Medicare Secondary Payer Act Strategies for Claims Settlement to Mitigate MSP and Section 111 Liability Risks

Transcription

1 Presenting a live 90 minute webinar with interactive Q&A Personal Injury Claims and the Medicare Secondary Payer Act Strategies for Claims Settlement to Mitigate MSP and Section 111 Liability Risks WEDNESDAY, SEPTEMBER 28, pm Eastern 12pm Central 11am Mountain 10am Pacific Td 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 The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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5 Today s Agenda 1 Mdi Medicare Insurer Reporting and MSP Compliance 2 Legislative and Case Law Updates 3 Release Language, Strategies and Practice Tips 5

6 Personal Injury j y Claims & Medicare Secondaryy Payer y Act September 28, 2011 Sylvius y H. von Saucken Garretson Resolution Group svs@garretsongroup.com

7 MSP: The Medicare Secondary Payer Act History MSP December 5, 1980 Medicare in 2003 MMA 301 (expanded liability) Medicare in Changes in MSPRC Medicare Part D Medicare in MMSEA (eff ) 10/1/10 no fault 10/1/11 - liability New CP procedures (eff. 10/1/09) MSP Reforms (HR 1063) 7

8 2011 MSP Compliance = 2 Obligations What do you mean by closing the loop? REPORTING OBLIGATION [ ] 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. e (Medicare e Set Asides) 8

9 2011 MSP Resolution = 2 Obligations Consider and Protect Medicare s interests Past Interest (Date of Injury to Date of Settlement) Verify and resolve conditional payments Future Interest (Date of Settlement Onward) Determine IF an MSA is appropriate under the case/claim specific facts AND document the file By making this determination: Medicare s future interest considered and protected Parties are MSP compliant (statute and regs) Claimant s Medicare benefits are protected 9

10 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 settlement What it means Requires starting much earlier Requires formal verification of entitlement 10

11 When Rules Change, So Must the Game Plan Agreement On Settlement Amount Old Post-Settlement Continuum Medicare / Medicaid Preservation (Trusts / Set Asides) Disbursement 11 Lien Reimbursement Structured Settlement Paperwork

12 New Settlement Continuum Lien Resolution Medicare / Medicaid Preservation (Trusts / Set- Asides) Agreement On Settlement Amount Structured Settlement Paperwork 12 Disbursement

13 Avoiding Confusion & Disruption 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 party. 13

14 Collaboration in Practice 6 step process to get money flowing after settlement: 1. Settlement agreement contains representations and warranties 2. Plaintiff shares evidence tort t recovery record has been opened with Medicare (i.e. results of entitlement search) 3. Defendant pays settlement proceeds to counsel 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 and distributes balance 6. After final resolution, plaintiff provides proof of satisfaction back to defendant 14

15 Personal linjury Claims & The Medicare Secondary Payer Act Wednesday, d September 28, 2011 J.R. Whaley jrwhaley@nbalawfirm.com

16 Preliminary Questions Has your client been a Medicare beneficiary? Is your client presently on Medicare? SSDI? Applied for SSDI? 16 J.R. Whaley jrwhaley@nbalawfirm.com

17 Reporting Obligations of a Liability Sttl Settlementt Report to COBC information about the claim (Medicare number, injury, date of injury). Consent forms/proof of representation to MSPRC. Adverse unrelated payments and dispute lien amounts. Report the settlement. 17 J.R. Whaley jrwhaley@nbalawfirm.com

18 Plaintiff Attorney Should (Must): Report to COBC. Report to MSPRC. Pay the lien. 18 J.R. Whaley

19 Failure to Make the Appropriate Payment If Medicare is forced to litigate to receive reimbursement of conditional payments, double theamount is due, plus interest. Attorney has direct liability for reimbursement. Client may lose Medicare coverage and Social Security may offset benefits. 19 J.R. Whaley

20 Personal Injury Claims and the Medicare Secondary Payer Act Jeremy T. Burton t

21 21 Reporting Requirements The new law, Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA Section) Adds 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, no-fault insurance, or workers compensation.

22 22 Reporting Requirements The administrator of any liability insurance plan must report money paid pursuant to any settlement, judgment, award or other payment. 42 USC 1395y(b)(8)(F). Liability insurance is defined as coverage that indemnifies or pays on behalf of the policyholder or self-insured entity against clams of negligence, inappropriate action, or inaction which results in injury or illness to an individual or damage to property.

23 23 Reporting Requirements - Timeline Implementation dates for the new law were originally January 1, 2009 for group health plans to register and July 1, 2009 for liability insurers to register. Insurers must report all claims with settlement dates on or after October 1, In certain cases where an insurer has ongoing responsibility for medical claims, claims arising after January 1, 2010 must be reported.

24 24 Reporting Requirements - Timeline Medicare beneficiaries who receive a liability settlement, judgment, award or other payment have an obligation to refund associated conditional payments within 60 days of receipt of such settlement, judgment, award, or other payment. If Medicare is not reimbursed by the beneficiary, payment becomes the responsibility of the primary payer.

25 25 Reporting Requirements - Penalties The CMS has a right of action to recover its payments from any entity, including a beneficiary, provider, supplier, physician, attorney, State agency or private insurer that has received a primary payment. 42 CFR Sec (g)

26 26 Reporting Requirements - Penalties If Medicare is not reimbursed as required by paragraph (h) of this section, the primary payer must reimburse Medicare even though it has already reimbursed the beneficiary or other party. 42CFRSec (i) 4 4(

27 27 Reporting Requirements - Penalties The United States can collect double damages and attorneys fees against any entity not paying under the new statute. Furthermore, An applicable plan that fails to comply py with the Medicare reporting requirements is subject to a civil money penalty of $1,000 for each day of noncompliance with respect to each claimant. 42 USC Sec. 1395y(b)(8)(E)(i)

28 28 Medicare Query Form A Create a Medicare Query Form and make it part of the discovery process. A Medicare Query form allows you to determine whether Medicare is seeking recovery of a lien for the plaintiff beneficiary. The A-1 form used in Illinois simply py asks if the plaintiff has ever been enrolled in Medicare Part A or B, and contains sections for the plaintiff s full name, Medicare Claim Number, Date of Birth, Social Security Number and Sex.

29 29 Medicare Query Form B At the time settlement is finalized, you should submit an additional form to Medicare (Form B). Medicare Form B requires all of the same information contained in the A-1 form as well as information thatt Medicare requires such as the diagnosis code for the plaintiff s illness, the name of the settling defendant, the date of settlement, the amount of settlement and information on the funding of settlement. By court order, Form B is required to be kept confidential by the plaintiffs, defendants and their clients.

30 30 Settlement Agreements (1) Defendant will not include any agency of the U.S. Government or its designee as a payee on the settlement check. (2) PLAINTIFF'S FIRM agrees to hold in its trust account sufficient funds to pay all Medicare claims or liens relating to such settlement, claim and legal action or has in fact satisfied all Medicare claims or liens in full. PLAINTIFF'S FIRM will notify the U.S. Government or its designee, including CMS, of any settlement which this Agreement governs and will work to satisfy or otherwise obtain discharge orreleaseofany Medicare claim or lien including "set asides," if any.

31 31 Settlement Agreements (3) If defendant receives a claim for any unsatisfied Medicare claim or lien by lawsuit or otherwise, relating to the above-described settlements, claims and legal actions, defendant will notify PLAINTIFF'S FIRM by regular mail and request from them any evidence that the claim or lien has been satisfied in full which defendant will provide to the governmental authority or its designee. If such evidence is not forthcoming or fails to resolve the claim in full without payment by defendant, defendant may by regular mail notify PLAINTIFF'S FIRM to undertake the principal response to the matter ortoarrangepaymentorotherresolution.if the U.S. government or its designee including CMS brings suit, PLAINTIFF'S FIRM will undertake the principal p defense of such matter whether joined by the U.S. government or its designee including CMS or joined by defendant through thirdparty claim or otherwise. PLAINTIFF'S FIRM will not undertake to represent defendant as its client. PLAINTIFF'S FIRM will be liable to defendant for the amount owed or paid by such defendant to the United States Government or its designee including CMS for the allegedly unsatisfied Medicare claim or lien plus all attorney fees and out of pocket expenses reasonably necessary and incurred to obtain judgment or settlement t from PLAINTIFF'S FIRM for the amount due hereunder. By consenting to entry of judgment for any amounts due to defendant pursuant to this agreement, PLAINTIFF'S FIRM may cut off liability to defendant for any attorney fees and out of pocket expenses incurred after the date of such judgment. PLAINTIFF'S FIRM will not be liable to defendant for any attorney fees and out of pocket expenses to defend the claim brought by the U.S. government or its designee including CMS.

32 Personal linjury Claims & The Medicare Secondary Payer Act Wednesday, d September 28, 2011 J.R. Whaley jrwhaley@nbalawfirm.com

33 Section 111 Cases Section 111 Requires extensive information including beneficiary SSN or HICN, for Defense to report claim Seger v. Tank Connection, LLC, Docket No. 8:08CV75, 2010 U.S. Dist. LEXIS (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 SSN and other data needed for Section 111 Reporting Sylvius von Saucken J.R. Whaley

34 U.S. v. Stricker United States of America v. Stricker, et al., No (N.D. Ala. September 30, 2010) Government sued plaintiffs lawyers, defendants and insurers. Court grants Motions to Dismiss on basis of 42 U.S.C 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 py recently decided against government Sylvius von Saucken J.R. Whaley

35 New Concerns for Defendants: US U.S. v. Stricker Why allthe fuss? (Medicare s SOL) Case Overview ( /1/09 9/30/10) Effect: United States Government seeks recovery from the insurers and the other settling parties for funds paid as settlement proceeds in a mass tort liability settlement Sylvius von Saucken svs@garretsongroup.com J.R. Whaley jrwhaley@nbalawfirm.com

36 New Concerns for Settling Parties: Effects of US U.S. v. Stricker Raises 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? Sylvius von Saucken svs@garretsongroup.com J.R. Whaley jrwhaley@nbalawfirm.com

37 MSA Case Law MSA Appropriate Schexnayder (2011 LEXIS 83687) Court found LMSA for $239, was reasonable. Why? Parties agreed to set funds aside for MSA; created allocation; submitted to CMS for review/approval as condition of settlement. No response from CMS Why? Joint motion for declaratory judgment to approve settlement. Court ratified what parties had already determined. Therefore, MSA was created by the parties themselves, not the court. Sylvius von Saucken J.R. Whaley

38 MSA Case Law CMS Review/Approval Smith (2011 LEXIS 90428) Court found WCMSA for $14,647 was reasonable. ab e. Why? Parties agreed to set funds aside for MSA; created allocation; submitted to CMS for review/approval as condition of settlement. CMS declinesopportunity to review Why? Joint motion for declaratory judgment to approve settlement. Court ratified what parties had already determined. Therefore, CMS future interests protected without requiring CMS approval. Sylvius von Saucken J.R. Whaley

39 MSA Case Law MSA Not Appropriate Finke (2009 WL ) Liability 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. Sylvius von Saucken svs@garretsongroup.com J.R. Whaley jrwhaley@nbalawfirm.com

40 H.R The SMART Act 40 Goal = Improve the current MSP system Issues Parties hesitant to resolve claims without knowing conditional payment reimbursement amount The current system involves significant delays Following the MSP Enhancement Act (which died in cmmte), the SMART Act would: Permit pre-settlement Cond Payment reports from Mcare; Establish a timeline for receipt of those reports; Change the admin. remedies (appeals to fed d. ct); Provide reporting safe harbors & reimb. thresholds; Change the SSN requirements for MMSEA; and Set a 3 year SOL.

41 MSP and Congress One step closer to reform Hearing on the Hill June 22, 2011 House Sub-Committee hears from stakeholders on all side CMS (CFO, D. Taylor) Self-insureds & insurers (Publixx, Cin. Insur. Co.) Plaintiff s counsel (Pennsylvania atty) Questions addressed Is the MSP system working for the taxpayers? Does Congress need to provide additional MSP tools? What is the current scope & capacity of the MSPRC? Are there amounts CMS will not chase? Should there be a minimum threshold? 41

42 The Takeaways 1. Improve Case / Claims Intake Process 2. Internal What Education can I do Attorneys now to implement and Staff a 3. Educate comprehensive Your Clients strategy for healthcare compliance in my firm 4. Update Fee or company? Agreement 5. Seek Third Party Assistance 42

43 Improve Case / Claims Intake Process In every case, the parties must Determine the parties affirmative obligations (verify, notify, 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 remedies, such as damage allocation, waivers, and compromises, to ensure the appropriate net recovery for the injured individual; and Address other healthcare-related settlement issues, such as the propriety of Medicare Set Asides (MSAs). 43