By William Rabb

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A Florida law firm that has made a lucrative business out of the Medicare Secondary Payer Act – and disrupted the auto insurance industry in the process – has scored another victory at the federal appeals court level.

The 11th U.S. Circuit Court of Appeals decided this week that a lower court had erred when it dismissed a lawsuit brought by MSP Recovery against Metropolitan General Insurance Co. and its sister companies. The defendants are auto and liability insurers and subsidiaries of MetLife Inc.

“We hold that at this procedural stage, MSP Recovery’s complaint plausibly alleged that defendants had a demonstrated responsibility to pay the claims, and we therefore reverse and remand this case to the district court for further proceedings…” reads the opinion, written by Judge Barbara Lagoa.


MSP Recovery was founded by Coral Gables attorney and entrepreneur John Ruiz, who has become something close to a billionaire, according to news reports. It is a law firm that acts as a collection agency, working on behalf of health insurers who provide Medicare Part C plans, also known as Medicare Advantage, to Medicare beneficiaries. As the court explained, the Medicare Secondary Payer Act was enacted in 1980, as a way to save money for the government health plan that covers older Americans.

When Medicare beneficiaries are injured in a car crash, the law requires that their no-fault auto insurer pay its share for the medical care. Until the Act was adopted, Medicare had often paid for everything, even if the auto insurance policy obligated the insurance company to cover much of the treatment.

Although the law has been in effect for more than four decades, it has only been in recent years that MSP and Ruiz have figured out a way to earn large fees by suing auto insurers after Part C insurers said they weren’t getting reimbursed properly for the medical costs. The Medicare Secondary Payer Act allows private causes of action lawsuits and double damages as a way to enforce the law.

Insurers have said that most of the unpaid obligations are relatively small amounts and that Ruiz and his firm are piling up large fees – and legal costs for defendants – for no great benefit to Medicare or Medicare Advantage health insurers.

But the appeals court has been seeing things MSP’s way. In the last five years, the 11th Circuit, which hears appeals from federal district courts in Florida and much of the Southeast, has upheld MSP Recovery’s claims, overturning 12 lower court dismissals of the lawsuits, MSP said in a statement.

Sponsored by Florida Surplus Lines Service Office (FSLSO)

The latest decision could have a lasting impact on the auto insurance industry, the law firm said.

“MSP Recovery believes that the decision rendered by the 11th Circuit in Metropolitan has broader implications because several other Southern District Court judges have dismissed, or partially dismissed, claims asserted by MSP Recovery in several other pending lawsuits that remain on file,” the company said in a news release. “MSP Recovery believes that this latest ruling from the 11th Circuit will likely impact the scope of the claims being litigated in those actions.”

In December, a Florida state court in Miami also found in favor of MSP, sanctioning an insurer for failing to turn over data that could show it was shifting costs to Medicare.

The secondary payer law notes that plaintiffs must show that auto insurers had a “demonstrated responsibility” as primary payer for the Medicare beneficiaries’ medical costs. The 11th Circuit has held that can be shown through various means, including auto insurers’ policies, which are contractual obligations, or settlement agreements with their insureds who are Medicare recipients.

In the Metropolitan General case, MSP said it identified thousands of instances in which the defendant insurers failed to pay or pay timely, forcing the Medicare Advantage organizations to cover the bills. The firm did this by comparing the Advantage plans’ claims data with the insurers’ own filings with the Centers for Medicare and Medicaid Services, the court opinion explained.

The U.S. District Court for the Southern District of Florida in 2020 found that MSP Recovery had not proved its case, largely because the specific instances of non-payments by auto insurers were listed in an exhibit, not in the actual lawsuit complaint. Metropolitan’s attorneys also argued that the insurance policies, contractual obligations and settlements were insufficient to demonstrate that the insurers had a responsibility to pay first.

Judge Lagoa and the other judges in the three-judge panel disagreed, noting that MSP said the examples were too numerous to allege in the complaint.

“We concluded that the district court erred in failing to consider whether the complaint and Exhibit A, taken together, plausibly allege that defendants’ responsibilty to pay had been demonstrated,” the court wrote.

Quoting from its own 2019 decision in another MSP case, the court noted that the Medicare Secondary Payer Act “as a whole is remarkably abstruse, (but) the private cause of action is remarkably simple.”