CORAL GABLES, Fla., May 26, 2022 (GLOBE NEWSWIRE) — MSP Recovery, LLC’s (“MSP Recovery” or “MSPR”) Class A Common Stock began trading on May 24, 2022 on Nasdaq under the symbol “MSPR” following the completion of a business combination with Lionheart Acquisition Corporation II (“LCAP”). MSPR recently announced substantial business expansion through development of additional revenue streams, monetization of assignor interests, growth of assignors and existing business, and continued innovation. MSPR has also reaffirmed revenue guidance that will either match or surpass the $992 million in gross revenue for 2022 set forth in its models.
During the SPAC process and over the last 8 years, MSPR underwent significant due diligence and auditing of systems, technology, and financials. Every step of the way, MSPR’s business withstood that scrutiny and its business model has been vetted and underwritten by more than 150 entities such as health plans, providers and institutional investors throughout the country. “We encourage investors and the public to visit MSPR’s website where they can find MSPR’s SEC filings and press releases describing the business, claims portfolio, and recovery process,” said MSP Recovery Founder and CEO, John H. Ruiz.
Despite that process, Forbes recently published an article that “selectively reported on certain portions of MSPR’s public filings and was based on a faulty premise,” said Ruiz. Specifically, the Forbes piece stated that MSPR’s “central tension” is that it has not litigated its claims and therefore it is difficult to assess its monetary value. But MSPR’s SEC filings and court record filings demonstrate that MSPR’s claims and data processes have been substantiated by significant court victories – including evidentiary hearings, and state and federal trial and appellate courts – and have resulted in settlements and favorable court rulings.
MSPR’s recovery efforts have been ongoing since 2014 – when MSPR was originally founded and began trailblazing and revolutionizing the healthcare industry. In that short time frame, MSPR has already developed a book of business that by the end of 2021 amounted to more than $1.5 trillion in billed amount and $364.4 billion in paid amount. It has also innovated first of its kind, proprietary software systems, and has forged forward with litigation that has resulted in multiple significant victories establishing substantive law on healthcare claims data and the Medicare Secondary Payer Act. As stated in MSPR’s S4, settlement agreements to recover amounts in excess of the paid amount were entered into in MSPA Claims 1, LLC v. Ocean Harbor Cas. Ins. Co., Case No. 2015-1946-CA-01, and in MSP Recovery Claims, Series LLC v. Horace Mann Insurance Company, Case No. 1:20-cv-24419. And MSPR has also, through its relentless pursuit of recoveries, established critical substantive law in the area of its healthcare recoveries, including: (1) establishing that secondary payers have the ability to pursue recovery from primary payers for failing to make primary payment in accordance with a contractual obligation, without judgment or settlement agreement from separate proceeding (MSP Recovery, LLC v. Allstate Ins. Co., 835 F.3d 1351 (11th Cir. 2016)); (2) rejecting that the claims-filing provision imposing timeliness requirement as prerequisite to filing suit to seek reimbursement for payments made on behalf of Medicare beneficiary (MSPA Claims 1, LLC v. Kingsway Amigo Insurance Company, 950 F.3d 764 (11th Cir. 2020)); and (3) establishing that downstream actors that have made conditional payments in an MAO’s stead or that have reimbursed an MAO for its conditional payment to bring suit for double damages against the primary payer (MSP Recovery Claims, Series LLC v. ACE Am. Ins. Co., 974 F.3d 1305, 1316 (11th Cir. 2020)).
In Ocean Harbor, MSPR was granted class certification and obtained approval of a class action settlement agreement, pursuant to which, subject to certain time and threshold limitations, Ocean Harbor has agreed to pay more than the Medicare Fee-for-Service Schedule Rate by 3.5 times, for Medicare Part A emergency services and Medicare Part D claims, and by 1.6 times, for Medicare Part A non-emergency services, claims for MRI services and Medicare Part B claims. In Horace Mann, MSPR entered into a settlement agreement in which the defendant agreed to pay matched claims according to applicable commercial rates, subject to the assertion of certain agreed upon defenses. MSPR believes that “the difference between the paid amount of claims in that case and commercial rates would generally be between 4 to 6 times,” said Ruiz.
Moreover, as disclosed to the public on April 16, 2022, MSPR’s litigation efforts have resulted in significant progress toward settlement of claims with various liability insurers. Under the framework, liability insurers have agreed to exchange data – out of court – in pursuit of a full settlement of current no-fault litigation. Together with the law firms of Milberg Coleman Bryson Phillips Grossman, PLLC and Rivero Mestre, LLP – with which MSPR recently announced significant strategic alliances – more resources than ever are being committed to additional MSPR reimbursement recovery cases.
MSPR also recently announced significant additional revenue streams. MSPR acquires the assignments of its recoveries from health insurance payors, healthcare providers and self-funded entities, and uses its proprietary multi-level data analytics system to secure recoveries from responsible parties. MSPR typically pays the assignors 50% of such recoveries (the “Assignor Interest”) and retains the rest (the “MSPR Recovery Proceeds”).
Among the new potential sources of revenue, on September 30, 2021 MSPR announced an agreement providing for potential future transactions to monetize up to $3 billion of select healthcare claims recovery interests to Virage Capital Management LP (“Virage”). The Virage agreement presents an opportunity for MSPR to monetize the Assignor Interests (typically 50% of the total recovery amount) associated with select healthcare recovery claims, while preserving MSPR’s interests in the MSPR Recovery Proceeds. Indeed, MSPR has already reached an agreement to monetize an initial $275 million under the Virage agreement earmarked for acquisition of Assignor Interests. This additional recovery opportunity provides an additional potential avenue for MSPR to expand its revenue streams.
MSPR has several other new and expanding revenue streams, including but not limited to:
In addition to these new revenue streams, MSPR has continued to grow its primary business. As of December 31, 2021, MSPR’s portfolio included more than $1.5 trillion in billed amount (reflecting the full amount billed by a provider to a health plan or insurer), up more than 530% from $242 billion in 2020. MSPR’s portfolio included $364.4 billion in paid amount as of the same date (reflecting amounts actually paid to a provider from a health plan), up more than 520% from $58.4 billion in 2020. And since announcing the Business Combination in July 2021, MSPR has seen a significant increase in interest from various entities in the healthcare industry. During that time period alone, MSPR has: vetted 91 prospects; made proposals to 48 entities; conducted data diligence on 46 entities; generated a data evaluation report for 21 entities; and negotiated initial agreements with 20 entities. MSPR already has over 150 assignors, and continues to grow its number of assignors.
MSPR has also seen continued growth by way of the addition of data and assignments from university healthcare and hospital systems, as well as the expansion of assignments from significant self-funded healthcare plans that pay for their own claims. For example, MSPR recently entered into an assignment agreement with MasTec, Inc., the second largest Hispanic-owned company in the United States with over 20,000 employees in North America. MasTec companies have been involved in some of the largest and most complex infrastructure construction projects across the country and with such a large pool of employees across the country has paid significant numbers of claims across the country that should have been reimbursed.
“We continue experiencing substantial growth of our billed amounts, assigned claims and estimated paid amounts thanks to the growing recognition by healthcare providers and payers of our sophisticated and industry-leading legal, technological, and data expertise relating to pursuing recoveries on their behalf,” said MSP Recovery Founder and CEO, John H. Ruiz. “And we believe this growth puts us in a strong position to meet, and even beat, our financial models.”
MSPR’s substantial growth figures in paid amounts and billed amounts are even more significant in light of recently announced strategic alliances and progress towards the settlement of no-fault litigation, wherein various liability insurers have formally agreed to a framework to exchange data – out of court – in pursuit of a full settlement of current no-fault litigation.
“There is a growing recognition among healthcare providers and payers of the value of MSP Recovery’s innovative and effective identification and pursuit of reimbursement recoveries on their behalf, said Ophir Sternberg, Chairman and CEO of Lionheart. “MSP Recovery’s ability to identify, pursue and secure new revenue streams, incremental to the original business combination forecast, provides significant upside to LCAP shareholders,” added Sternberg.
MSPR expects significant continued growth as it continues expanding its lines of business and the scale of its existing business.
“We will continue to innovate and revolutionize the healthcare industry and bring all resources at MSP Recovery’s disposal to bear on solving these issues that have plagued the healthcare industry for years,” said Ruiz.
MSP Recovery’s Historical Overview as of Business Combination Announcement.
About MSP Recovery
Founded in 2014, MSP Recovery has become a Medicare, Medicaid, commercial, and secondary payer reimbursement recovery leader, disrupting the antiquated healthcare reimbursement system with data-driven solutions to secure recoveries against responsible parties. MSP Recovery provides the healthcare industry with comprehensive compliance solutions, while innovating technologies to help save lives. For more information, visit: www.msprecovery.com
About Lionheart Acquisition Corporation II
Lionheart Acquisition Corporation II was a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. For more information, visit: www.LCAP2.com.