading that
does not provide the Defendants fair notice of the
allegations against them, ” and the Court should
dismiss the FAC with prejudice.
contend that they represent MAOs, “who, for all
practical and legal purposes, stand in the same shoes as the
Centers for Medicare and Medicaid Services in providing
Medicare Benefits.” Therefore, if there is a primary
payer available, any payment made by MAOs is automatically
conditional, and MAOs are entitled to recover the payment
from the primary payer. Plaintiffs allege that there is a
pattern of “MAOs almost never ...