A Florida appeals court has pushed back on a company’s application of a little-used legal practice and cast a shadow on the business practices it uses to secure Medicare reimbursements.
The Third District Court of Appeal on Jan. 11 affirmed a trial court’s dismissal of a complaint filed by MSP Recovery Inc., which works to secure reimbursement recovery on Medicare and Medicaid claims. The lawsuit was filed against Coloplast Corp., which manufactures and sells surgical mesh products that MSP contends caused injuries to some Florida residents.
The appeals court affirmed the trial court’s dismissal order of MSP’s second amended complaint but did not comment in detail about the trial court's finding that MSP failed to state a cause of action for a pure bill of discovery. That's a rarely used legal action which seeks the disclosure of facts and information known to a defendant. The lower court concluded that it lacked jurisdiction over Coloplast.
“The appellate court was correct to affirm the dismissal of the complaint,” William Large, president of the Florida Justice Reform Institute, said in an email to the Florida Record. “Litigation should work as follows: sue first, discover second. MSP has a business model of discover first, sue second. That business model is no longer tenable in Florida.”
MSP argued that the trial court had personal jurisdiction over Coloplast based on provisions of Florida’s long-arm statute, which grants state courts authority over defendants in other states provided the defendants take part in “substantial” activities in Florida.
MSP also alleged that Coloplast caused personal injury to state residents as well as torts. But the appeals court rejected those arguments, saying Coloplast did not “commit any torts against Medicare individually” and describing the lawsuit as a Medicare reimbursement case as opposed to a personal injury action.
“MSP Recovery is nothing more than a litigation shell company,” Large said. “It provides no medical or insurance services to Medicare beneficiaries. MSP Recovery acquires claims from its assignors and utilizes its data analytics services to identify alleged improper payments for health care services.”
He also agreed with the appeals court that MSP practices failed to establish jurisdiction under Florida law.
“In this case, MSP has conflated the alleged physical injuries suffered by individuals, who were not parties to the case, with the alleged financial injuries that MSP claims to have been assigned,” Large said. “This is insufficient to secure jurisdiction under Florida’s long-arm statute.”