MEDICARE COMPLIANCE
Welcome to Synergy’s blog page dedicated to the topic of Medicare compliance. Our team of Medicare experts share their InSights and knowledge on the latest developments and best practices for law firms to stay compliant with the MSP. Stay up-to-date with the latest trends and strategies to ensure that you have the information you need to navigate the complex world of Medicare compliance. Our blogs provide practical tips and advice for ensuring that your clients receive the medical care they need while complying with Medicare’s requirements. Let our experts guide you through the intricacies of Medicare compliance and help you stay on top of the latest developments in this rapidly-evolving field.
March 2, 2020
The 11th Circuit Court of Appeals weighed in on the question of whether the Medicare statute, which provides a three-year timeline to the government to request repayment, applies to a private entity providing Medicare benefits (Medicare Advantage plans). The Court’s answer is that the claims filing provision does not bar a claim and that the timeline is not a precondition to filing suit.
Basic primer on Medicare. When Medicare pays for accident-related treatment, it is entitled to be paid by the primary payor. Its payment is made as a conditional payment, conditioned on repayment when other funds become available. In the case of an accident, that could be medical payments coverage, bodily injury coverage or an uninsured/underinsured coverage. If Medicare seeks reimbursement and is denied, the United States can sue the primary plan to recover its payment. If the cause of action is successful, Medicare can be awarded double damages.
Section 1395y(b)(2)(B)(iii) contains a three-year statute of limitations that requires the government to sue within three years of the date that Medicare receives notice of a primary payer’s responsibility to pay.
(iii) Action by United States
… An action may not be brought by the United States under this clause with respect to payment owed unless the complaint is filed not later than 3 years after the date of the receipt of notice of a settlement, judgment, award, or other payment made pursuant to paragraph (8) relating to such payment owed.
(vi) Claims-filing period
Notwithstanding any other time limits that may exist for filing a claim under an employer group health plan, the United States may seek to recover conditional payments in accordance with this subparagraph where the request for payment is submitted to the entity required or responsible under this subsection to pay with respect to the item or service (or any portion thereof) under a primary plan within the 3-year period beginning on the date on which the item or service was furnished.
A few sections down lies § 1395y(b)(3)(A), which provides a private cause of action available to Medicare beneficiaries and other private entities if a primary plan fails to provide primary payment or reimbursement. This section does not contain a statute of limitations.
(A) Private cause of action
There is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).
This is where the Medicare Advantage plan enters. In 1997, Congress enacted Medicare Part C or “Medicare Advantage” program (also known as MAP, Med A, MA, MAO). These plans are administered by private insurance companies that provide Medicare benefits for fixed fees from the Center for Medicare and Medicaid Services. 42 U.S.C. § 1395w-22(a)(4) states that a Medicare Advantage plan may charge a primary plan when a payment “is made secondary pursuant to section 1395y(b)(2).” This established that Medicare Advantage plans can sue under the MSPA to recover from primary plans if they do not pay. These plans must use the MSPA’s private cause of action versus the government cause of action.
In the MSPA Claims v. Kingsway Amigo, 2020 U.S. App. LEXIS 4554 (February 13, 2020), the Court found that there is nothing within the statutory language or structure to suggest the Medicare Advantage plan must comply with the claims filing provision as a prerequisite to seeking reimbursement. The decision starts with a warning as the second sentence of the opinion acknowledges that the case “turns on a careful examination of the often-convoluted rules governing the federal Medicare program.” The court painstakingly reviews the statutory structure of the Medicare statute even with a little levity; the opinion states “Okay, time for a deep breath and a summary.”
The Court found that the dependent “notwithstanding” clause and the permissive term “may” in the actual text of the MSP claims filing provision means that Medicare Advantage plans are not required to bring suit as a prerequisite in the 3-year period. Specifically stating, “[w]ords in a statute must be interpreted according to their ordinary meaning and “may” cannot, by any rendering, mean “must.” The Court finds that when a statute uses the word “may,” it “implies that what follows is a permissive rule and that it does not create a separate bar that private Medicare Advantage plans must overcome in order to sue.
The importance of this decision can’t be overstated. With no statute of limitations, the private cause of action provisions that MAO’s have been using so aggressively to recover are even more powerful. Insurers are becoming increasingly more fearful of failure to repay MAOs and this can lead to delays in resolution of a settlement when there are potential Medicare conditional payment or advantage plan liens. In addition, personal injury lawyers can be the targets of these types of private causes of action as well which in turn gives trial lawyers another thing to worry about when it comes to lien resolution. Because of these sorts of issues, now more than ever, insurers may want to directly pay MAO liens back directly and demand indemnification.
To avoid these types of scenarios and alleviate concerns, work with Synergy as your partner in bringing to resolution all liens asserted by Medicare Advantage plans, Medicare supplement plans and traditional Medicare outside of litigation. We also offer lien reduction services for many other lien types including ERISA, FEHBA, Military, Disability and Medicaid.
January 17, 2020
By Jason D. Lazarus, J.D., LL.M., MSCC, CSSC
Failure to Pay Equals Personal Liability
The government takes its reimbursement rights seriously and is willing to pursue trial lawyers who ignore Medicare’s interest. On March 18, 2019, the United States Attorney for the District of Maryland announced that a Maryland personal injury law firm had agreed to pay the United States $250,000 to settle allegations that the firm failed to reimburse Medicare for payments made on behalf of its client. As part of the settlement, the firm “also agreed to (1) designate a person at the firm responsible for paying Medicare secondary payer debts; (2) train the designated employee to ensure that the firm pays these debts on a timely basis; and (3) review any outstanding debts with the designated employee at least every six months to ensure compliance.”
This is the second such settlement in last year. Back In June of 2018, the U.S. Department of Justice announced a settlement with a Philadelphia personal injury law firm involving failure to reimburse Medicare. The firm agreed to start a “compliance program” and the DOJ stated that this “settlement agreement should remind personal injury lawyers and others of their obligation to reimburse Medicare for conditional payments after receiving settlement or judgment proceeds for their clients.”
Consequently in today’s complicated regulatory landscape, a comprehensive plan for Medicare compliance has become vitally important to personal injury practices. Lawyers assisting Medicare beneficiaries are personally exposed to damages and malpractice risks daily when they handle or resolve cases for Medicare beneficiaries. A prime example of the risk and personal liability is U.S. v. Harris, a November 2008 opinion.[1] In Harris, a personal injury plaintiff lawyer lost his motion to dismiss against the U.S. Government in a suit involving the failure to satisfy a Medicare subrogation claim. The plaintiff, the United States of America, filed for declaratory judgment and money damages against the personal injury attorney owed to the Centers for Medicare and Medicaid Services by virtue of third party payments made to a Medicare beneficiary.[2] The personal injury attorney had settled a claim for a Medicare beneficiary (James Ritchea) for $25,000.[3] Medicare had made conditional payments in the amount of $22,549.67. After settlement, plaintiff counsel sent Medicare the details of the settlement and Medicare calculated they were owed approximately $10,253.59 out of the $25,000 settlement.[4] Plaintiff counsel failed to pay this amount and the Government filed suit.
A motion to dismiss filed by plaintiff counsel was denied by the United States District Court for the Northern District of West Virginia despite plaintiff counsel’s arguments that he had no personal liability. Plaintiff counsel argued that he could not be held liable individually under 42 U.S.C. 1395y(b)(2) because he forwarded the details of the settlement to the government and thus the settlement funds were distributed to his clients with the government’s knowledge and consent. The court disagreed. The court pointed out that the government may under 42 U.S.C. 1395y(b)(2)(B)(iii) “recover under this clause from any entity that has received payment from a primary plan or from the proceeds of a primary plan’s payment to any entity.” Further, the court pointed to the federal regulations implementing the MSPS which state that CMS has a right of action to recover its payments from any entity including an attorney.[5] Subsequently, the U.S. Government filed a motion for summary judgment against plaintiff counsel. The United States District Court, in March of 2009, granted the motion for summary judgment against plaintiff counsel and held the Government was entitled to a judgment in the amount of $11,367.78 plus interest.[6]
Resolution of the Government’s interests concerning conditional payment obligations is simple in application but time-consuming. The process of reporting the settlement starts with contacting the Benefits Coordination Recovery Contractor (BCRC).[7] This starts prior to settlement so that you can obtain and review a conditional payment letter (CPL).[8] These letters are preliminary and cannot be relied upon to satisfy Medicare’s interest. However, they are necessary to review and audit for removal of unrelated care. Once settlement is achieved, Medicare must be given the details regarding settlement so that they issue a final demand. Once the final demand is issued, Medicare must be paid its final demand amount regardless of whether an appeal, compromise or waiver is sought.[9] Paying the final demand amount within sixty days of issuance is required or interest begins to accrue at over ten percent and ultimately it is referred to the U.S. Treasury for an enforcement action to recover the unpaid amount if not addressed.[10]
Resolution of Conditional Payments – Appeal, Compromise or Waiver
The repayment formula for Medicare is set by the Code of Federal Regulations. 411.37(c) & (d) prescribe a reduction for procurement costs and that is it.[11] The formula does not take into account liability related issues in the case, caps on damages or policy limits. The end result can be that the entire settlement must be used to reimburse Medicare. The only alternatives are to appeal, which requires you to go through four levels of internal Medicare appeals before you ever get to step foot before a federal judge or compromise/waiver. There is plenty of case law requiring exhaustion of the internal Medicare appeals processes which means that Medicare appeals are lengthy as well as an unattractive resolution method.[12] What makes them even more unattractive is the fact that interest continues to accrue during the appeal so long as the final demand amount remains unpaid.
An alternative resolution method is requesting a compromise or waiver post payment of the final demand. By paying Medicare their final demand and requesting compromise/waiver, the interest meter stops running. If Medicare grants a compromise or waiver, they actually issue a refund back to the Medicare beneficiary. There are three viable ways to request a compromise/waiver. The first is via Section 1870(c) of the Social Security Act which is the financial hardship waiver and is evaluated by the BCRC.[13] The second is via section 1862(b) of the Social Security Act which is the “best interest of the program” waiver and is evaluated by CMS itself.[14] The final is under the Federal Claims Collection Act and the compromise request is evaluated by CMS.[15] If any of these are successfully granted, Medicare will refund the amount that was paid via the final demand or a portion thereof depending on whether it is a full waiver or just a compromise.
[1] U.S. v. Harris, No. 5:08CV102, 2009 WL 891931 (N.D. W.Va. Mar. 26, 2009), aff’d 334 Fed. Appx 569 (4th Cir. 2009).
[2] Id. at *1.
[3] Id.
[4] Id.
[5] See 42 C.F.R. 411.24 (g).
[6] U.S. v. Harris, No. 5:08CV102, 2009 WL 891931 at *5.
[7] See https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Attorney-Services/Attorney-Services.html
[8] See https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Attorney-Services/Conditional-Payment-Information/Conditional-Payment-Information.html
[9] Id.
[10] 42 C.F.R. 411.24(m).
[11] 42 C.F.R. 411.37(c) &(d).
[12] A perfect example of this is Alcorn v. Pepples out of the Western District of Kentucky. In Alcorn, the court held that “Alcorn’s claim with respect to the Secretary arises under the Medicare Act because it rests on the repayment obligations set forth under 42 U.S.C. § 1395y. She therefore must exhaust the administrative remedies established under the Medicare Act before this court may exercise subject matter jurisdiction over her claim.” Alcorn v. Pepples, 2011 U.S. Dist. LEXIS 19627 (W.D. Ky. Feb. 25, 2011).
[13] 42 U.S.C. § 1395gg
[14] 42 U.S.C § 1395y
[15] 31 U.S.C. § 3711
January 8, 2020
By: Jason D. Lazarus, J.D., LL.M., MSCC
The Department of Justice (DOJ) is serious about and intent on enforcement of the Medicare Secondary Payer Act when it comes to conditional payments. There are now numerous examples of these actions being taken by the DOJ. In this instance, the case against a Philadelphia-based law firm was handled by Assistant United States Attorney Michael S. Macko, acting upon a referral from Eric S. Wolfish, Assistant Regional Counsel for the U.S. Department of Health and Human Services, Office of the General Counsel, Region III. In a recent release, U.S. Attorney William M. McSwain announced “that a Philadelphia-based personal injury law firm, Simon & Simon, P.C., has entered into a settlement agreement with the United States to resolve allegations that it failed to reimburse the United States for certain Medicare payments.”
According to a press release issued by McSwain, “[t]he government alleged that at various points between 2014 and 2019, Medicare made conditional payments to healthcare providers to satisfy medical bills of eight of the firm’s clients. Although Medicare demanded that Simon & Simon repay the resulting Medicare debts, the firm allegedly failed to do so.” As part of the settlement, like in other cases, the firm agreed to pay $6,604.59 to satisfy the debt owed to Medicare. In addition, the firm agreed to “(1) name a person responsible for paying Medicare secondary payer debts; (2) train the employee to ensure that the firm pays these debts on a timely basis; (3) review any additional outstanding debts to ensure compliance; and (4) provide written certifications of compliance.” The firm also acknowledged that any future “failure to submit timely repayment of Medicare secondary payer debt may result in liability for the wrongful retention of a government overpayment under the False Claims Act.”
According to the release:
“The government’s investigation arose under the Social Security Act’s Medicare Secondary Payer provisions. This law authorizes Medicare, as a secondary payer, to make conditional payments for medical items or services under certain circumstances. When an injured person receives a settlement or judgment, Medicare regulations require entities who receive the settlement or judgment proceeds, such as the injured person’s attorney, to repay Medicare within 60 days for its conditional payments. If Medicare does not receive timely repayment, these regulations permit the government to recover the conditional payments from the injured person’s attorney and anyone else who received the settlement or judgment proceeds.”
No law firm wants to have the DOJ investigating them for failing to reimburse conditional payments. According to the press release by the DOJ, “[t]his settlement agreement should remind personal injury lawyers and others of their obligation to reimburse Medicare when they receive settlement or judgment proceeds for their clients,” said U.S. Attorney McSwain. “Lawyers need to set a good example and follow the rules of the road for Medicare reimbursement. If they don’t, we will move aggressively to recover the money for taxpayers.” Given the foregoing, in today’s complicated regulatory landscape, a comprehensive plan for Medicare compliance has become vitally important to personal injury practices. Lawyers assisting Medicare beneficiaries are personally exposed to damages and malpractice risks daily when they handle or resolve cases for Medicare beneficiaries. Synergy can be your resource for total Medicare compliance and help you avoid the liability illustrated by these types of government actions. For a deeper dive, you can view the following 15-minute video presentation on this subject at: https://youtu.be/2EH7QWjj2zw.
B. Josh Pettingill
For over a decade, there has been episodic activity from Centers for Medicare and Medicaid Services (CMS) on Liability Medicare Set-Asides (LMSAs), including but not limited to, policy memorandums, Medicare Learning Network announcements, a notice of proposed rulemaking with subsequent withdrawal, an advanced notice of a notice of proposed rulemaking as well as the hiring of a new review contactor. As of the date of this update, we are still without formal policies for how to properly consider Medicare’s future interests in liability claims. But is it time for trial attorneys to start worrying? This brief post will provide some suggestions to be well-prepared for formal guidelines on LMSAs.
Key Takeaways
- Medicare Secondary Payor (MSP) compliance is serious business and should not be ignored.
- Plaintiff attorneys must establish an internal screening process for their liability cases involving Medicare beneficiaries.
- Plaintiff attorneys must be vigilant about MSP compliance from the start of the case.
- MSP compliance starts at the intake of the case.
If your firm does not have an internal process for auditing Medicare-eligible plaintiffs when you undertake representation, then you probably should be worried. If you are on the sidelines waiting around for formal guidelines to be implemented before you start being proactive on the issue, you are doing a disservice to yourself and your clients, as well as putting yourself at risk of being made an example by CMS for non-compliance with the MSP statute. This is so because the Department of Justice has already sued two different personal injury firms over non-compliance with the MSP related to conditional payments (see previous post HERE). You could also be setting yourself up for a legal malpractice claim for failure to educate your clients on the need to properly consider Medicare’s future interests. The good news is that it is not too late; the below can help get you started on establishing a framework within your firm for handling cases with Medicare-eligible plaintiffs.
- Identify Medicare beneficiaries as soon as possible so you can stay ahead of the MSP compliance issues.
- Follow CMS guidelines for reporting and resolving conditional payments.
- Investigate whether the client has ever received benefits under a Medicare Advantage plan (MAO – Part C). If yes, make sure to resolve the lien as it can be “hidden” (see previous post HERE)
- Audit your files at the beginning of the intake process and group the cases into categories based on the injuries, potential future care, available coverage, and potential settlement value to determine which files might be candidates for formal MSA screening.
- Identify all forms of health insurance coverage and disability benefits upon intake of the case so you know what liens have to be resolved as well as whether Medicare’s future interests need to be considered.
- Determine at the onset if future medicals are claimed which will be a key determinant in whether a Medicare Set-Aside should be considered.
- Update your retainer agreement language to allow you to engage your own Medicare experts as a case cost to the client.
From what we have observed firsthand, Medicare is not regularly denying claims on the basis that injury-related care should be paid for out of an MSA account (read more HERE); however, as recently as last month, CMS indicated that change is imminent as it relates to liability claims[1]. Whether or not CMS ever provides formal guidelines on liability MSAs, trial lawyers must establish their own processes for screening and auditing liability case files. For more information about liability MSAs visit us at https://bk-0726.partnerwithsynergy.com/total-medicare-compliance/.
[1] This was mentioned at the National Alliance of MSA Professionals (NAMSAP) annual conference in Baltimore, Maryland.
By Jason D. Lazarus, J.D., LL.M., MSCC
The government takes its reimbursement rights seriously and is willing to pursue trial lawyers who ignore Medicare’s interest. On November 4th, 2019, The United States Attorney for the District of Maryland announced that a Baltimore-based law firm paid the United States $91,406.98 to resolve allegations that it failed to pay back Medicare for conditional payments that had been paid on behalf of firm clients. The press release, while scant on details, seems to indicate that the firm had entered into a joint-representation agreement with co-counsel who in turn did not reimburse Medicare at settlement. According to U.S. Attorney Robert K. Hur, “Plaintiffs’ attorneys cannot refer a case to or enter into a joint representation agreement with co-counsel and simply wash their hands clean of their obligations to reimburse Medicare for its conditional payments.” He went on to say, “We intend to hold attorneys accountable for failing to make good on their obligations to repay Medicare for its conditional payments, regardless of whether they were the ones primarily handling the litigation for the plaintiff.”
Similarly, earlier this year in March, the United States Attorney for the District of Maryland announced that a Maryland personal injury law firm had agreed to pay the United States $250,000 to settle claims that it did not reimburse Medicare for payments made on behalf of a firm client. As part of the settlement, the firm “also agreed to (1) designate a person at the firm responsible for paying Medicare secondary payer debts; (2) train the designated employee to ensure that the firm pays these debts on a timely basis; and (3) review any outstanding debts with the designated employee at least every six months to ensure compliance.”
This is the third such settlement in the last two years. Back in June of 2018, the U.S. Department of Justice announced a settlement with a Philadelphia personal injury law firm involving failure to reimburse Medicare. The firm agreed to start a “compliance program” and the DOJ stated that this “settlement agreement should remind personal injury lawyers and others of their obligation to reimburse Medicare for conditional payments after receiving settlement or judgment proceeds for their clients.” The U.S. Attorney’s office also stated, “When an attorney fails to reimburse Medicare, the United States can recover from the attorney—even if the attorney already transmitted the proceeds to the client. Congress enacted these rules to ensure timely repayment from responsible parties, and we intend to hold attorneys accountable for failing to make good on their obligations.”
Consequently, in today’s complicated regulatory landscape, a comprehensive plan for Medicare compliance has become vitally important to personal injury practices. Lawyers assisting Medicare beneficiaries are personally exposed to damages and malpractice risks daily when they handle or resolve cases for Medicare beneficiaries. Synergy can be your resource for total Medicare Compliance. For a deeper dive, you can view the following 15-minute video presentation on this subject at: https://youtu.be/2EH7QWjj2zw
Jason D. Lazarus, J.D., LL.M., CSSC, MSCC
In the past, trial lawyers never had to worry about whether Medicare would pay for their client’s future care post-settlement. There is cause for concern that this may not be the case in the future. Consider this scenario – you represent a current Medicare beneficiary in a third-party liability case. As part of the workup of the case, you determine the client will need future medical care related to the injuries suffered. This could be determined by either deposing the treating physician or by the creation of a life care plan for litigation purposes. Ultimately, you settle the case. Since the client is a Medicare beneficiary, the defendant will report the settlement under the Mandatory Insurer Reporting law as it is greater than $750.00 in gross settlement proceeds. The defendant puts some language into the release about a Medicare Set-Aside being the injury victim’s responsibility and that they can’t shift the burden. Everyone signs the release and settlement dollars are paid. The file is closed, then forgotten. But what if that course of action triggers a denial of future care by Medicare?
For many years this was not even a concern for trial attorneys and their clients. However, the risk of this occurring is now a very real possibility. In fact, last year, a personal injury victim got this type of notice of denial for injury-related care from Medicare. The service provided was hospital outpatient clinic services under Part B of Medicare. The bill was denied, based upon the notice, because Medicare said “you may have funds set aside from your settlement to pay for your future medical expenses and prescription drug treatment related to your injury (ies).” The denial was related to a 2014 personal injury settlement wherein the Medicare beneficiary was paid money as damages for future injury-related care. Medicare’s position that an injury victim can’t settle their case and shift the burden to the Medicare Trust Fund for injury-related care isn’t new. Medicare has stated this premise over and over. This is just the first time anyone has seen an actual denial.
So, the question going forward is whether this was an isolated denial or actually represents Medicare’s shift to active enforcement of the Medicare Secondary Payer Act’s central premise. While it may provide some comfort to think this is an isolated incident, the reality is that Medicare Set-Asides are clearly a top priority and on the radar for CMS. As noted before in previous posts, there is currently an OMB Rulemaking process going on related to the Medicare Secondary Payer Act and Medicare Set-Asides. The insurance industry, the plaintiff bar, and industry stakeholders are all bending CMS’s ear regarding a future process. It is expected that proposed regulations will be disseminated sometime in the fall of 2019. The question in the interim is, what do you do to protect yourself from a malpractice claim and protect your client from a denial?
Unfortunately, there is no cookie-cutter answer. It is a case-by-case analysis. In some instances, there may be an argument that future medicals aren’t funded at all by the settlement. In other cases, there might be an argument that a reduced amount of future medicals should be set aside to satisfy obligations under the MSP because the case settled for less than full value. There are just too many possibilities to give a simple one size fits all answer. However, what is clear, doing nothing has its risks. For example, the client who received the denial of care likely will face a lengthy appeals process within Medicare that must be exhausted before ever getting to step foot into a Federal district court. In that scenario, the client is going to have to decide between paying out of their own pocket for future care or waiting for the care until exhausting all appeals and prevailing over Medicare.
While the problem created for the client is a serious one if they are denied care, an equally scary proposition for the trial lawyer is their exposure for malpractice claims in this scenario. Let’s assume that the injury victim who got this denial letter was not properly advised of the risks of failing to set aside money, would the trial lawyer potentially face a suit for legal malpractice? The answer is most likely they would. There could be all sorts of arguments made about whether they fell below the standard of care, but in the end, this is a known issue and one that is of the law. Worse yet, a trial lawyer and his/her firm could have Medicare breathing down their necks. While we haven’t see any instances of Medicare pursuing a law firm over failing to set up a Medicare Set-Aside, there are recent examples of law firms being pursued by the Department Of Justice (DOJ) related to other aspects of the MSP and failing to have a process internally to ensure compliance with the MSP. As part of a recent 2019 settlement after the DOJ brought action against a Maryland personal injury law firm, the firm agreed to pay $250,000 to resolve MSP claims and also agreed “to (1) designate a person at the firm responsible for paying Medicare secondary payer debts; (2) train the designated employee to ensure that the firm pays these debts on a timely basis; and (3) review any outstanding debts with the designated employee at least every six months to ensure compliance.” This was the second such settlement in a little over a year.
With these kinds of risks at stake, why do personal injury firms take their chances with the potential for denials of care, malpractice actions and worse yet government action? The answer is pretty simple, there is a lack of clarity of information and education about responsibilities under the MSP by Medicare. It falls upon industry stakeholders to try and make all the parties who are involved in personal injury lawsuits aware of these issues and how to effectively deal with them. So then the question is how do you make sure you are totally Medicare compliant?
Realizing there isn’t a definitive answer related to set-asides, we do have some recommendations:
- Put into place a method of screening your files to determine those that involve Medicare beneficiaries or those with a reasonable expectation of becoming a Medicare beneficiary within 30 months.
- Contact Medicare and report appropriately the settlement to get a final demand.
- Audit the final demand and avail yourself of the compromise/waiver process for conditional payments.
- Consult with client and explain the possibility of loss of future benefits without a Medicare Set-Aside so that an informed decision can be made about available options to consider Medicare’s future interests.
- Identify any potential Part C/MAO liens and resolve those as well.
Start early and do not let the defendant-insurer control the Medicare compliance process. At the outset of your case you have to confirm disability eligibility with Social Security and get copies of all insurance as well as government assistance cards. Make sure you understand who is potentially Medicare eligible such as those who are on SSDI, those turning 65, someone with end-stage renal disease (ESRD), Lou Gehrig’s disease (ALS) or a child disabled before age 22 with a parent drawing Social Security benefits. Collaborate with the other side regarding what is being reported under Mandatory Insurer Reporting laws. Be active in mandating the proper ICD codes to be included in the release to make sure reporting is accurate.
If a client is a Medicare beneficiary, then evaluate with the client the possibility of a set-aside. Discuss with competent experts the proper steps for MSP compliance. Properly word the release if a set aside is being used to make sure the client doesn’t get saddled with inappropriate language or lose itemized deductions. Appropriate planning will avoid a bad outcome.
Medicare beneficiaries must understand the risk of losing their Medicare coverage should they decide to set aside nothing from their personal injury settlement for future Medicare-covered expenses related to the injury. Properly educating the client is key to ensure an informed decision can be made relative to these issues. Beyond education of the client, the most critical issue becomes how to properly document your file about what was done and why with regard to MSP compliance. This part is where the experts come into play. For most practitioners, it is nearly impossible to know all of the nuances and issues that arise with the Medicare Secondary Payer Act. From identifying liens, resolving conditional payments, deciding to set money aside, the creation of the allocation to the release language and the funding/administration of a set-aside, there are issues that can be daunting for even the most well informed personal injury practitioner. Without proper consultation and guidance, mistakes can lead to unhappy clients, or worse yet, a legal malpractice claim.
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