Download - Personal Injury Claims and the Payer Actmedia.straffordpub.com/.../presentation.pdf2011/09/28 · MSP: The Medicare Secondary Payer Act History… • MSP – December 5, 1980 •

Presenting a live 90‐minute webinar with interactive Q&A

Personal Injury Claims and the Personal Injury Claims and the Medicare Secondary Payer ActStrategies for Claims Settlement to Mitigate MSP and Section 111 Liability Risks

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1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

WEDNESDAY, SEPTEMBER 28, 2011

Today’s faculty features:

Jeremy T. Burton, Partner, Williams, Montgomery & John, Chicago

John Randall Whaley, Partner, Neblett Beard & Arsenault, Alexandria, La.

Sylvius H. Von Saucken, Chief Compliance Officer, Garretson Resolution Group, Cincinnati

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Today’s Agenda

1 M di I R ti d MSP C li

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1 Medicare Insurer Reporting and MSP Compliance

Legislative and Case Law Updatesg p

3 Release Language, Strategies and Practice Tips

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Personal Injury Claims & Medicare Secondary Payer Actj y y ySeptember 28, 2011

Sylvius H. von SauckenyGarretson Resolution Group

[email protected]

MSP: The Medicare Secondary Payer Act

History…y• MSP – December 5, 1980• Medicare in 2003

• MMA 301 (expanded liability)• MMA 301 (expanded liability)• Medicare in 2006-07

• Changes in MSPRC• Medicare Part D

• Medicare in 2008-09• MMSEA (eff. 7-1-09)( )

• 10/1/10 – no fault• 10/1/11 - liability

• New CP procedures (eff 10/1/09)

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• New CP procedures (eff. 10/1/09)• MSP Reforms (HR 1063)

2011 MSP Compliance = 2 Obligations

“What do you mean by closing the loop?”REPORTING OBLIGATION [2010 2011]REPORTING OBLIGATION [2010-2011]Accountable Party is the Defendant

RESOLUTION OBLIGATION [1980; 1995]Accountable party is plaintiff/claimant/counsel.

Involves both past payments made (conditional payments)

And screening to ensure future costs of care are not shifted over to Medicare. (Medicare Set Asides)

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s ted o e to ed ca e ( ed ca e Set s des)

2011 MSP Resolution = 2 Obligations

“Consider and Protect” Medicare’s interests Past Interest (Date of Injury to Date of Settlement) Past Interest (Date of Injury to Date of Settlement)

Verify and resolve conditional payments Future Interest (Date of Settlement Onward)Future Interest (Date of Settlement Onward)

Determine IF an MSA is appropriate under the case/claim specific facts AND document the filepBy making this determination:

Medicare’s future interest considered and protectedParties are MSP compliant (statute and regs)Claimant’s Medicare benefits are protected

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The Big Shift

All this change is causing…• …shift away from reliance on “indemnification” clauses alone…• …to affirmative obligation to address liens before disbursing as

condition of settlementcondition of settlement

What it means…• Requires starting much earlier• Requires formal verification of entitlementq

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When Rules Change, So Must the Game Plan

Old Post-Settlement ContinuumMedicare /

AgreementOn Settlement

Medicare / MedicaidPreservation(Trusts / Set

Amount(Asides) Disbursement

StructuredLien

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StructuredSettlementPaperwork

Reimbursement

New Settlement Continuum

Medicare / MedicaidPreservation(Trusts / Set-Asides)

Lien Resolution

AgreementOn Settlement

StructuredSettlementP kAmount Paperwork

12 Disbursement

Avoiding Confusion & Disruption…

Understanding the Medicare reimbursement system. Understanding the Medicare reimbursement system. What is a conditional payment and how can it disrupt the ordinary settlement process if not accounted for. Focus on injury-related medical expenses conditionally paid by Medicare (personal injury cases).The pre- and post-12/5/80 conundrum.Opening the tort recovery record as a condition precedent to payment by settling party.Proof of payment a condition for settling partyProof of payment a condition for settling party.

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Collaboration in Practice

6 step process to get money 6 step process to get money flowing after settlement:

1. Settlement agreement contains representations and warranties2 Pl i tiff h id t t d h b d ith M di 2. Plaintiff shares evidence tort recovery record has been opened with Medicare

(i.e. results of entitlement search)3. Defendant pays settlement proceeds to counsel4 Counsel agrees to hold back all net proceeds until conditional payment 4. Counsel agrees to hold back all net proceeds until conditional payment

amount received from Medicare (not necessary to hold back attorney fees/expenses because Medicare allows offsets for those)

5 Counsel then holds back conditional payment amount plus reasonable buffer 5. Counsel then holds back conditional payment amount plus reasonable buffer and distributes balance

6. After final resolution, plaintiff provides proof of satisfaction back to defendant

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P l I j Cl i & ThPersonal Injury Claims & The Medicare Secondary Payer ActMedicare Secondary Payer Act

d d bWednesday, September 28, 2011

J.R. Whaley [email protected] 1-800-256-1050

Preliminary Questionsy

• Has your client been a Medicare beneficiary?Has your client been a Medicare beneficiary?

• Is your client presently on Medicare?

SS ?• SSDI?

• Applied for SSDI?


Reporting Obligations of a Liability S ttl tSettlement

• Report to COBC information about the claimReport to COBC information about the claim (Medicare number, injury, date of injury).

• Consent forms/proof of representation to• Consent forms/proof of representation to MSPRC.

Ad l d d di li• Adverse unrelated payments and dispute lien amounts.

• Report the settlement.


Plaintiff Attorney Should (Must):y ( )

• Report to COBCReport to COBC.

• Report to MSPRC.

h li• Pay the lien.


Failure to Make the Appropriate P tPayment

• If Medicare is forced to litigate to receiveIf Medicare is forced to litigate to receive reimbursement of conditional payments, double the amount is due plus interestdouble the amount is due, plus interest.

• Attorney has direct liability for reimbursementreimbursement.

• Client may lose Medicare coverage and Social S i ff b fiSecurity may offset benefits.


Personal Injury Claims and the Medicare Secondary Payer Act

Jeremy T. Burton312.443.3284jtb@ ill [email protected]

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Reporting Requirementsp g q

The new law, Section 111 of the Medicare, MedicaidThe new law, Section 111 of the Medicare, Medicaidand SCHIP Extension Act of 2007 (MMSEA Section)

“Add d t ti i t ith t“Adds mandatory reporting requirements with respectto Medicare beneficiaries who have coverage undergroup health plan arrangements as well as forg p p gMedicare beneficiaries who receive settlements,judgments, awards or other payment from liabilityinsurance, no-fault insurance, or workers’insurance, no fault insurance, or workerscompensation.”

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Reporting Requirementsp g qThe administrator of any liability insurance plan mustreport money paid pursuant to any settlement,p y p p y ,judgment, award or other payment. 42 USC1395y(b)(8)(F).

Liability insurance is defined as coverage thatindemnifies or pays on behalf of the policyholder orself-insured entity against clams of negligence,inappropriate action, or inaction which results ininjury or illness to an individual or damage toj y gproperty.

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Reporting Requirements - Timelinep g qImplementation dates for the new law were originallyJanuary 1 2009 for group health plans to register andJanuary 1, 2009 for group health plans to register andJuly 1, 2009 for liability insurers to register.

Insurers must report all claims with settlement dateson or after October 1, 2011.

In certain cases where an insurer has ongoingresponsibility for medical claims claims arising afterresponsibility for medical claims, claims arising afterJanuary 1, 2010 must be reported.

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Reporting Requirements - Timelinep g q

Medicare beneficiaries who receive a liabilitysettlement judgment award or other paymentsettlement, judgment, award or other paymenthave an obligation to refund associated conditionalpayments within 60 days of receipt of suchpayments within 60 days of receipt of suchsettlement, judgment, award, or other payment.

If Medicare is not reimbursed by the beneficiary,payment becomes the responsibility of the primarypayer.

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Reporting Requirements - Penaltiesp g q

The CMS has a right of action to recover itspayments from any entity including a beneficiarypayments from any entity, including a beneficiary,provider, supplier, physician, attorney, Stateagency or private insurer that has received aagency or private insurer that has received aprimary payment.

42 CFR Sec. 411.24(g)

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Reporting Requirements - Penaltiesp g q

If Medicare is not reimbursed as required byparagraph (h) of this section the primary payerparagraph (h) of this section, the primary payermust reimburse Medicare even though it hasalready reimbursed the beneficiary or other party.already reimbursed the beneficiary or other party.

42 CFR Sec. 411.24(i)4 4 4( )

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Reporting Requirements - Penaltiesp g qThe United States can collect double damages andattorneys fees against any entity not paying under they g y y p y gnew statute.

F rthermoreFurthermore,

An applicable plan that fails to comply with thepp p p yMedicare reporting requirements is subject to a civilmoney penalty of $1,000 for each day ofnoncompliance with respect to each claimant 42 USCnoncompliance with respect to each claimant. 42 USCSec. 1395y(b)(8)(E)(i)

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Medicare Query – Form Ay

Create a Medicare Query Form and make it part of theCreate a Medicare Query Form and make it part of thediscovery process. A Medicare Query form allows youto determine whether Medicare is seeking recovery ofa lien for the plaintiff beneficiarya lien for the plaintiff beneficiary.

The A-1 form used in Illinois simply asks if thep yplaintiff has ever been enrolled in Medicare Part A orB, and contains sections for the plaintiff’s full name,Medicare Claim Number, Date of Birth, SocialMedicare Claim Number, Date of Birth, SocialSecurity Number and Sex.

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Medicare Query – Form ByAt the time settlement is finalized, you shouldsubmit an additional form to Medicare (Form B).submit an additional form to Medicare (Form B).Medicare Form B requires all of the sameinformation contained in the A-1 form as well asi f ti th t M di i h thinformation that Medicare requires such as thediagnosis code for the plaintiff’s illness, the nameof the settling defendant, the date of settlement,of the settling defendant, the date of settlement,the amount of settlement and information on thefunding of settlement. By court order, Form B is

q i d t b k t fid ti l b th l i tiffrequired to be kept confidential by the plaintiffs,defendants and their clients.

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Settlement Agreementsg(1) Defendant will not include any agency of the U.S.Government or its designee as a payee on the settlementh kcheck.

(2) PLAINTIFF'S FIRM agrees to hold in its trustaccount sufficient funds to pay all Medicare claims or liensaccount sufficient funds to pay all Medicare claims or liensrelating to such settlement, claim and legal action or has infact satisfied all Medicare claims or liens in full.PLAINTIFF'S FIRM will notify the U S Government or itsPLAINTIFF S FIRM will notify the U.S. Government or itsdesignee, including CMS, of any settlement which thisAgreement governs and will work to satisfy or otherwiseobtain discharge or release of any Medicare claim or lien

l d d fg y

including "set asides," if any.•

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Settlement Agreementsg(3) If defendant receives a claim for any unsatisfied Medicare claim or lien by lawsuit orotherwise, relating to the above-described settlements, claims and legal actions, defendant willnotify PLAINTIFF'S FIRM by regular mail and request from them any evidence that the claimor lien has been satisfied in full which defendant will provide to the governmental authority oror lien has been satisfied in full which defendant will provide to the governmental authority orits designee. If such evidence is not forthcoming or fails to resolve the claim in full withoutpayment by defendant, defendant may by regular mail notify PLAINTIFF'S FIRM toundertake the principal response to the matter or to arrange payment or other resolution. Ifthe U.S. government or its designee including CMS brings suit, PLAINTIFF'S FIRM willundertake the principal defense of such matter whether joined by the U.S. government or itsp p j y gdesignee including CMS or joined by defendant through third party claim or otherwise.PLAINTIFF'S FIRM will not undertake to represent defendant as its client. PLAINTIFF'SFIRM will be liable to defendant for the amount owed or paid by such defendant to the UnitedStates Government or its designee including CMS for the allegedly unsatisfied Medicare claimor lien plus all attorney fees and out of pocket expenses reasonably necessary and incurred to

bt i j d t ttl t f PLAINTIFF'S FIRM f th t d h d Bobtain judgment or settlement from PLAINTIFF'S FIRM for the amount due hereunder. Byconsenting to entry of judgment for any amounts due to defendant pursuant to thisagreement, PLAINTIFF'S FIRM may cut off liability to defendant for any attorney fees and outof pocket expenses incurred after the date of such judgment. PLAINTIFF'S FIRM will not beliable to defendant for any attorney fees and out of pocket expenses to defend the claimbrought by the U S government or its designee including CMSbrought by the U.S. government or its designee including CMS.

P l I j Cl i & ThPersonal Injury Claims & The Medicare Secondary Payer ActMedicare Secondary Payer Act

d d bWednesday, September 28, 2011


Section 111 Cases

• Section 111 Requires extensive information including beneficiary SSN or HICN for Defense to report claimHICN, for Defense to report claim

• Seger v. Tank Connection, LLC, Docket No. 8:08CV75, 2010 U.S. Dist. LEXIS 49013 (D Neb Apr 22 2010)LEXIS 49013 (D. Neb. Apr. 22, 2010)– Court finds discovery requests for SSN and Medicare card reasonable

based on Section 111 reporting requirements, and specifically the “query process”

• Hackley v. Garofano, 2010 Conn. Super. LEXIS 1669 (Sup. Ct. Ct. July 1, 2010)– Carrier allowed to withhold settlement payment until Plaintiff provides– Carrier allowed to withhold settlement payment until Plaintiff provides

SSN and other data needed for Section 111 Reporting

J.R. Whaley [email protected] 1-800-256-1050Sylvius von Saucken [email protected] 1-888-556-7526

U.S. v. Stricker

• United States of America v. Stricker, et al., No. 09-2423 (N.D. Ala. September 30 2010)30, 2010)– Government sued plaintiffs lawyers, defendants and insurers. – Court grants Motions to Dismiss on basis of 42 U.S.C. 2415 – Federal

Claim Collection Act Limitations Periods– Court adopts three year period against Defendants and Insurers, based upon

28 U.S.C. 2415(b) and tort nature of the underlying claim– Court adopts six year period against Plaintiffs’ lawyers, based upon 28

U.S.C. 2415(c) and contract nature of the underlying relationship• Motion for Reconsideration for later claims and later settlement payments –p y

recently decided against government


New Concerns for Defendants: U S St i kU.S. v. Stricker

• Why all the fuss? (Medicare’s SOL)Why all the fuss? (Medicare s SOL)

• Case Overview (8‐2003 ‐ 12/1/09 ‐ 9/30/10)

• Effect:Effect:

United States Government seeks recovery from the insurers and the other settling parties for fundsinsurers and the other settling parties for funds paid as settlement proceeds in a mass tort liability settlement


New Concerns for Settling Parties: Eff t f U S St i kEffects of U.S. v. Stricker

• Raises timing concerns re: Medicare compliance inRaises timing concerns re: Medicare compliance in light of this recent complaint/dismissal, especially when coupled with new MMSEA “settlement reporting” requirements for insurers

• So, does putting Medicare’s name on the check fix this problem?

• If not, who should resolve the liens?


MSA Case Law – MSA AppropriateSchexnayder (2011 LEXIS 83687)Schexnayder (2011 LEXIS 83687)

• Court found LMSA for $239,253.84 was Cou t ou d S o $ 39, 53.8 asreasonable. Why?• Parties agreed to set funds aside for MSA; created allocation; g

submitted to CMS for review/approval as condition of settlement.

• No response from CMS Why?• No response from CMS – Why?

• Joint motion for declaratory judgment to approve settlement.

• Court ratified what parties had already determined Therefore• Court ratified what parties had already determined. Therefore, MSA was created by the parties themselves, not the court.

J.R. Whaley [email protected] 1-800-256-1050Sylvius von Saucken [email protected] 1-888-556-7526 37

MSA Case Law – CMS Review/ApprovalSmith (2011 LEXIS 90428)Smith (2011 LEXIS 90428)

• Court found WCMSA for $14,647 was reasonable. Cou t ou d C S o $ ,6 as easo ab e.Why?• Parties agreed to set funds aside for MSA; created allocation; g

submitted to CMS for review/approval as condition of settlement.

• CMS declines opportunity to review Why?• CMS declines opportunity to review – Why?

• Joint motion for declaratory judgment to approve settlement.

• Court ratified what parties had already determined Therefore• Court ratified what parties had already determined. Therefore, CMS future interests protected without requiring CMS approval.


MSA Case Law – MSA Not AppropriateFinke (2009 WL 6326944)Finke (2009 WL 6326944)

• Liability settlement where Court found noLiability settlement where Court found no LMSA needed to properly consider and protect Medicare’s future interest. Why?• Plaintiff identified/satisfied Medicare conditional payment obligation.

• Plaintiff covered by private insurance going forward (spouse’s policy).

• Therefore, no LMSA needed to reasonably consider and protect Medicare’s future interest.


H.R. 1063 – The SMART Act

Goal = Improve the current MSP system IssuesParties hesitant to resolve claims without knowing

conditional payment reimbursement amountThe current system involves significant delays

Following the MSP Enhancement Act (which died in cmmte), the SMART Act would:the SMART Act would: Permit pre-settlement Cond Payment reports from Mcare;Establish a timeline for receipt of those reports;p p ;Change the admin. remedies (appeals to fed d. ct);Provide reporting safe harbors & reimb. thresholds;

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Change the SSN requirements for MMSEA; andSet a 3 year SOL.

MSP and Congress – One step closer to reform

Hearing on the Hill – June 22, 2011House Sub Committee hears from stakeholders on all sideHouse Sub-Committee hears from stakeholders on all sideCMS (CFO, D. Taylor)Self-insureds & insurers (Publixx, Cin. Insur. Co.)Self insureds & insurers (Publixx, Cin. Insur. Co.)Plaintiff’s counsel (Pennsylvania atty)

Questions addressedIs the MSP system working for the taxpayers?Does Congress need to provide additional MSP tools? What is the current scope & capacity of the MSPRC?What is the current scope & capacity of the MSPRC?Are there amounts CMS will not chase?Should there be a minimum threshold?

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Should there be a minimum threshold?

The Takeaways

1. Improve Case / Claims Intake Process2. Internal Education – Attorneys and Staff3. Educate Your Clients 4 U d t F A t

What can I do now to implement a comprehensive strategy for healthcare compliance in my firm

4. Update Fee Agreement 5. Seek Third Party Assistance

p yor company?

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Improve Case / Claims Intake Process

In every case, the parties must…In every case, the parties must…Determine the parties’ affirmative obligations (verify, notify, p g ( y, y,resolve, report, satisfy, etc.);Assess third party recovery rights (Medicare, Medicaid, private, ERISA, etc.);Audit and analyze all reimbursement claims to “carve out” items unrelated to claims;Decide who should pursue relevant administrative or legal p gremedies, such as damage allocation, waivers, and compromises, to ensure the appropriate “net” recovery for the injured individual; andAddress other healthcare-related settlement issues, such as the propriety of Medicare Set Asides (MSAs).

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