MSP Recovery says Maryland Supreme Court affirms assignments
MSP Recovery announces a legal victory before the Supreme Court of Maryland. The Court upheld the validity of MSP Recovery's claim assignments from Medicare Advantage Organizations, rejecting arguments that the Company's assignment model violated Maryland public policy. The ruling enables MSP Recovery to proceed with its long-standing federal class action lawsuit against Government Employees Insurance Company. The case stems from two consolidated federal class actions filed in the U.S. District Court for the District of Maryland, where MSP Recovery, acting through its affiliates, seeks to recover thousands of conditional payments made by MAOs for medical expenses that GEICO was legally obligated to reimburse as the primary payer under the Medicare Secondary Payer Act. After the federal court rejected GEICO's standing challenge and denied GEICO's motion for summary judgment, it certified a legal question to the Maryland Supreme Court regarding whether MSP's assignments were void under Maryland's public policy. In a resounding and unanimous decision, the Maryland Supreme Court held that the assignments were valid and enforceable. The Court rejected GEICO's reliance on centuries-old doctrines of champerty, maintenance, and barratry, affirming that such concepts have no modern application under Maryland law. In doing so, the Court upheld the right of MAOs to assign reimbursement claims to entities like MSP Recovery for enforcement and recovery. The class action, which remains pending, seeks to hold GEICO accountable for systematically failing to reimburse Medicare Advantage Organizations for injury-related medical claims, despite being legally obligated to do so under federal law. As outlined in MSP Recovery's filings, including its brief to the Maryland Supreme Court and its pending motion for class certification, the Court directed the parties to conduct a court-supervised data-matching process to identify instances of non-reimbursement. In response, MSP conducted a comprehensive data matching analysis using GEICO's first- and third-party claims data spanning from March 2011 to July 2019. The multi-step matching protocol relied on unique identifiers-such as Social Security numbers and dates of injury-to compare MAO paid medical claims against GEICO's bodily injury settlements. This process revealed a substantial number of matches where GEICO had resolved claims but failed to reimburse the corresponding payments made by MAOs. MSP asserts that these findings, reviewed by third-party experts and conducted under rigorous methodological standards, support their contention that GEICO's failures were not isolated incidents, but indicative of a broader, systemic pattern of non-compliance with the Medicare Secondary Payer Act. Notably, and as previously announced by the Company, MSP has had a substantial number of additional claims assigned to it since the data matching. GEICO responded by, among other things, challenging the enforceability of MSP Recovery's assignments-an argument now rejected by Maryland's highest court. This Maryland Supreme Court ruling not only preserves MSP Recovery's ability to pursue recovery for its healthcare clients in Maryland but also reinforces the broader legality of its nationwide assignment-based recovery strategy. As GEICO and other major insurers face mounting exposure for years of non-compliance, the ruling is expected to have implications for related litigation across multiple jurisdictions.
