American Choice Healthcare, LLC v. Coverys Specialty Insurance Company

CourtDistrict Court, S.D. Florida
DecidedSeptember 4, 2025
Docket1:24-cv-22324
StatusUnknown

This text of American Choice Healthcare, LLC v. Coverys Specialty Insurance Company (American Choice Healthcare, LLC v. Coverys Specialty Insurance Company) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Choice Healthcare, LLC v. Coverys Specialty Insurance Company, (S.D. Fla. 2025).

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

CASE NO. 24-22324-CIV-ALTONAGA/Reid

AMERICAN CHOICE HEALTHCARE, LLC,

Plaintiff, v.

COVERYS SPECIALTY INSURANCE COMPANY,

Defendant. _______________________/

ORDER THIS CAUSE came before the Court on Defendant, Coverys Specialty Insurance Company’s Motion to Alter/Amend Judgment, or, Alternatively, Motion for Remittitur (“Alter & Remittitur Mot.”) [ECF No. 137] and Renewed Motion for Judgment as a Matter of Law and Motion for a New Trial (“RJMOL & New Trial Mot.”) [ECF No. 138], both filed on June 26, 2025. Plaintiff, American Choice Healthcare, LLC filed Responses in Opposition ([ECF Nos. 143 and 145], respectively), to which Defendant filed Replies ([ECF Nos. 153 and 154], respectively). The Court has carefully considered the parties’ submissions, the record, and applicable law. For the following reasons, the Motions are denied. I. BACKGROUND Plaintiff is a Florida-based group of physicians that participated in the Center for Medicare & Medicaid Service’s (“CMS[’s]”) 2021 Global and Professional Direct Contracting Model (“GPDC Model”) — a program designed to serve Medicare fee-for-service beneficiaries. (See Am. Compl. [ECF No. 31] ¶¶ 3, 11, 19). Under the GPDC Model, CMS set a “benchmark” estimating Plaintiff’s annual cost of care for Medicare patients in 2021. (See id. ¶¶ 12–13). If Plaintiff spent less than the benchmark, it kept the surplus; if Plaintiff spent more than the benchmark, it owed the excess to CMS. (See id.). Plaintiff mitigated that risk by purchasing two types of insurance policies. (See id. ¶¶ 21– 22). From non-party HM Life Insurance Company (“HM”), Plaintiff obtained a “specific stop-

loss” policy (the “HM Policy”). (Id. ¶ 26). The HM Policy applied on a per-patient basis: each Medicare beneficiary had a deductible, and HM reimbursed any amount above that threshold. (See id. ¶ 26). From Defendant, Plaintiff purchased an “aggregate stop-loss policy” (the “Coverys Policy” or the “Policy”), which capped Plaintiff’s total liability at the CMS benchmark. (See id. ¶ 27). The parties used intermediaries to negotiate the Coverys Policy: Defendant engaged Archway Health LLC (“Archway”) as its producer (see generally Joint Ex. List [ECF No. 132], Joint Ex., 1 Producer Agreement [ECF No. 132-1]); and Plaintiff retained Risk Strategies Company (“Risk Strategies”) as its broker (see Am. Compl. ¶ 22). During negotiations, one of Archway’s employees, Vince Micucci, represented that Defendant

would not reduce any reimbursements under the Coverys Policy based on recoveries from a separate specific stop-loss insurance policy. (See Am. Compl. ¶ 25). Relying on that representation, an employee of Risk Strategies emailed Archway on June 8, 2021 to confirm Plaintiff’s intent to bind coverage at specified premium levels, with a deductible of $1.8 million. (See id. ¶¶ 43, 55). The email included a statement that “[p]ayment does not take into account or offset for any specific stop loss recoveries” (the “No-Offset Statement”). (Joint Ex. List, Pl. Ex. 6, Micucci-Phillips Emails [ECF No. 132-32] 3 (alteration added); see also Am. Compl. ¶¶ 24, 41). Archway forwarded the email to Defendant; and Defendant issued a binder, followed by the Coverys Policy. (See Am. Compl. ¶¶ 28–29; see also generally Joint Ex. List, Joint Ex. 2, Coverys Policy [ECF No. 132-2]). The Coverys Policy defines “Policy” to include “Policy Applications” — which encompasses “each application, together with [your agreement] and all . . . other documents submitted to [Defendant] by or on behalf of [Plaintiff] in connection with the underwriting or issuance of this Policy, including any endorsements.” (Coverys Policy 5 (alterations added)). The

Policy also contains a clause purporting to allow offsets for other insurance: Other Insurance. This POLICY is excess over, and shall not contribute with, any OTHER INSURANCE. . . . When this POLICY is excess over any OTHER INSURANCE, WE shall not reimburse YOU for any SHARED LOSS AMOUNT which exceeds YOUR actual expenses that are otherwise reimbursable under this POLICY and applicable OTHER INSURANCE.

(the “Other-Insurance Clause”) (Coverys Policy 8–9 (alteration added)). Over the 2021 contract term with CMS, Plaintiff exceeded the benchmark by $7,852,035.46 and owed that amount to CMS. (See Am. Compl. ¶ 33). Plaintiff submitted a claim under the Coverys Policy for $6,052.035.46 — the amount it owed to CMS minus the Coverys Policy’s $1.8 million deductible (see id.) — but Defendant paid only $4,506,712.06. (See id. ¶ 34). Notwithstanding Micucci’s representation that Defendant would not reduce reimbursements to account for recoveries under a specific stop-loss policy, Defendant insisted that the Other-Insurance Clause allowed it to reduce coverage to account for (1) a $773,456.08 payment Plaintiff received under the HM Policy; and (2) a $771,867.32 deductible Plaintiff paid under the HM Policy. Plaintiff disputed the reduction, and this lawsuit followed. In the Amended Complaint, Plaintiff asserted two claims for relief: breach of contract (Count I) (see id. ¶¶ 36–48); and, in the alternative, promissory estoppel (Count II) (see id. ¶¶ 49– 56). The parties cross-moved for summary judgment (see generally Mots. for Summary J. [ECF Nos. 52, 54]), and the Court denied the motions, explaining that disputed issues of fact precluded summary judgment for either party (see generally Apr. 30, 2025 Order [ECF No. 94]). One key dispute involved whether the June 8, 2021 email from Risk Strategies to Archway became part of the Coverys Policy under its definition of “Policy.” That issue turned on two questions: (1) whether Plaintiff submitted an “application”; and (2) whether the email was a document “submitted to Defendant by or on behalf of Plaintiff in connection with the underwriting or issuance of” the Policy. (Final J. [ECF No. 131] 3 (alterations adopted; citation and quotation marks omitted)).1

During the parties’ three-day jury trial, Defendant asked the jury the second question, but not the first. (See generally Verdict [ECF No. 28]; see also generally May 19–21, 2025 Minute Entries [ECF Nos. 122, 125–26]).2 At the close of Plaintiff’s case-in-chief, Defendant moved for judgment as a matter of law under Federal Rule of Civil Procedure 50(a), and the Court denied the motion. The jury subsequently found in favor of Plaintiff and against Defendant on six factual questions related to Plaintiff’s claims. (See generally Verdict). Notably, the jury found the June 8, 2021 email was a document submitted to Defendant on behalf of Plaintiff in connection with the underwriting or issuance of the Policy. (See id. 1). On May 29, 2025, the Court entered Final Judgment, awarding Plaintiff the sum of

$1,545,323.40 based on the jury’s factual findings and the Court’s analysis of relevant legal authority. (See generally Final J.). Because the jury found the June 8, 2021 email was a “document submitted to” Defendant, the Court determined the Coverys Policy incorporated the No-Offset Statement via the definition of “Policy.” (Id. 3 (citations and quotation marks omitted)). That incorporation introduced ambiguity and a potential conflict with the Other-Insurance Clause,

1 The Court uses the pagination generated by the electronic CM/ECF database, which appears in the headers of all court filings.

2 By choosing not to pose the first question to the jury, Defendant waived its right to a jury verdict on that issue. (See generally Verdict); Fed. R. Civ. P. 49(a)(3). requiring the Court to resolve coverage — and award judgment on Plaintiff’s breach-of-contract claim — in favor of Plaintiff. (See id. 3–4 (citations omitted)).

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American Choice Healthcare, LLC v. Coverys Specialty Insurance Company, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-choice-healthcare-llc-v-coverys-specialty-insurance-company-flsd-2025.