MMSEA Extension Act of 2007

Posted by Matt Garretson

Question:
Has anyone decided that letters need to be sent to present clients in reference to the MMSEA Act of 2007? Has anyone made a determination that this act and its implications be incorporated in some form into new fee contracts? If any of you have such language or a form letter it would be a great resource because this is a matter that needs to be addressed with clients prior to resolving cases after the first of July. Any input or thoughts would be appreciated. It does not appear something that the defense is going to ignore.

Thank you.

Georgia Attorney

Answer:
Here is a draft document we developed for the mediation setting and an upcoming CLE teleseminar. You might be able to use that document as well as educate your clients on these three key points:

1) Because of this new legislation, you will be starting the process early to verify and resolve Medicare’s reimbursement interest in the client’s claim.

2) At the time of any settlement you and the client should be prepared (by using this form attached) to stipulate that the key data points be reported by the defendant to Medicare. This is especially critical with respect to the defendant’s reporting of injury description. (You want them to report the injury EXACTLY how you described the injury when you initiated the reimbursement claim well before settlement. If the defendant reports the injury description beyond the scope of what you reported, this could lead to potential increases in the reimbursement obligation or worse yet, a demand for additional lien payments after you have resolved the case and disbursed to the client.)

3) While nothing in MMSEA says that Medicare Set Asides are now required in liability cases (there has been no guidance or directive from Medicare that MSAs are required in liability cases), defendants may interpret the new law differently. In this regard, should the case settle you/client might be required to… (argue the point, compromise; seek opinions from third parties, etc).

With respect to fee agreement language, you might check out the article at the following link: “Sharpening Your Most Important Tool: Does Your Retainer Agreement Still Cut It?” for some pointers. Sample fee language could include: “We understand that current law and regulations regarding Medicare, Medicaid or private health insurance plans (Healthcare Providers) may require all parties involved in this matter (client, law firm defendant, and any insurance companies) to compromise, settle, or execute a release of Health care Providers’ separate claim for reimbursement/lien for past and future payments prior to distributing any verdict or settlement proceeds. We agree that the law firm may take all steps in this matter deemed advisable for the handling of our claim, including hiring separate experts/case workers who assist with resolving any Health care Providers’ reimbursement claims or liens for past and/or future injury-related medical care. The expense of any such service shall be treated as a case expense and deducted from our net recovery and shall not be paid out of the law firm’s contingent fee in this matter.”

I hope this is helpful.

Matt Garretson