DETERMINATION OF MEDICARE ISSUES IN WORKERS COMPENSATION CASES 2008

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1 DETERMINATION OF MEDICARE ISSUES IN WORKERS COMPENSATION CASES 2008 Michael E. Rusin Rusin, Maciorowski & Friedman, Ltd 10 S. Riverside Plaza Chicago, IL

2 OUTLINE Determination of Medicare Issues in Workers Compensation Cases. I. INTRODUCTION A. What is Medicare? B. Medicare secondary payer statute: 1. Passed 1981 to curb Medicare costs. Enforcement begins in Workers Compensation employers and their carriers are primary payers for medical expenses; Medicare is a secondary payer. 3. Medicare not required to pay for medical items and services to the extent payment has been made or can reasonably be expected to be paid under Workers Compensation plan; and 4. Medicare entitled to reimbursement for conditional payments made for a work-related injury. C. Overcoming the Medicare fear factor analysis of issues is similar. II. WHEN DO MEDICARE ISSUES ARISE IN W.C. CASES? Two ways: Conditional Payment Issue claimant is already enrolled in Medicare and Medicare has paid for medical treatment related to a work injury. Medicare Set-Aside (MSA) Issue where claimant s future medical costs need to be addressed and evaluated as part of a settlement to reduce or eliminate an employer s payments. A. Conditional Payment Issue 1. Independent of MSA. 2

3 2. Overlooked but important issue. 3. Priority right of recovery. 4. Handling Undisputed Claims. a. Early verification of claimant beneficiary status. b. Determine if Medicare payments via authorization/request. c. Respond to notifications. d. Prompt reimbursement. 5. Handling Disputed Claims a. Verification of status and amount of payments. b. Send notice of controversion evidence. c. Seek waiver. 6. Penalties for Non-Payment a. Interest on amount. b. Double damages. c. Duplicate payment. B. MSA Future Medical Issue 1. Threshold Question does Medicare have future medical interest in a settlement which requires protection? 2. Determining Factors a. Beneficiary Classes i. Class I claimant is either 65 years old or older OR has been on SSDI for two years or more, and, the settlement is $25, or more. 3

4 ii. Class II there is a reasonable expectation of claimant being enrolled within 30 months of the settlement, and, the settlement is $250, or more. Reasonable Expectation Defined 30 month general rule disability date determines eligibility date: /2 years old; - already receiving SSDI benefits but less than 2 years; - applied for SSDI benefits; - denied SSDI but appealing or re-filing. b. Calculation of Monetary Threshold Levels ($25, or $250,000.00) i. Indemnity and vocational sums. ii. iii. iv. Attorneys fees and court costs. Amount of conditional payments. Prior partial settlement payment. v. If structured actual annuity sum, not present cash. III. WHAT CONSTITUTES ADEQUATE CONSIDERATION OF MEDICARE S INTERESTS? A. Meaning of Adequate Consideration 1. CMS view 2. General Rule if class and monetary threshold criterion met do submission. 3. Thresholds a. No safe harbor assess potential risk. 4

5 b. Procedures to protect confirm submission not required by CMS. IV. FACTORS AND METHODS TO CONSIDER FOR MSA DETERMINATIONS AND SUBMISSIONS A. Disputed Cases Defeating MSA Allocations 1. $0.00 or waiver submission. a. Procedure. 2. Waiver in contract prohibited. 3. Findings in settlement contracts a. With trial accepted. b. Without trial not accepted. B. Undisputed Cases Factors to Consider in Submission 1. Carrier policies and procedures. 2. Nature of injury: a. Catastrophic vs. non-catastrophic. 3. Rated age use. 4. Administration of MSA. 5. Funding methods. 6. Settlement terms a. Modification or reversion of funds. 7. Timing options for payment and approval. V. APPEAL OF CMS DETERMINATION A. No current legal process. B. Reconsideration/redetermination. 5

6 WHAT IS MEDICARE? Federal healthcare program for covered workers who are retired or disabled. Don t confuse with Medicaid. 6

7 GENERAL RULE When Medicare May Have An Interest If the claimant is less than 65 years old, and has been receiving Social Security Disability Income benefits for 2 years or more, he is entitled to Medicare. If the claimant is 65 years or older, he is entitled to Medicare. If the claimant is less than 65 years old, has applied for Social Security Disability and could be entitled to Medicare in 30 months. 7

8 WHEN DOES MEDICARE AFFECT W.C. CASES? Anytime Medicare has paid for any past healthcare costs for an individual s on-the-job injury (must be already enrolled). Settlement amount is for 25K or greater and claimant is already entitled to Medicare or Settlement amount is for $250,000 or greater and it is anticipated that the claimant will be entitled to Medicare within 30 months. 8

9 WHEN DO MEDICARE BENEFITS COMMENCE? SSDI benefits do not begin until 6 months after disability date. Eligibility effective 24 months after the individual s commencement of SSDI benefits. Thus, Medicare enrollment takes place 30 months after the date of disability. Remember, age 65 or older is automatic. 9

10 MEDICARE S RIGHTS Regarding Conditional Payments Not a lien, but a separate and direct right of action. Medicare not required to give notice to protect its rights. Primary payer may be required to reimburse Medicare even if it has already reimbursed or settled with the beneficiary or another party. Medicare may be entitled to double damages if the primary payer knew or should have known of Medicare s payments and paid the beneficiary anyway. 10

11 IS A MEDICARE SET-ASIDE NEEDED? Class I Is the claimant a Medicare beneficiary? (65 years or older or receiving SSDI benefits for 24 months) YES If the settlement is for $25, or more, an MSA and CMS approval is needed. NO If the settlement is for less than $25,000.00, an MSA and CMS approval are NOT needed. Class II Is the settlement for more than $250, AND is there REASONABLE EXPECTATION of the claimant becoming a Medicare beneficiary within 30 months from the date of settlement? REASONABLE EXPECTATION includes: 1. Currently receiving SSDI benefits 2. Has applied for SSDI benefits years old or older 4. Denied SSD benefits, but is appealing denial YES NO If claimant meets one or more of If claimant meets one or those criteria AND the settlement more of those criteria but is over $250,000.00, an MSA and the settlement is less than CMS approval is needed. $250, Include the following in calculating the total settlement amount: 1. Money paid at time of settlement for future medical expenses, including prescription medications. 2. Money paid at time of settlement for indemnity/vocational benefits. 3. Attorney fees paid in settlement. 4. Court costs and filing fees. 5. Medicare conditional payment claims; if any 6. Money paid in prior partial settlement W:\DOCS\9999\02\ DOC 11 Copyright December 2008 by Michael E. Rusin.

Medicare Claims/Liens and Medicare Set-Asides: What do they mean to your practice? Brett Newman

Medicare Claims/Liens and Medicare Set-Asides: What do they mean to your practice? Brett Newman What is Medicare? A brief history In 1965 the United States Congress passed legislation to create the Medicare