presented by: tim doherty srs – specialty risk services po box 5340 manchester, new hampshire...
TRANSCRIPT
PRESENTED BY:
Tim DohertySRS – Specialty Risk Services
PO Box 5340Manchester, New Hampshire 03108
(603) 222-9318
Elizabeth Hurley, Esq.GETMAN,SCHULTHESS & STEERE, P.A.
Three Executive Park Drive – Suite 9Bedford, New Hampshire 03101
(603) 634-4300
MEDICARE,MEDICAID & SCHIP
EXTENSION ACT OF 2007 (MMSEA)
Legislative Intent:Mandatory reporting requirements to aid in enforcement of Medicare Secondary Payer Act
HISTORY OF MSP
Enacted 1965Clarified Secondary vs. Primary
Payer StatusWorkers Compensation Cases –
W/C – Primary Payer
HISTORY OF MSP
Amended in 1980 to Include Liability Policies
Medicare Secondary to Liability Insurance
MMSEA Applies to Primary Payers
Primary Payers “any entity that is or was required or
responsible to make payment with respect to an item or service (or any
portion thereof) under a primary plan.”
MMSEA Applies to Primary Payers
Primary Payers Responsibility: Judgment Payment Pursuant to a Compromise Settlement Award Contractual Obligation
Who Must Contact Medicare?
Primary Payer = Responsible ReportingEntity (RRE) Liability Insurance Plan No Fault Insurer Workers Compensation Plan Self-Insurers Third-Party Administrators Group Health Plans
IDENTIFICATION
CMS QUERY SYSTEM Method by which RRE’s can determine
claimant’s Medicare entitlement status RRE submits claimant’s name, SSN, date of
birth & gender Confirms entitlement status only – not dates or
basis of entitlement Written verification of entitlement status provided Submission of query alone does not satisfy
reporting requirements
http://www.cms.gov/MandatoryInsRep/Downloads/NGHPregistrationAlert.pdf
Direct Data Entry option for occasional reporters, The
registration and outline fully explain this reporting option,
IDENTIFICATION
HOW TO ACQUIRE THE NECESSARY INFORMATION
AUTHORIZATION FOR RELEASE OF RECORDS
DISCOVERY REQUESTS
Mail Consent to Release to MSPRC at:MSPRC Auto/Liability[check address as it changes]P.O. Box 33828Detroit, MI 48232-0998Fax: (734) 957-0998
Notification
Identification
SAMPLE INTERROGATORIES
1. Please provide the following information about yourself:(a) Date of birth;(b) Social Security Number or your health insurance claim number (“HICN”);
(c) Gender.
2. Are you currently a Medicare beneficiary? If so, Please identify any and all amounts that have been paid by Medicare in satisfaction of medical expenses from any healthcare provider involved in the treatment of your injuries you are claiming in this lawsuit. Please outline any communications that you have had with Medicare and specifically any Medicare secondary payer contractor regarding their lien.
3. If you are not currently a Medicare beneficiary, do you anticipate becoming one during the pendency of this litigation either due to your age or applying for Social Security Benefits? If so, please be sure to supplement your discovery responses accordingly.
The information outlined in the above interrogatories is necessary so that the defendant or any insurer ofthe defendant can comply with the Medicare regulations. See 42 U.S.C. 1395(y)(b)(8) otherwise knownas Medicare, Medicaid and SCHIP Extension Act of 2007 (“MMSEA”), Section 111.
Identification
SAMPLE INTERROGATORIES
WRONGFUL DEATH CASES:1. Please provide the following information about the decedent: (a) Date of birth; (b) Social Security Number or their health insurance claim number (“HICN”); (c) Gender.
2. Was your decedent a Medicare beneficiary? If so, please identify any and all amounts paid by Medicare in satisfaction of medical expenses for any healthcare provider involved in the treatment of your decedent for which are being claimed in conjunction with this lawsuit.
The information outlined in the above interrogatories is necessary so thatthe defendant or any insurer of the defendant can comply with the Medicareregulations. See 42 U.S.C. 1395(y)(b)(8) otherwise known as Medicare, Medicaidand SCHIP Extension Act of 2007 (“MMSEA”), Section 111.
Identification
Sample Request for Admissions:
REQUEST FOR ADMISSION NO. 1: Admit that on ____________[here insert the date of the accident in question] you were not a Medicare beneficiary and not entitled to Medicare.ADMIT OR DENY:
REQUEST FOR ADMISSION NO. 2: Admit that since___________ [here insert the date of the accident in question] you have not becomea Medicare beneficiary and are not presently entitled to receive benefitsfrom Medicare.ADMIT OR DENY:
Identification
SAMPLE REQUEST FOR PRODUCTION
Please produce copies of any and all medical expenses or bills that youare claiming in this case with an outline of the specific amounts that havebeen paid by Medicare. Please also produce any conditional paymentsummary that you have been provided through Medicare or the Medicaresecondary payer contractor. If you do not have this document, pleasecomplete and return the attached CMS/MSPRC Consent to ReleaseAuthorization.
Identification
CMS QUERY SYSTEM – Pros & Cons
Insurer (RRE) no longer has to rely on opposing counsel to determine claimant/plaintiff’s Medicare status
Insurer (RRE) is now directly responsible for determining Medicare eligibility status by submitting inquiry to CMS
Notification
Medicare’s Coordination of Benefits Contractor (COBC) 1-800-999-1118
Date of Birth Health Insurance Claim Number (HICN) Type of Insurance (liability, no-fault, workers’ comp) Date of Incident Plaintiff’s Full Name, Address and Telephone No. Opposing Counsel’s Name, Address and Telephone No. RRE’s address, Telephone No., Agent and Policy No. List of all Claims using ICD-9 categories
Notification
COBC opens a potential recovery case and refers matter to second contractor – the MSP Recovery Contractor (MSPRC)
MSPRC issues a “MSP Rights and Responsibilities Letter”
New Rules: MSPRC might not work directly with RREs or their counsel
Reimbursement
How Much Does Medicare Get Paid Back?
Medicare sends conditional payment letter from CMS/MSPRC
This is Initial Demand
Reimbursement
NEGOTOATING THE LIEN:Write letter to plaintiff’s counsel to send to CMS re: why treatment is not related.Provide IME Reports.Outline pre-existing conditions with copies of selected key records.
Reimbursement
NEGOTIATING THE LIEN: Procurement Cost
– 42 C.F.R 411.37 provides for the reduction based on “procurement costs” or plaintiff’s attorney fees and costs.
costs are incurred because the claim is disputed; and
costs are borne by the party against which CMS seeks to recover.
Reimbursement
An Example Calculation of a Recovery Situation with Represented
Medicare Claimant in a Liability Case
Facts: Settlement of $20,000.00. Attorney’s contingency arrangement of 30% with actual cost of $500. Medicare is asserting a lien of $5,000.00
Attorney’s fees are $6,000.00 ($20,000 x 30%) plus $500.00 provides for total “Cost of Procurement” of $6,500.00
Reimbursement
$6,500.00 divided by $20,000.00 = .325, which is the proportional share of the fees and costs.
.325 x $5,000.00 Medicare Lien = $1,625.00, which is Medicare’s proportional amount of procurement costs.
Subtract $1,625.00 from Medicare’s original lien amount of $5,000.00; which equals $3,375.00.
Medicare’s recovery is $3,375.00 from the settlement proceeds of $20,000.00
Reimbursement
NEGOTIATING THE LIEN:“Hardship Exceptions”
waiver of lien § 1870(c)
The plaintiff has the opportunity to apply fora hardship waiver. Medicare can issue a
full or partial waiver, or deny the waiver completely
Reimbursement
Hardship Waiver50.6.5.1 – Examples of Financial Hardship
(Rev. 1, 10-01-03)
The demonstrated beneficiary income and resources are at a poverty level standard, such as being in an SSI pay status.
Unforeseen severe financial circumstance existing at the time Medicare’s claim comes into existence so long as and no other financial resources to meet this legal obligation.
Reimbursement
50.6.5.2 – Recovery Would Be Against Equity and Good Conscience (Rev. 1, 10-01-03)
The degree to which the beneficiary contributed to causing the overpayment;
Reimbursement
The degree to which Medicare and/or its contractors contributed to causing the overpayment;
Reimbursement
The degree to which recovery or adjustment would cause undue hardship for the beneficiary;
Reimbursement
Whether the beneficiary would be unjustly enriched by a waiver or adjustment of recovery; and
Reimbursement
Whether the beneficiary changed their position to their material detriment as a result of receiving the overpayment or as a result of relying on erroneous information supplied to the beneficiary by Medicare.
Hadden v. U.S.Slip Copy, 2009 WL 2423114W.D.Ky.,2009
Plaintiff filed suit to have lien amount reduced. Suit Dismissed.
Reimbursement
Final Demand Letter
This is the actual amount of the lien
“We have determined that you are required to repay the Medicare Program
$XXX.xx.”
Reimbursement
Funds Distribution Strategies
Await final conditional payment statement, then issue a separate check directly to Medicare, with the balance to the plaintiff.
Hold the funds in trust until the Medicare
issue can be resolved
Reimbursement
Almost Final Letter will State:
“We have received check number XXXX in the amount of $XXX.xx
Reimbursement
Final Letter will State:
“The amount has been applied to outstanding debt due Medicare. The principal amount of the debt and interest (if applicable) has been reduced to zero and our file is being
closed.”
Reimbursement
MEDICARE SET-ASIDE (“MSA”) ALLOCATION
May be needed when settling future medical benefits for individuals who are or will become entitled to Medicare
Applies when there is foreseeable, ongoing medical treatment related to settled claim
Future Medicare entitlement cannot be waived by claimant
Not needed if medicals are left open, i.e. workers comp.
Reimbursement
CALCULATING AMOUNT OF MSA Amount based on reasonable projection of
future medical costs related to injury that would otherwise be covered by Medicare
Based on amount that Medicare would ordinarily pay (considering deductibles & co-pays)
Based on life expectancy & rated age of beneficiary
Reimbursement
MSA OPTIONS
Self-Administered Accounts– For small amounts– Plaintiff administers following same accounting rules as a professional
administrator Custodial Accounts
– Larger Amounts– Administered by a professional custodian for a fee
Medicare Set Aside Trust– Plaintiff receiving means-tested public benefits (SSDI, Food Stamps, Veterans
Benefits or Section 8 Housing. – A formal trust with a trustee
Pooled Trust– Plaintiff receives means-tested public benefits– Operated by a non-profit– Pools with other funds for investment purposes.
Structured Settlements
Reimbursement
Medicare Set-Asides & Future Medicals Payment of future medicals and approval of Medicare Set-
Asides (MSA) are required for workers’ comp claims: Total Payment Obligation to Claimant (TPOC)
Section 111 does not specifically require non-WC liability carriers to provide for ORMs or establish MSAs
Medicare expects attorneys to disclose future medicals to CMS and may require MSAs in future and can seek claw backs
Proposed Release / Settlement Agreement Language
acknowledges and stipulates that claimant has consulted with physician and avows that there are no expected future medical expenses associated with this accident.
Reimbursement
parties have made reasonable efforts to recognize and protect the interests of Medicare pertaining to its conditional payments and possible future payments of medical expenses
Reimbursement
agrees to indemnify, defend and hold defendant, carrier and their attorneys harmless from any future medical, Social Security, Medicaid, Medicare or contract government health insurance fund claims
Reimbursement
agree that the amount of the final Medicare lien as stated in the Final Demand Letter, which shall be provided to the defense, will be paid in full out of the proceeds of this settlement and the remainder of the settlement funds paid in accordance with the instructions of counsel.
Reimbursement
Proposed Release LanguageSIMPLE MSA
Same language as above PLUS:
- avows that claimant has consulted with her health care providers relative to the need for future care and treatment for injuries related to the incident and the expected costs for same
Reimbursement
- avows that he will establish a self-administered Medicare Set-Aside account funded by proceeds from this settlement in the amount of $x,xxx, which is a reasonable amount for payment of certain future medical expenses related to the incident.
Reimbursement
- avows that this amount will be used exclusively for payments that Medicare might otherwise be called upon to pay in the absence of a Medicare Set-Aside.
Reimbursement
- avows that the defendant and its carrier have relied in good faith on the representations of claimant and his counsel as to his agreement to honor the obligations herein and adhere to the provisions of The Medicare Secondary Payer Act, 42 U.S.C. sec. 1395y.
SUBSTANTIAL MSASame language as above PLUS:
(a) Claimant will establish a dedicated account in which settlement funds in that amount shall be deposited;
(b) Claimant has attempted, through a Certified Medicare Set-Aside Consultant or otherwise, to seek review and approval of that amount and account, and to apprise the defense of any decision, or none, of Medicare regarding the Medicare Set-Aside plan set forth or referenced herein;
(c) Medicare Set-Aside Account will be funded by the defense
Reimbursement
The Medicare Set Aside Account must have restrictions in place such that withdrawals can only be made for purposes of medical care that would have otherwise been paid for by Medicare.
AND/OR
A strict accounting requirement must be in place in case of future action by Medicare.
Reimbursement
Reporting
Reporting – When to Report…
Section 111 Requires “reporting” ofSettlements, Judgments, Awards, or other
Payments by RREs
Reporting
Triggering Event
“Payment” = Obligation to repay lien arises when payment to claimant has been made.
“TPOC” = Total Payment Obligations to Claimant
Reporting
THRESHOLDS:
There are thresholds for Reporting General Liability Claims under Section 111 that impact when a settlement is required to be reported.
No need to Report if:
-Less than $5,000.00 between January 1, 2011 and December 31, 2011-Less than $2,000 between January 1, 2012 and December 31, 2012;–Less than $600.00 between January 1, 2013 and December 31, 2013;
Reporting
After January 1, 2014, EVERY payment made to a Medicare beneficiary concerning a general liability claim must be reported whether the payment is made as a result of settlement, judgment, or for any other reason whether a release is obtained or not.
Reporting
Section 111 of the Medicare, Medicaid & SCHIP Extension Act
– These thresholds do not apply or otherwise relieve a RRE from any obligations under the Medicare Secondary Payer Act to protect Medicare’s interest.
In other words…..
Still Must Pay the Lien and Protect Medicare from paying for future related treatment.
Reporting
Final Reporting
RRE must “report” using CMS website using “Claim Input File”
This can only be done by the RRE
Penalties
REIMBURSEMENT TO MEDICARE
Medicare must be reimbursed within 60 days of receipt of payment by Medicare beneficiary
If a liability insurance settlement is made and Medicare is not reimbursed, the third party payer must reimburse Medicare even if it has already paid the beneficiary!
Applies regardless of how amounts are designated in settlement (i.e. pain & suffering)
Penalties
CMS’ STATUTORY RIGHTS TO RECOVERY UNDER MSP
Interest if not paid within 60 days of notification – 42 U.S.C. 1395y(b)(2)(B)(ii)
Double damages if US must bring action to recover against primary payers –
42 U.S.C. 1395y(b)(2)(B)(iii) Subrogation rights – 42 U.S.C. 1395y(b)(2)
(B)(iv)
Penalties
Fines and Penalties Associated with Section III
Any “entity” which fails to comply with the reporting requirements mandated by 42 U.S.C. 1395y(b)(8), which is the codification of Section 111, is subject to a $1,000.00 a day fine, per claim, for noncompliance.
Penalties
PENALTIES FOR NONCOMPLIANCE
Penalties for noncompliance with reporting requirements are $1,000 per day!!!
Penalties
U.S. v. Harris The U.S. Government sued claimant’s attorney in
personal injury case seeking to assert its recovery rights under the MSP.
CMS had paid approximately $22,549.67 in Medicare claims submitted on the beneficiary’s behalf.
Underlying case settled for $25,000.00 and Medicare agreed to reduce its conditional payments to $10,253.59.
Counsel never filed any such appeal and also failed to pay CMS within the statutorily required 60-day time period.
Penalties
U.S. v. Harris
Holding: The government was entitled to recover funds received by a Medicare beneficiary from a settlement in a personal injury action from a ladder retailer. Because the defendant took responsibility for the payment of beneficiary's medical services, the government statutorily reserved the right for reimbursement for the medical services paid for by Medicare.
Penalties
U. S. v Stricker (E.D. N.D. Ala. 2009) (No. CV-09-PT-2423-E)
The U.S. government sued to recover conditional payments and double damages plus interest under the Medicare Secondary Payer Act.
The parties named in the suit include claimants’ counsel, insurers and corporate defendants.
Penalties
Plaintiff May Have Cause of Action
Medicare beneficiaries also have a potential private cause of action against a “primary plan which fails to provide for primary payment”– Plaintiff can seek double damages against RRE
Examples:– Beneficiary can sue if a beneficiary’s Medicare benefits are
suspended because an agreement did not properly protect his/her interest; OR
– If insurer’s/self-insured’s post-settlement reporting or reimbursement violations interrupted the plaintiff’s Medicare payments
WHAT IS THE IMPACT ON RESOLVING CLAIMS?
Indemnification clauses shifting responsibility to plaintiff are no longer sufficient to protect the insurer
Insurers have an affirmative obligation to report
Efforts to address Medicare liens must begin at an early stage in litigation
Claimant’s Medicare status must be determined by liability insurer or worker’s compensation carrier
Websites
Centers for Medicare-Medicaid Services:– www.cms.hhs.gov
CMS User’s Guide:– www.cms.hhs.gov/MandatoryInsRep/Downloads/
NGHPUserGuide022210.pdf CMS Downloads:
– www.cms.hhs.gov/MandatoryInsRep/ Town Hall Transcripts:
– www.cms.hhs.gov/MandatoryInsRep/07 NGHP Transcripts.asp/#TopOfPage
Medicare Advocacy Recovery Coalition:– www.marccoalition.com
MSPRC:– http://www.msprc.info/
www.mymedicare.gov