Appeals court dismisses claims over $286 hospital bill

By John Breslin | May 6, 2019

ATLANTA -- A federal appeals court has dismissed a suit by a Medicare claims company in an action over $286 that was paid by a Florida hospital group.

MSPA Claims sued St. Mary's Medical Center and its parent group, Tenet Florida, alleging they did not pay for seven months. The suit went all the way to the U.S. Court of Appeals for the 11th Circuit.

The appeals court dismissed the claim, ruling the laws relating to Medicare barred MSPA from suing the hospital.

Judge Amul Thaper, designated from the Sixth Circuit, wrote the opinion, beginning by citing a previous court opinion describing the Medicare statutes under consideration were “so incoherent [it] cannot be understood.”

"Luckily though, we need not venture very far into its tangled web here," Thaper said. "The Medicare provision at issue in this case is clear and clearly bars the plaintiff’s claim."

The case centered on a car accident that led to a woman being treated at the medical center in West Palm Beach.

She was covered by two plans, her private insurer, Allstate, and Florida Healthcare Plus (FHCP), a private organization that pays Medicare bills on behalf of the government. St. Mary's billed both, but paid back the latter,  although it took some months.

FHCP then handed the bill over to a claims company, La Ley Recovery Systems, which passed this on to a third, MSPA Claims 1, which sued the hospital and its parent group over the delayed payment of less than $300.

A federal district court granted Tenet's motion to dismiss. MSPA appealed, which turned on whether the claims company suffered a "concrete" injury due to the delayed payment of $286. The court found that it was concrete and the company had standing to sue.

But while it has standing, the appeals court had to decide whether it was "plausible on the merits to survive dismissal."

The laws covering Medicare payments only allows the claims company to sue a primary plan, not the medical providers. The suit failed because it was not "plausible on its face," the appeals court ruled.

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