Class Certification Granted in Lawsuit Against Automobile Insurer USAA for Failing to Coordinate Benefits

On May 28, 2024, following a multi-day evidentiary hearing, Eleventh Judicial Circuit Court of Florida granted class certification in a significant lawsuit against USAA Casualty Insurance Company and USAA General Indemnity Company (collectively “USAA”). The case, brought by MSP Recovery Claims, Series LLC and MSPA Claims 1, LLC, centers on allegations that USAA’s actions, or lack thereof, contravene both state and federal laws, resulting in health payors shouldering the financial burden for accident-related medical expenses that USAA was primarily obligated to cover.

This systemic and class-wide failure to identify benefits, Plaintiffs assert, has caused and will continue to cause Plaintiffs, and all similarly situated Medicare Advantage Organizations (“MAOs”), Managed Care Organizations (“MCOs”), at risk first-tier and downstream entities, and their assignees, throughout the State of Florida (the “Class”), to pay for accident-related medical items and services for which USAA has a primary obligation to pay. Plaintiffs allege that USAA acted in violation of the law because USAA has, among other things, failed to provide required information to the members of the Class that would enable them to determine if USAA should have paid or otherwise reimbursed the Class members for certain payments.

In the action, Plaintiffs seek a declaration that: (1) USAA has not disclosed whether their members are also covered by health plans, nor if they have paid or reimbursed for accident-related medical services; (2) USAA has withheld critical policy information, hindering coordination of benefits and complicating reimbursement demands; and (3) USAA has imposed compliance with Sections § 627.736(5) and (10), Florida Statutes, that are irrelevant to reimbursement demands, causing further delays and complications. As to the pure bill of discovery, Plaintiffs seek information that is in the possession of USAA to properly coordinate benefits.

During the opening of the certification hearing on May 17, 2024, Plaintiffs’ lead counsel and founder of MSP Recovery Law Firm, John H. Ruiz, quoted the deposition testimony of USAA’s corporate representatives, revealing significant insights into the company's practices. One corporate representative admitted, “Adjusters do not ask” about Medicare Advantage coverage, highlighting a systemic issue within USAA's processes. Another representative acknowledged, “There is no process currently to reach out” to the health plan for claims related to the underlying claim, which underscores the company's failure to coordinate benefits properly with Medicare Advantage organizations.

As a result of automobile insurers like USAA failing to coordinate benefits, the plaintiffs developed a sophisticated data analytics system, now in collaboration with Palantir Technologies Inc., to capture and manage data demonstrating these failures. This system is a pivotal part of the evidence presented to the Court, showcasing the breadth and depth of the systemic issues at hand.

John H. Ruiz stated: “We are pleased with the court's decision to grant class certification, as it brings us one step closer to holding USAA accountable for its failure to fulfill its legal obligations. This case highlights the systemic issues that affect health payors and underscores the need for transparency and compliance with state and federal laws.” Ruiz further noted: “Our goal is to ensure that USAA and other insurers follow the law and fulfill their primary obligations, thus preventing unnecessary financial burdens on health payors and American tax payers.”

The court also issued an order to show cause why USAA’s counsel should not be held in contempt for lack of candor to the tribunal as alleged by Plaintiffs. The order set a hearing for June 28, 2024, during which opposing counsel will be required to show cause why it should not be sanctioned for the substantial alleged misrepresentations made by USAA’s counsel to the Court during the certification hearing and delineated by Plaintiffs’ motion.

The outcome of this case could have significant implications for the way insurance companies handle their reporting and coordination obligations under state and federal laws, potentially leading to greater transparency and accountability in the industry.

About MSP Recovery Law Firm

MSP Recovery Law Firm’s experienced attorneys have litigated hundreds of cases relating to insurance proceeds, federal, and state statutes. As far back as 1995, the firm’s attorneys have taken on and prevailed against some of the largest companies in the United States, including being selected as lead class counsel in numerous lawsuits against the nation’s automobile insurance companies. MSP Recovery Law Firm’s attorneys have the knowledge and experience to address even the most complicated and data-driven class actions. For more information, please visit: msprecoverylawfirm.com.

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“We are pleased with the court's decision to grant class certification, as it brings us one step closer to holding USAA accountable for its failure to fulfill its legal obligations."