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Meek-Horton v. Trover Solutions, Inc.

United States District Court, S.D. New York

January 2, 2013

Rebecca MEEK-HORTON, et al., on behalf of themselves and all others similarly situated, Plaintiffs,
v.
TROVER SOLUTIONS, INC. d/b/a Healthcare Recoveries, et al., Defendants.

Howard R. Schatz, Silbowitz, Garafola, Silbowitz, Schatz & Frederick, LLP, New York, NY, for Plaintiffs' Lead Counsel.

Richard W. Cohen (argued), Gerald Lawrence, Uriel Rabinovitz, Lowey Dannenberg Cohen & Hart, P.C., White Plains, NY, for Defendants Aetna Health Plans; Group Health Incorporated, Inc.; HIP of New York, Inc.; HIP of Greater New York, Inc.; and The Rawlings Company, LLC.

Harold N. Iselin, Greenberg Traurig LLP, Albany, NY, for Defendants First Recovery Group, LLC; American Progressive Life & Health Insurance Company of New York; HealthFirst, Inc.; and WellCare Health Plans, Inc.

Charles E. Bachman, O'Melveny & Myers, Times Square Tower, New York, NY, for Defendants United Healthcare of New York, Inc.; Oxford Health Plans (NY), Inc.; Ingenix, Inc.

Page 487

Shawn J. Rabin, Susman Godfrey, New York, NY, for Trover Solutions, Inc.

Kathleen Taylor Sooy, Washington DC, for Defendants Empire HealthChoice Assurance, Inc.; and Meridian Resource Co., LLC.

AMENDED OPINION AND ORDER

ROBERT P. PATTERSON, JR., District Judge.

On August 1, 2011, Plaintiff Rebecca Meek-Horton commenced this action on behalf of herself and others similarly situated (" Plaintiffs" ) against forty health care insurers that offer Medicare Advantage Plans (" MA Plans" ) (" Defendants" ) by filing a putative class action complaint in the Supreme Court of the State of New York, New York County. On August 29, 2011, Defendants filed a notice to remove the action from state court pursuant to the Class Action Fairness Act. See 28 U.S.C. § 1332(d).

On October 7, 2011, an Amended Complaint was filed on behalf of Plaintiffs. Subsequently, Plaintiffs agreed to dismiss a number of Defendants from the action. The fifteen remaining Defendants move to dismiss the Amended Complaint pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction or, alternatively, pursuant to Rule 12(b)(6) for failure to state a claim upon which relief may be granted. For the following reasons, Defendants' motion to dismiss is granted.

I. Background

Plaintiffs allege that they are a class of Medicare-eligible individuals who enrolled in MA Plans and received medical benefits pursuant to Part C of the Medicare Program. (Am. Compl. ¶ 1; Pls.' Mem. of Law in Opp'n to Defs.' Mot. to Dismiss (" Pls.' Mem." ) at 1, ECF No. 95.) Plaintiffs also allege that they are a class of individuals who, as a result of bringing personal injury and wrongful death lawsuits in New York State courts, have received monetary settlements from third party tortfeasors. (Am. Compl. ¶ 1.)

Defendants are private health care insurers [1] that administer MA Plans. ( Id. ) Defendants have pursued, or are pursuing, reimbursement for medical benefits paid to Plaintiffs by placing liens upon the personal injury or wrongful death settlements received by Plaintiffs from third party tortfeasors. ( Id. ) Plaintiffs contest Defendants' right to do so, alleging that these reimbursement claims violate Section 5-335 of the New York General Obligations Law (" GOL" ). ( Id. ¶¶ 195, 198, 204, 207.) Plaintiffs' action seeks restitution of all monies wrongfully collected by Defendants and a permanent injunction " directing defendants to cease and desist from continuing to assert and collect liens, subrogation rights, and/or reimbursement rights" against anyone covered by a MA Plan who settles a New York personal injury or wrongful death claim. ( Id. ¶¶ 204, 207.)

A. The Medicare Advantage Program

Medicare is a federally funded program established in 1965 as part of the Social Security Act that aims to provide medical care for individuals who (1) are more than 65 years of age, (2) have received Social Security disability benefits for at least 24 months, or (3) have end-stage renal disease. See 42 U.S.C. § 1395c. Prior to 1980, Medicare served as the primary payer for those eligible to enroll in the program. In 1980, however, Congress attempted to curb the rising costs of the

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program by enacting the Medicare Secondary Payer Act (" MSPA" ). In certain circumstances, the MSPA makes Medicare the " secondary payer" in relation to certain other sources, which are considered " primary payers." 42 U.S.C. § 1395y(b)(2)(A); see also Potts v. Rawlings Co., LLC, No. 11 CV ...


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