What changed in this filing

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Item 1. Business

2025-04-16 compared with 2024-04-15 · 124 added, 196 removed, 230 unchanged (58% of the section changed)

Industry Overview

Our business is directly related to the healthcare industry and is affected by healthcare spending and complexity in the healthcare industry.

Our business is directly related to the healthcare industry and is affected by healthcare spending and complexity in the healthcare data industry.

The market for healthcare data and healthcare claims recovery solutions is large and growing.

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Our primary focus is on the Medicare and Medicaid market segments.

Medicare is the second largest government program, with estimated annual expenditures during 2022 of approximately $944.3 billion for approximately 65.5 million enrollees.

Medicare is the third largest government program, with estimated annual expenditures during 2023 of approximately $1,029.8 billion for approximately 68.0 million enrollees.

Medicaid has a combined estimated annual expenditure during 2023 of approximately $871.7 billion for approximately 88.5 million enrollees.

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CMS has projected that health spending will continue to grow at an average rate of 5.6% a year between 2023 and 2032.

The Office of the Actuary of CMS estimates that the NHE will amount to $6.2 trillion, accounting for 19.7% of the GDP by 2028, and is projected to grow 1.1% faster than the GDP between 2019 and 2028.

The Office of the Actuary of CMS estimates that the NHE equal 19.7% of the GDP by 2032, and is projected to grow 1.4% faster than the GDP between 2023 and 2032.

We also believe reimbursement models may become more complex as healthcare payers accommodate new markets and lines of business and as advancements in medical care increase the number of testing and treatment options available.

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Business Overview

We are a leading healthcare recovery and data analytics company.

We focus on the Medicare, Medicaid, and commercial insurance spaces.

We are disrupting the antiquated healthcare reimbursement system, using data and analytics to identify and recover improper payments made by Medicare, Medicaid, and commercial health insurers.

MSP Recovery is a leading healthcare reimbursement recovery and data analytics company, providing historical and Near Real-Time solutions for payers, providers, and patients.

We are disrupting the antiquated healthcare reimbursement system by discovering losses and recovering improper payments for Medicare, Medicaid, and commercial health insurers, and innovating technologies and comprehensive services for multiple industries, including healthcare and legal.

Medicare and Medicaid are payers of last resort.

Too often, they end up being the first and only payers, because the responsible payer is not identified or billed.

As Medicare and Medicaid pay a far lower rate than what other insurers are often billed, this costs the healthcare system (and the supporting taxpayers) tens of billions of dollars a year in improper billing and lost recoveries.

By discovering, quantifying, and settling the billed-to-paid gap on a large-scale basis, the Company is positioned to generate meaningful annual recovery revenue at high profit margins.

Our access to large volumes of data, sophisticated data analytics, and a leading technology platform provide a unique opportunity to discover and recover Claims.

We have developed Algorithms to identify waste, fraud, and abuse in the Medicare, Medicaid, and commercial health insurance segments.

Our access to large volumes of data, our sophisticated data analytics platform, and advanced technology provide a unique opportunity to discover and recover improper healthcare Claims payments.

We have developed Algorithms to identify waste, fraud, and abuse in the Medicare, Medicaid, and commercial health insurance sectors.

Our team of experienced data scientists and medical professionals analyze historical medical Claims data to identify recoverable opportunities.

Once potential recoveries are reviewed by our team, they are aggregated and pursued.

Pursuant to statute and case law, we believe we have an established basis for future recoveries.

We differ from our competitors as we receive our recovery rights through irrevocable assignments of Claims.

As assignees of recovery rights, we assume risks that our competitors do not.

Rather than provide services under third-party vendor services contracts, we receive the rights to certain recovery proceeds from our Assignors’ Claims (and, in most cases, take assignment of the Claims themselves, allowing us to step into the Assignors’ shoes).

Through statutory law and case law, we believe we have an established basis for future recoveries.

We differ from our competitors as we receive our recovery rights through irrevocable assignments of Claims from our Assignors.

As assignees, we assume risk that our competitors do not.

Rather than provide services under a third-party vendor services contract, we receive the rights to certain recovery proceeds from our Assignors’ Claims.

As we, or our affiliated entities, are assigned recovery rights associated with Claims, we are the plaintiff in any action filed and therefore exercise control over the direction of the litigation.

By receiving Claims through assignment, we can pursue additional recoveries under legal theories.

Although we own recovery rights to pursue recoveries on the assigned Claims, for a significant portion of those Claims assigned, our ability to pursue recoveries depends on our ongoing access to data associated with those Claims through data access rights granted to us.

By receiving Claims through assignment, we can pursue additional recoveries under numerous legal theories that our competitors cannot.

Although we own the assigned Claims, for a significant portion of assigned Claims, our ability to pursue recoveries depends on our ongoing access to data associated with those Claims through data access rights granted to us.

The termination of said data access rights would substantially impair our ability to generate recoveries on those Claims.

Our current Claims portfolio has scaled significantly.

We are entitled to a portion of any recovery rights associated with approximately $1,591 billion in Billed Amount (and approximately $380 billion in Paid Amount), which contains approximately $87.7 billion in Paid Value of Potentially Recoverable Claims, as of December 31, 2024.

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Due to the sensitive nature of the data we receive from

our Assignors, we ensure that our data systems comply with the security and privacy mandates by federal law.

In April 2022, a HITRUST authorized External Assessor Organization and AICPA member firm (the “Assessor”) completed independent assessments of MSP Recovery’s system.

These independent assessments verified that we met the healthcare industry’s highest standards in protecting healthcare information and mitigating this risk, including compliance with HIPAA rules and regulations.

On March 2, 2023, the Assessor provided MSP Recovery a report demonstrating that our data recovery system’s commitments and system requirements meet or exceed the stringent SOC 2 Type II applicable trust services criteria.

our Assignors, we ensure that our data systems comply with the security and privacy mandated by federal law.

In 2023, the Company engaged a HITRUST Authorized External Assessor and AICPA member firm, which completed independent assessments of MSP Recovery’s system.

On October 13, 2023, HITRUST certified that the platforms, facilities, and supporting infrastructure of our organization meet the HITRUST CSF® v11 Implemented, 1-year (i1) certification criteria.

For our cloud computing services, we currently use Amazon Web Services (“AWS”) which is also HITRUST certified.

Company History

In April 2014, MSP Recovery’s predecessor, La Ley Recovery Systems, entered into its first assignment agreement.

Later that year, MSP Recovery was founded to provide data driven solutions, and La Ley Recovery Systems filed its first lawsuit against a primary payer—Allstate Insurance Company.

In late 2014, we entered into assignment agreements with our second and third Assignors.

To date, we have over 160 Assignors.

Since 2014, we have achieved significant legal victories, including several significant federal appellate court wins.

In these opinions, the courts agreed with us on a variety of key issues, holding that:

• downstream entities, such as MSOs and IPAs have standing to sue primary plans under the MSP Laws;

• a settlement agreement with a Medicare beneficiary is evidence of constructive knowledge that the primary payer had reimbursement obligations.

On May 23, 2022, the Company (formerly LCAP) consummated the Business Combination pursuant to the MIPA.

Pursuant to the MIPA, the Members sold and assigned all of their membership interests in Legacy MSP to the Company in exchange for Up-C Units.

For more information about the Business Combination, refer to Note 3, Business Combination, to the consolidated financial statements included elsewhere in this Annual Report.

In January 2022, the Company launched LifeWallet, a versatile, scalable, and expandable data ecosystem, where tokenized data is stored in a secure, user friendly platform with multiple applications.

A number of applications currently in development will be powered by LifeWallet.

Business Model

Recovery Model

We receive irrevocable assignments of health Claims recovery rights through CCRAs from a variety of sources including, but not limited to, MAOs, MSOs, HMOs, hospitals, and other at-risk entities.

Prior to executing a CCRA, we utilize our proprietary internal data analytics platform to review the set of Claims and identify Claims with probable recovery paths.

Once Claims have been assigned, our data analysts run proprietary Algorithms to identify potential recoveries.

On June 14, 2024, an Independent Service Auditor provided MSP Recovery a report opining that our data recovery system’s commitments and system requirements meet or exceed the stringent SOC 2 Type II applicable trust services criteria.

Recovery Business Model

Discover Losses/Recover Reimbursements

We receive irrevocable assignments of health Claims recovery rights through CCRA from a variety of sources including, but not limited to, MAOs, MSOs, HMOs, hospitals, and other at-risk entities.

We utilize our proprietary internal data analytics platform to review healthcare Claims and identify Claims with probable recovery paths.

Once Claims are assigned, our data analysts run proprietary Algorithms to identify potential recoveries.

Results are then quality checked by our internal medical team.

We contract with Law Firm and other law firms to pursue recoveries through the legal system.

Where appropriate, Law Firm contacts primary payers to demand payment of amounts owed.

We contract with the Law Firm and other law firms across the country to pursue recoveries through the legal system.

Where appropriate, the Law Firm contacts primary payers to demand payment of amounts owed.

Prior to litigation, there may be an incentive for the primary insurer to settle as, pursuant to the Medicare Secondary Payer Act, an action for damages in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) shall be in an amount double the amount otherwise provided.

We engage with each Assignor independently.

We are typically entitled to 100% of recoveries pursuant to our CCRAs.

From those recoveries, we are typically contractually obligated to pay 50% of Net Proceeds to the Assignor.

In certain cases, we have purchased the Assignor’s rights to recovery proceeds in advance of any collection;

therefore, entitling the Company to retain 100% of the Net Proceeds.

The “Net Proceeds” of any assigned Claim is defined as the gross amount recovered on an assigned Claim, minus any costs directly traceable to such assigned Claim(s) for which recovery was made.

We are generally entitled to 100% of recoveries pursuant to our CCRAs;

from those recoveries, we are typically obligated to pay 50% of Net Proceeds to the Assignor.

In certain cases, we have purchased the Assignor’s rights to recovery proceeds in advance of any collection, thus entitling the Company to retain 100% of the Net Proceeds.

In some instances, we may purchase outright an Assignor’s recovery rights;

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Such sales include variable consideration in the form of payments that will be made only upon achievement of certain recoveries or based on a percentage of actual recoveries.

We have not yet generated substantial revenue from the recovery model.

To date, the majority of our revenue has been generated by Claims recovery services which are either performance-based or fee for service arrangements as described below.

Over time, the Company believes that a large part of the flaws that exist in the marketplace can be significantly improved by the solutions that can be achieved by our “Chase to Pay” model.

Chase to Pay is a near real-time analytics driven platform that identifies the proper primary insurer at the point of care or close enough in proximity for payers to determine primary and secondary payers.

Chase to Pay is intended to plug into near real-time medical utilization platforms used by providers at the points of care.

Rather than allow an

MAO to make a wrongful payment whereby the payer needs to chase down the primary payer and collect a reimbursement for the MAO, Chase to Pay is intended to prevent the MAO from making a wrongful payment and ensure that the correct payer pays in the first instance.

Furthermore, the primary payer typically will make payments at a higher multiple than the MAO would have paid, and MSP will be entitled to receive its portion of the recovery proceeds on the amounts paid by the primary payer.

Chase to Pay is powered, in part, by Palantir Technologies’ Foundry platform utilizing LifeWallet’s industry knowledge.

As Chase to Pay works at or around the point of care, it is expected to substantially decrease legal costs of recovery.

As a result, when implemented, Chase to Pay is expected to improve the net recovery margin as the recovery multiple grows and variable legal costs to recover decline.

As a result of having already received data from 28 insurance carriers for historical claims, and based on the agreement with said carriers to receive data daily therefrom for one year from the date of the settlement, the Chase to Pay model can be utilized.

Although we have not yet generated revenue from this model, some customers send data to LifeWallet on a daily, monthly, or quarterly basis.

The Company is working to increase the number of customers that provide daily data outputs.

We are currently in the process of determining the pricing and form of these arrangements.

As part of our “Chase to Pay” model, we launched LifeWallet in January 2022, a platform powered by our sophisticated data analytics, designed to locate and organize users’ medical records, facilitating efficient access to enable informed decision-making and improved patient care.

See the section entitled The LifeWallet Ecosystem for more information about Chase to Pay.

In other cases, the Company has pledged proceeds which are due to the Company to repay certain obligations, such as the Purchase Money Loan, the Working Capital Credit Facility, and the MTA.

We have yet to generate substantial revenue from the recovery model.

Claims Recovery Services

We may also recognize Claims recovery service revenue from our services to customers to assist those entities with the pursuit of Claims recovery rights.

We provide services to other parties in identifying recoverable Claims as well as provide data matching and legal services.

We may also recognize Claims recovery service revenue from our services to clients, assisting entities with the pursuit of Claims recovery rights by identifying recoverable Claims and providing data matching and legal services.

Under our Claims recovery services model, we do not own the rights to Claims but provide our services for a fee based on budgeted expenses for the month with an adjustment for the variance between budget and actual expense from the prior month.

Pursuant to that certain Recovery Services Agreement (the “MSP RH Series 01 Recovery Services Agreement”), dated as of October 23, 2020, by and between MSP Recovery Holdings Series 01, LLC (“MSP RH Series 01”) and MSP Recovery, MSP Recovery provided services including identifying, processing, prosecuting, and recovering money for certain Claims of MSP RH Series 01.

In return for these services, MSP RH Series 01 paid a one-time fee of approximately $7.2 million and paid annual service fees of approximately $3.0 million commencing January 1, 2021, subject to adjustment based on the aggregate value of Claims of MSP RH Series 01 that is subject to the MSP RH Series 01 Recovery Services Agreement.

On March 29, 2023, this service fee agreement was terminated in connection with the series of agreements discussed in further detail in the Hazel Transactions section of Note 4, Asset Acquisitions, to the consolidated financial statements included elsewhere in this Annual Report.

See also Note 2, Basis of Presentation and Summary of Significant Accounting Policies , to the consolidated financial statements included elsewhere in this Annual Report.

The fees received pursuant to this agreement are related to expenses incurred and are not tied to the Billed Amount or potential recovery amounts.

Although we believe our future business to be highly tied to the recovery model and Chase to Pay, we will continue to enter into these contracts as the market dictates.

Medicare and the MSP Law

The fees received pursuant to a Claims recovery service agreement are related to expenses incurred and are not tied to the Billed Amount or potential recovery amounts.

Although we believe our future business to be highly tied to the recovery model and Chase to Pay, we may enter into these contracts as the market dictates.

The Company did not recognize any Claims recovery service income during the year ended December 31, 2024.

Industry Solutions

The MSP Ecosystem

MSP Recovery has developed a comprehensive ecosystem to enhance healthcare reimbursement processes, integrating advanced data analytics, Near Real-Time insights, and technological tools to provide connectivity between property and casualty insurers, health plans, providers, patients, and stakeholders.

This integrated ecosystem analyzes dates from a variety of sources to identify responsible parties, assist providers in receiving reasonable and customary rates for accident-related treatment, shorten the collection time frame, and increase revenue visibility and predictability for its users.

The Chase to Pay platform was designed to significantly improve payment accuracy in our fragmented healthcare system.

Chase to Pay is a near real-time analytics driven platform that identifies the proper primary insurer at or near the point of care, helping to determine primary and secondary payers.

Chase to Pay is intended to integrate with medical utilization platforms used by providers during patient care and treatment.

Rather than allow a wrongful payment whereby the secondary payer needs to chase down the primary payer to collect a reimbursement, Chase to Pay helps to prevent wrongful payments in the first place, and ensures that the correct payer pays.

Furthermore, as primary payers typically pay a negotiated or commercially reasonable rate, rather than the deeply discounted Medicare rate;

the Company is entitled to pursue the full amount that primary payer would have been responsible to pay, had they paid in the first instance.

As Chase to Pay was designed to work at or near the point of care, it is expected to substantially improve the propriety of payments and decrease the legal costs of recovery.

As a result, when implemented, Chase to Pay is expected to improve the net recovery margin as the recovery multiple grows and variable legal costs to recover decline.

As a result of having already received data from property &

casualty insurance carriers we've settled with for historical claims, and based on the agreement with said carriers to receive data for one year from the date of the settlement, the Chase to Pay platform can be utilized to pursue additional recoveries by matching the insurance carrier with Claims data received from our Assignors.

Although we have not yet generated revenue from this platform, some Assignors send data to the Company on a monthly or quarterly basis.

The Company is working to increase the number of Assignors that provide daily data outputs.

We are currently in the process of determining the pricing and form of these arrangements.

MSP/Palantir Clearinghouse Platform

The clearinghouse platform, created in collaboration with Palantir, was developed to identify, quantify, and resolve outstanding liens.

By law, Medicare and MA Plans are payers of last resort, making no-fault insurers the primary payers, responsible to exhaust their policy limits to pay for accident-related claims before Medicare bears any responsibility.

Healthcare providers often submit Claims for the payment of medical services rendered after an accident to the patient’s health insurer, either seeking “conditional payments,” pending reimbursement by a primary payer, or entirely unaware that a primary payer has payment obligations.

Medicare is unable to effectively verify if and how much is owed for any particular claimant if they are not aware that there is a Primary Payer involved.

Federal law requires primary payers to maintain and report the “key identifiers” for all claimants (such as their name, Social Security number, address, etc.) used to determine a claimant’s Medicare status before settling any injury claim.

These steps are required to ensure that Medicare is alerted to primary payer obligations in order to seek reimbursement.

Primary payers routinely fail to fulfill these two duties, resulting in improper Medicare payments, rather than payments made by responsible parties, as required by law.

The Company has proven that, in some instances, primary payers have a reporting rate as low as 2%, thus those certain primary payers have failed to comply with the law 98% of the time.

We expect that the clearinghouse platform is a potential solution to this systemic problem, integrating advanced artificial intelligence (“AI”) tools, natural language processing (“NLP”), and machine learning (“ML”) to create a robust data analytics system capable of capturing and managing extensive healthcare data from multiple sources.

Key Features and Benefits:

• Near Real-Time Data Analytics:

The clearinghouse platform provides an expansive repository of data from patients, attorneys, healthcare providers, health insurers, and property and casualty insurers that can be utilized to determine payer obligations.

• Enhanced Connectivity:

With the ability to connect property and casualty insurers to health plans and downstream medical providers, the clearinghouse platform can address inefficiencies arising from improper payments related to accident-related injuries.

This connectivity streamlines the reimbursement process, ensuring that healthcare payers and providers receive appropriate compensation, helping to reduce administrative burdens.

• Advanced Data Management:

The utilization of AI, NLP, and ML to process and analyze large volumes of healthcare data helps enhance the accuracy and efficiency of claims management and payment integrity.

• Legal Integration:

The clearinghouse platform integrates legal, data, and healthcare knowledge, providing a unified ecosystem that streamlines the processing of claims reconciliation.

It may also be used by primary payers to proactively resolve liens and ensure compliance with federal laws.

Through the clearinghouse platform, the Company aims to transform the healthcare reimbursement system by leveraging advanced technologies to improve data connectivity and enhance operational efficiency, leading to improved patient outcomes.

Revenue generated from the clearinghouse platform has not been significant.

MSP Recovery has developed a technologically advanced Electronic Health Record (“EHR”) platform (“EHR Platform”) enabling patients and their authorized third-party representatives to collect, distribute, and export their EHR securely, facilitating informed decision-making and improved health outcomes.

The EHR Platform streamlines the retrieval and analysis of medical data.

It also provides comprehensive insights for healthcare providers, enhancing efficiency, and monitoring outcomes and key performance indicators.

The EHR Platform went live in the second quarter of 2024 and revenue generated from it has not been significant.

Medicare and the MSP Laws

The Medicare Secondary Payer Act

The MSP Act states that, under certain conditions, Medicare is the secondary payer rather than the primary payer for its insureds.

Under the MSP Act, when another entity has the responsibility for paying before Medicare, the Medicare program does not have primary payment responsibility for its insureds.

When Medicare (or an MAO) makes a payment for medical services that are the responsibility of a separate primary plan under the MSP Act, those payments are conditional.

Conditional payments are made by Medicare (or an MAO) as an accommodation for its beneficiaries but are secondary and subject to reimbursement in all situations where one of the statutorily enumerated sources of primary coverage was obligated to pay instead.

Subsequent to the initial passage of the MSP Laws, Congress provided a private cause of action, authorizing private parties to recover unreimbursed payments in cases where a primary plan fails to pay or provide appropriate reimbursement in accordance with MSP Laws.

In our cases, we use the current MSP Laws, among others, including the double damages provision, to hold primary payers accountable.

Senate and the U.S.

House of Representatives are considering the Repair Abuses of MSP Payments Act, re-introduced in May 2023, which seeks to limit the application of the private cause of action under the Medicare Secondary Payer Act and related double damages provisions.

Conditional payments are made by Medicare (or an MAO) as an accommodation for its beneficiaries, but are secondary and subject to reimbursement in all situations where a primary payer was obligated to pay in the first instance.

Subsequent to the initial passage of the MSP Act, Congress provided a private cause of action, authorizing private parties to recover unreimbursed payments in cases where a primary plan fails to pay or provide appropriate reimbursement in accordance with MSP Laws.

We employ the MSP Laws, among others, including the double damages provision, to hold primary payers accountable.

Medicare Advantage Plans

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Federal regulations recognize Medicare first-tier and downstream entities as active participants in the provision of benefits under Medicare Part C.

§ 422.2 defines a “First-Tier Entity” as “any party that enters into an acceptable written arrangement with an MA organization or contract applicant to provide administrative services or health care services for a Medicare eligible individual.” A “Downstream Entity” is an entity that enters into a similar written arrangement at a level below that of a First-Tier Entity.

First-tier entities are defined as “any party that enters into an acceptable written arrangement with an MA organization or contract applicant to provide administrative services or health care services for a Medicare eligible individual.” Downstream entities are those entities that enter into a similar written arrangement at a level below that of a first-tier entity.

Such written arrangements continue down to the level of the ultimate provider of both health and administrative services.

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We are entitled to pursue medical expenses paid by our Assignors that should have been paid by Primary Plans (as defined by federal law).

Under the MSP Act, we are

entitled to pursue double the amount that a provider charged.

Under the MSP Act, we are entitled to pursue double the amount that a provider charged.

The private cause of action under 42 U.S.C.

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to incentivize compliance with the MSP Act.

The Repair Abuses of MSP Payments Act (S.1607/H.R.3388) (the “RAMP Act”) re-introduced in 2023 by Senators Tim Scott (R-SC) and Maggie Hassan (D-NH) and Representatives Brad Schneider (D-IL) and Gus Bilirakis (R-FL) in the U.S.

Senate and the U.S.

House of Representatives, respectively, could limit potential double damage recoveries to group health plans only, as defined in paragraph 42 U.S.C.

§ 1395y(b)(1)(A)(v)).

This legislation, if enacted as proposed, would not apply retroactively, and would not affect our existing portfolio of Claims or lawsuits filed prior to its potential enactment.

Interest Multiple

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As such laws, plans, and policies provide for payment of the providers’ actual charges (the Billed Amount), rather than the reduced Medicare payments, we pursue recovery of the Billed Amount and in certain cases, as provided by law, double the Billed Amount for medical services and treatments.

The below graphic demonstrates the difference between the Paid Amount, the Billed Amount, and the potential for double damages.

For additional information, see “Development of Medicare and the MSP Law” below.

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The Medicare, Medicaid, and SCHIP Extension Act of 2007 (“MMSEA”) added mandatory reporting requirements with respect to Medicare beneficiaries who have coverage under group health plan arrangements as well as for Medicare beneficiaries who receive settlements, judgments, awards, or other payment from liability insurance (including self-insurance), no-fault insurance, or workers’ compensation.

Failure to comply with MMSEA may result in a civil money penalty of $1,000 for each day of noncompliance for each individual for which the information should have been submitted.

Failure to comply with MMSEA may result in a civil money penalty of $1,000 for each day of non-compliance for each individual for which the information should have been submitted.

This civil money penalty is in addition to any other penalties prescribed by law and in addition to any Medicare secondary payer Claim under this title with respect to an individual.

Although we are not entitled to pursue MMSEA penalties on our own behalf, we have filed a qui tam lawsuits on behalf of the federal government to enforce this federal law.

The LifeWallet Ecosystem

LifeWallet is a versatile, scalable, and expandable data ecosystem, where tokenized data is stored in a secure, user friendly platform with multiple applications.

Although development is ongoing, initial beta testing has provided real-time or near real-time analytics at the point of care, helping to identify primary insurers, assisting providers in receiving reasonable and customary rates for accident-related treatment, shortening the company’s collection time frame, and increasing revenue visibility and predictability for its users.

Proper documenting of claims by providers continues to be a pain point for providers—an industry wide problem that LifeWallet is addressing with high success rates in real-time testing environments.

Consumer facing developments (business to consumer or “B2C”) continue to be addressed contemporaneously with features aimed at providers (business to business or “B2B”);

but the B2C roll out has been scaled back as immediate B2B opportunities arise that will eventually allow the end consumer to have better access to their healthcare data.

A number of applications that will be powered by LifeWallet are currently in development.

During 2023, these developments continued in a structured and robust manner.

Some of the LifeWallet applications have been paused, as explained below, while others have been newly developed to pursue different business models.

These include:

• LifeWallet EHR.

The LifeWallet EHR platform is currently being tested for two initial potential business models.

LifeWallet underwent and passed a rigorous vetting process with a large health information network in the U.S, which has access to over 95% of hospitals, 750,000 medical providers, major medical laboratories, and governmental entities that gather and store electronic health records (“EHR”) in varying platforms.

EHR interconnectivity is a required mandate in the U.S.

Office of the National Coordinator (“ONC”) for efficient treatment and care of patients in the U.S.

LifeWallet EHR is currently testing access to nationwide EHR for Medicare Service Organizations (“MSO”), mass tort law firms requiring EHR for causation evidence through medical records to prove a case, and Public Service Answering Points (“PSAP”) for 911 access to EHR during a medical emergency.

• Chase to Pay.

A real-time, or near real-time analytics driven platform that identifies the proper primary payer at the point of care, Chase to Pay is intended to interface with real-time medical utilization platforms utilized by providers at the point of care.

As our recovery litigation progresses, this iteration of the LifeWallet platform continues to evolve into a principal instrument being utilized to pursue future recoveries.

The model locates and organizes medical records to facilitate efficient access and enable informed decision-making and improved patient care.

As previously disclosed, we believe that Chase to Pay will form the basis of our core business in the future, as the existing core business and Chase to Pay are symbiotic.

Chase to Pay is powered, in part, by Palantir Technologies’ Foundry platform, utilizing LifeWallet’s industry knowledge.

LifeChain continues development in order to tokenize healthcare Claims and patient records using blockchain technology, to enable adjudication of Claims upfront, in real-time, with complete transparency.

LifeChain aims to reduce costs, maximize provider revenue, improve patient care, and eliminate fraud, while maintaining patient privacy using decentralized biometric authentication and a robust dashboard for user-specific analytics.

The platform has the flexibility to adapt to user-specific requirements.

• LifeWallet 911.

LifeWallet 911 continues to be developed for utilization by emergency service organizations, including PSAPs, to improve the facilitation of emergency services by providing 911 operators, dispatchers, and emergency medical providers with immediate access to vital information to reduce response times and improve patient outcomes.

• LifeWallet Legal.

LifeWallet Legal continues to be developed within the LifeWallet ecosphere, incorporating the existing platform Case & Lien platform to incorporate EHR/PHI through LifeWallet EHR.

LifeWallet Legal will continue to evolve as platforms are rolled in the mass tort space and the need for EHR continues to rise under evidentiary standards in the courts.

• LifeWallet Health.

The LifeWallet Health platform has been integrated with other platforms in the LifeWallet ecosphere;

as such, its rollout has been postponed indefinitely to prioritize other platform developments.

In conjunction with LifeWallet EHR, member/users will remain in control over their healthcare data by providing easy access to their medical history, and utilizing a wide variety of data points to improve overall patient care.

• LifeWallet Sports.

LifeWallet Sports, as of its last iteration, predominantly remained in the collegiate athletics space.

LifeWallet Sports connected brands with college athletes on this platform, which evolved into a social media and podcast platform.

The Name, Image, and Likeness (“NIL”) rights space has been tempered with the entry of educational institutions and competent governmental authorities into the space of regulation and standardization.

LifeWallet Sports is a pioneer in the area, essentially setting and implementing guiding standards in the once nascent space.

A strong undertow has caused this platform to retreat from the initial business model and search for alternative streams of income.

By connecting athletes with brands and businesses, the platform assisted with deal negotiation and rule compliance, and enabled brands and businesses to identify talent, schedule events, and monitor campaigns.

• LifeWallet EDU.

LifeWallet EDU was being developed for schools, but has been paused to prioritize other LifeWallet platforms.

Our market testing revealed that educational institutions typically use third party software solely for administrative capabilities of those platforms, and are not equipped to handle the robust features within the LifeWallet EDU, which incorporated, security, student monitoring, parental integration, and other features that the educational institutions surveyed were not ready to adopt.

Although we are not entitled to pursue MMSEA penalties on our own behalf, we have filed qui tam lawsuits on behalf of the federal government to enforce this federal law.

Competitive Strengths

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When we are assigned these rights, we obtain ownership in those rights that typical subrogation vendors do not.

Rather than provide services under third-party vendor services contracts, we receive the rights to our Assignors’ Claims, and therefore step into the Assignor’s shoes.

Rather than provide services under third-party vendor services contracts, we receive recovery rights to our Assignors’ Claims, and therefore step into the Assignor’s shoes.

As assignees, we are the plaintiff in any action filed in connection with such Claims, we maintain control over the direction of the litigation, and we can pursue additional recoveries under numerous legal theories that our competitors cannot.

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From those recoveries, we are typically contractually obligated to pay 50% of recoveries to the Assignor, plus attorneys’ fees and costs associated with pursuit of the recoveries.

cases, we have purchased the Assignor’s rights to recovery proceeds in advance of any collection, entitling the Company to retain 100% of the recovery proceeds, net of attorneys’ fees and costs.

In certain cases, we have purchased the Assignor’s rights to recovery proceeds in advance of any collection, entitling the Company to retain 100% of the recovery proceeds, net of attorneys’ fees and costs.

As of December 31, 2024, we were entitled to approximately 56.8% in the aggregate of the approximately $87.7 billion in PVPRC.

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See “Risk Factors—Risks Related to the Company’s Business and Industry.” This approximately $87.7 billion in PVPRC was identified using our Algorithms which comb through historical paid Claims data and to identify potential recoveries.

As of December 31, 2023, the approximately $88.9 billion in PVPRC and approximately $370 billion in Paid Amount included approximately $5.5 billion and approximately $24.4 billion in capitated payments, respectively.

As of December 31, 2024,

the approximately $87.7 billion in PVPRC and approximately $380 billion in Paid Amount included approximately $5.2 billion and approximately $24.4 billion in capitated payments, respectively.

Such capitated amounts are typically based on a fixed amount per enrollee in a plan rather than amounts paid on a fee-for-service basis and, in calculating the equivalent of Paid Amount for purposes of measuring potential recoveries, in cases where payments were based on capitated amounts, MSP Recovery reviews capitated encounter data typically found in Medicare Part B payments.

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The timeline for Claims being identified as potentially recoverable Claims to actual Claims recovery revenue can vary greatly depending on the complexity of the recovery strategy and litigation, as well as the status of each Claim in the recovery process.

The Company monitors the penetration status of the Claims portfolio, which categorizes the status of cases based on their status in the recovery process in the following categories:

The Company monitors the penetration status of the Claims portfolio, which categorizes the status of cases based on their progression through the recovery process in the following categories:

in development, recovery process initiated, data collected and matched, resolution discussions in process, and other cases.

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Our Proprietary Data Analytics System

We believe our access to large volumes of data, sophisticated data analytics, and leading technology platforms provide a unique opportunity to discover and recover Claims.

We believe our access to large volumes of data, sophisticated data analytics, and proprietary leading technology platforms provide a unique opportunity to discover and recover Claims.

Our Algorithms comb through historical paid Claims data to identify potential recovery opportunities.

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Through data mining, we continue to identify new recovery opportunities.

Our Founders and Broad Team with Extensive Legal Experience

Our Founders Have Extensive Legal Experience

Experienced management gives us a competitive advantage.

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We use our proprietary software and a highly trained staff including IT personnel, accountants, statisticians, physicians, data analysts and attorneys to maximize the recovery of Claims already paid.

Growth Strategy

Growth Strategies

Expansion of Assignor Claims.

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These strategies will include a platform to educate potential Assignors about our company, making strategic business partnerships, potential mergers, acquisitions of personnel, as well as other marketing strategies.

Further Development of our Chase to Pay Services .

The Company is currently developing the Chase to Pay model.

This model will allow payers and providers to identify the proper primary payer in real time, at the point of care.

Our plan is to develop these services to form a source of revenue that does not require the acquisition costs and recovery sharing associated with our Claims recovery business.

Continued Development of our Data Analytics System.

We continue to develop our proprietary system and anticipate shifting to AI and machine learning to better enhance our recovery potential.

The development of our system will allow us to be more efficient in the services we provide our Assignors, as well as being able to attract more Assignors.

Monetizing Existing Software Applications.

We intend to offer certain of our software applications, including our Claims to Med application as separate products.

The Claims to Med application translates the codified component of procedural codes (“CPT codes”) from medical Claims data and medical bills into medical records that are consistent with Claims records.

This allows patients, providers, attorneys, corporations, and the general public to better understand their medical history.

We intend to offer certain of our software applications, including our Chase to Pay, the clearinghouse platform, and the EHR Platform, as separate products.

Development of our Proprietary Data Analytics System.

We continue to develop our proprietary system and anticipate shifting to artificial intelligence and machine learning to better enhance our recovery potential.

Our data analytics system will power proprietary tools such as Chase to Pay and the clearinghouse platform, thus enabling the Company to more efficiently recover on Claims, and enable us to attract more Assignors.

Claims Recovery

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We review our Assignor’s Claims data and compare these records with the CMS database and court dockets to determine if any of our Assignor’s enrollees have been involved in a dispute that resulted in a settlement.

In addition, in connection with certain of our recent settlements, settling counterparties have assigned to the Company all rights to collect additional sums from plaintiffs’ attorneys and medical providers resulting from violations of the MSP Laws, including double billing and reimbursement failures.

Product Liability

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These adverse reactions may range from minor rashes to cancer and subsequent death.

Where Medicare or an MAO has paid an enrollee’s medical expenses for these injuries, we can pursue recoveries.

Where Medicare or an MAO has paid an enrollee’s medical expenses for these injuries, we may be able to pursue recoveries.

Antitrust-Pharmaceutical

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We conduct an analysis of the claimants in the MDL settlement and identify liens belonging to the Company arising from medical care and treatment provided to claimants for which the Company has a legal right of recovery.

A lien administrator provides the list of claimants to us.

A lien administrator provides the list of

claimants to us.

We then provide the Claims data supporting our liens to the lien administrator, which includes the specific Billed and Paid Amount of our liens.

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We have been assigned Claims from all 50 states, as well as Puerto Rico.

We typically acquire recovery rights by entering into a CCRA with an Assignor, pursuant to which the Assignor assigns all right, title, and interest in and to certain recovery and reimbursement rights to the Company, or to an affiliated entity, partner, or investor, in exchange for (a) deferred compensation, typically structured as 50% of any net recovery earned by and paid to us, or (b) an upfront lump sum payment.

We typically acquire recovery rights by entering into a Claims Cost Recovery Agreement (“CCRA”) with an Assignor, pursuant to which the Assignor assigns all right, title, and interest in and to certain recovery and reimbursement rights to the Company, or to an affiliated entity, partner, or investor, in exchange for deferred compensation, typically structured as 50% of any net recovery earned by and paid to us, or an up-front lump sum payment.

Some of these CCRAs are “limited recovery” agreements, meaning that they are limited in time or scope as to what is assigned to us.

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The Company believes as it develops the Chase to Pay platform and recovery model, a significant portion of the Company’s revenue from these CCRAs will be derived through the Chase to Pay model by recovering on Claims as they occur.

In the cases where we acquire recovery rights for an upfront lump sum payment, instead of a CCRA, we typically enter into a Claims Purchase and Assignment Agreement (“CPAA”).

Under a typical CPAA, an entity assigns all right, title, and interest in and to certain recovery and reimbursement rights to us, or to an affiliated entity, partner, or investor, in exchange for an upfront lump sum payment.

In the cases where we acquire recovery rights for an up-front lump sum payment, we enter into a Claims Purchase and Assignment Agreement (“CPAA”).

In these arrangements, we (or our affiliated entity, partner or investor) would typically own 100% of all future net recoveries from those purchased Claims.

Often, the CPAA includes a provision to continue acquiring future Claims from the Assignor.

MSP Recovery Clearinghouse

We developed the MSP Recovery Clearinghouse, formerly known as MSP Lien Resolver, to identify, quantify, and resolve outstanding liens.

Medicare is left helpless in verifying if and how much is owed for any particular claimant if they are not aware that there is a Primary Payer involved.

Federal law requires primary payers to maintain and report the “key identifiers” for all claimants (such as their name, Social Security number, address, etc.) that are used to determine Medicare status on a regular basis and determine all claimant’s Medicare status before settling any injury claim.

These steps are required to ensure that Medicare is alerted to primary payer obligations and to seek reimbursement.

Primary payers routinely fail to fulfill these two duties, leaving Medicare in the dark and footing the bill.

The result is a loophole for insurers, as Medicare relies on primary payer reporting to identify payment or reimbursement obligations.

The Company has proved that in some instances primary payers have as little as a 2% reporting rate, thus failing to comply with the law 98% of the time.

The Company developed MSP Recovery Clearinghouse to reduce or eliminate this problem.

MA Plans have and continue to provide claims data to the Company, including lists of beneficiaries along with diagnosis and treatment codes, and payment data.

The Company aggregates this data into the MSP Recovery Clearinghouse, which compares the information with other publicly available sources.

Proprietary algorithms then analyze these unique data sets against the list of beneficiaries to discover compensable Claims.

The MSP Recovery Clearinghouse’s 3-Step Data Comparison & Claim Identification process reveals the full universe of beneficiaries and both reported and unreported Claims.

Gather the Data Sets.

Through a simple electronic query, primary payers can provide to the MSP Recovery Clearinghouse a report with “key identifiers” for all insureds who have made and/or settled claims.

Discover Reimbursable Claims.

The MSP Recovery Clearinghouse applies algorithms and data matching protocols to identify any claimant matches between the primary payer and Medicare Advantage plans, generating a report of what the Primary Payer owes for unreimbursed conditional payments.

Quality Control.

The parties engage in quality-control procedures to ensure the validity of the generated report.

The amount owed is calculated and a demand to settle is made.

If no agreement can be reached, the litigation moves forward.

The MSP Recovery Clearinghouse model may also be used by primary payers to proactively resolve liens and ensure future compliance with federal law.

Fee Sharing Arrangements

We engage with each Assignor independently.

As stated above, typically our Assignors irrevocably assign to us broad recovery rights to the Claims assigned.

Generally, the assignment agreements provide for the Assignor to receive 50% of the Net Proceeds of any recoveries from the Claims assigned.

The “Net Proceeds” of any assigned Claim is defined as the gross amount recovered on an assigned Claim, minus any costs directly traceable to such assigned Claim(s) for which recovery was made.

In some instances, we may purchase outright an Assignor’s recovery rights;

in this instance, we are entitled to the entire recovery.

We enter into legal services agreements with the Law Firm and the various entities that hold Claims.

In this relationship, the Company (and other Claims holding entities) is the plaintiff and the Law Firm serves as its counsel.

We enter into legal services agreements with the Law Firm and related entities that hold Claims.

In this relationship, the Company (and the Claims holding entities) are the plaintiffs in any action filed, and the Law Firm serves as its counsel.

The Law Firm is engaged to act as lead counsel to represent the Company and each of its subsidiaries and affiliates (or other applicable entity) as it pertains to the Assigned Claims, on a contingency basis.

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Cybersecurity .

Our research and development team uses proprietary software and a highly trained staff including I.T.

personnel, accountants, statisticians, physicians, data analysts, and attorneys to analyze data from a variety of sources.

We will continue to invest resources into our proprietary systems.

Our research and development team uses proprietary software and a highly trained staff including IT personnel, accountants, physicians, data analysts, and attorneys to analyze data from a variety of sources.

We will continue to invest resources to further develop our proprietary systems.

Our intellectual property licensing agreements grant, during the term of the agreement, a non-exclusive, non-transferable, non-assignable, irrevocable, worldwide, fully paid-up license under our software and technology to use, perform, import, export, and all other rights pursuant to our software and technology solely in connection with the parties’ assigned Claims and the transactions contemplated in the agreements between the parties.

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While other entities in the industry act as vendors and pursue reactive recoveries, we aggressively pursue recoveries on our own behalf, using applicable state and federal laws.

Although somewhat different in approach, we compete with in-house recovery departments, collection and financial services companies and other companies.

Some of these entities are Cotiviti Holdings, Inc., MultiPlan Corporation, Encore Capital Group, Inovalon Holdings, Inc., Optum, Inc., Verisk Health, Inc., McKesson Corporation, Change Healthcare Corporation, HMS Holdings Corp., The Rawlings Group, Equian, LLC, Trover Solutions, Inc.

and other, smaller companies.

Although somewhat different in approach, we compete with in-house recovery departments, collection and financial service companies, and other companies.

Some of these entities include, but are not limited to, Cotiviti Holdings, Inc.;

Claritev Corp.;

Encore Capital Group;

Inovalon Holdings, Inc.;

Verisk Health, Inc.;

McKesson Corp.;

Change Healthcare Corp.

(a subsidiary of Optum, Inc.);

HMS Holdings Corp.;

The Rawlings Group;

and Trover Solutions, Inc.

Human Capital

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We employ specialized contract or part-time employees on a temporary basis, which include highly trained IT personnel, accountants, statisticians, physicians, data analysts, and attorneys to maximize the recovery of Claims.

employees are covered by collective bargaining agreements or represented by a labor union.

None of our employees are covered by collective bargaining agreements or represented by a labor union.

We believe that the relationships we have with our employees are positive.

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Our human capital resource objectives include not only acquiring the best talent but also motivating those that drive our business forward.

We aim to achieve these objectives using generous compensation programs and offering a one-of-a-kind employee experience.

We aim to achieve these objectives using generous compensation programs and offering a unique employee experience.

To better develop and incentivize our employees, we regularly provide employee feedback and recognition, and incentivize performance and innovation through an annual bonus program.

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We intend to disclose on our internet website any amendments to or waivers from our code of business conduct and ethics as well as any amendments to its corporate governance principles or the charters of various committees of the Board of Directors.

Copies of these documents may be obtained, free of charge, from our website.

The SEC also maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file periodic and other reports electronically with the SEC.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business