Posted by Sylvius von Saucken
Question:
What has anyone's experience been deducting from the set aside fund a court approved attorney's fee at the time of approval on a one-time basis?
Answer:
According to the CMS memos (specifically 5/7/2004), admin fees and/or attorney costs specifically associated with establishing the MSA cannot be charged to the MSA. Practically speaking, the only proper use of MSA proceeds is to pay for future injury-related care otherwise covered by Medicare. There are two notable exceptions – any bank charges or postage can be paid out of the MSA. We have even asked CMS (with no answer yet) whether tax preparation electronic filing charges are properly paid out of an MSA. We asked the question because the standard is similar to tax law “everything is NOT payable from the MSA unless specific rules exist to the contrary."
My best,
Sylvius
Thursday, July 30, 2009
Friday, July 24, 2009
Funding Medicare Set-Asides with a Structured Settlement
Posted by John Cattie
Question:
I have a case where they are considering using a structured settlement for a claimant who is on SSDI and not on Medicare yet. What if she spends the seed money in the first year? Will Medicare pay her medical before she is eligible for Medicare? I would think not. Would this case have to be approved by CMS even if it did not fall within the threshold for them to pay? How would a structured settlement protect the claimant if they would not pay? Can the seed money be more than 2 years of medical expenses to protect the claimant in this case? Has anyone had a case that was similar to this?
Answer:
When an MSA is established using an annuity, it is to be funded every period with a predetermined amount of money. CMS tells us in its memos about MSAs and Workers Comp settlements that, for any given period where the MSA proceeds for that period have been exhausted, it is proper to bill Medicare for injury-related care received that would otherwise be covered by Medicare for the duration of the given period.
At the end of the given period, the annuity funds the MSA again, and then the claimant would use MSA proceeds again. However, if the MSA contains a balance at the end of a given period, those funds roll over into the next period and are counted as a portion to be exhausted prior to being able to bill Medicare again.
You are correct in thinking that Medicare will not pay for injury-related care until the claimant becomes Medicare-eligible. However, the memos also tell us that the MSA may be used to pay for injury-related care otherwise covered by Medicare prior to the claimant becoming entitled to Medicare. Approval of a WCMSA proposal is not required. In fact, in certain situations, when the gross settlement fails to achieve the workload review thresholds, CMS will not review it.
My interpretation is that the seed money must be a minimum of 2 years plus costs of first contemplated surgery. I see nothing in the memos which would prohibit the seed money being more than this amount.I hope you find this helpful.
Please contact me if you would like to discuss MSAs further.
My best,
John Cattie
Question:
I have a case where they are considering using a structured settlement for a claimant who is on SSDI and not on Medicare yet. What if she spends the seed money in the first year? Will Medicare pay her medical before she is eligible for Medicare? I would think not. Would this case have to be approved by CMS even if it did not fall within the threshold for them to pay? How would a structured settlement protect the claimant if they would not pay? Can the seed money be more than 2 years of medical expenses to protect the claimant in this case? Has anyone had a case that was similar to this?
Answer:
When an MSA is established using an annuity, it is to be funded every period with a predetermined amount of money. CMS tells us in its memos about MSAs and Workers Comp settlements that, for any given period where the MSA proceeds for that period have been exhausted, it is proper to bill Medicare for injury-related care received that would otherwise be covered by Medicare for the duration of the given period.
At the end of the given period, the annuity funds the MSA again, and then the claimant would use MSA proceeds again. However, if the MSA contains a balance at the end of a given period, those funds roll over into the next period and are counted as a portion to be exhausted prior to being able to bill Medicare again.
You are correct in thinking that Medicare will not pay for injury-related care until the claimant becomes Medicare-eligible. However, the memos also tell us that the MSA may be used to pay for injury-related care otherwise covered by Medicare prior to the claimant becoming entitled to Medicare. Approval of a WCMSA proposal is not required. In fact, in certain situations, when the gross settlement fails to achieve the workload review thresholds, CMS will not review it.
My interpretation is that the seed money must be a minimum of 2 years plus costs of first contemplated surgery. I see nothing in the memos which would prohibit the seed money being more than this amount.I hope you find this helpful.
Please contact me if you would like to discuss MSAs further.
My best,
John Cattie
Friday, July 17, 2009
Future Medical Costs in Medical Malpractice Case
Posted by John Cattie
Question:
I am settling a contested medical malpractice case for an elderly client who had a below-knee amputation following negligent podiatry care. Future medical care was not considered or addressed in the settlement, but it is conceivable client could need prosthetic related services in the future (client is 82 y/o). I don't want to put client in the situation that Medicare refuses payment if he should need such services in the future. It seems like a MSA would not be needed, but how do I adequately consider Medicare’s interest?
Pennsylvania Attorney
Answer:
You are right to think that you need to adequately consider Medicare's future interests, we know that from 42 U.S.C. 1395y(b)(1). However, the legal community lacks guidance as to how to properly consider Medicare's future interest in a third party liability case. Unlike a workers' comp situation, where CMS has published twelve (12) Memoranda on the topic of MSAs, CMS has published zero (0) Memorandum on the topic of MSAs in third party liability cases. Therefore, a good faith effort at substantial compliance with the law as it currently stands today is the standard to be met. The question becomes, short of a definitive allocation in the settlement to future medical expenses, how can we adequately consider Medicare's interests?
A good place to begin would be to perform a damages versus recovery evaluation. Try to blackboard the damages in your case (economic and non-economic), then compare those to the amount recovered. If the amount does not contemplate future medical expenses, that will be readily apparent during this evaluation as your client would not even be fully compensated for their non-economic damages. If the settlement does not contemplate future medical expenses, then an MSA would not be appropriate.
Until we receive guidance from CMS about the use of MSAs in liability cases, the most important thing you can do is document your efforts at considering Medicare's interests. Whether that documentation comes in the form of an internal memo within your firm, notes from a telephone consultation on the case, language inserted within the settlement agreement itself, or an MSA evaluation from an independent, neutral 3rd party like GFRG, documenting your efforts to substantially comply with 42 U.S.C. 1395y(b)(1) will serve to show Medicare that you indeed did make a good faith effort at protecting its interests. In turn, you will be protecting your client's Medicare benefits.
My best,
John
Question:
I am settling a contested medical malpractice case for an elderly client who had a below-knee amputation following negligent podiatry care. Future medical care was not considered or addressed in the settlement, but it is conceivable client could need prosthetic related services in the future (client is 82 y/o). I don't want to put client in the situation that Medicare refuses payment if he should need such services in the future. It seems like a MSA would not be needed, but how do I adequately consider Medicare’s interest?
Pennsylvania Attorney
Answer:
You are right to think that you need to adequately consider Medicare's future interests, we know that from 42 U.S.C. 1395y(b)(1). However, the legal community lacks guidance as to how to properly consider Medicare's future interest in a third party liability case. Unlike a workers' comp situation, where CMS has published twelve (12) Memoranda on the topic of MSAs, CMS has published zero (0) Memorandum on the topic of MSAs in third party liability cases. Therefore, a good faith effort at substantial compliance with the law as it currently stands today is the standard to be met. The question becomes, short of a definitive allocation in the settlement to future medical expenses, how can we adequately consider Medicare's interests?
A good place to begin would be to perform a damages versus recovery evaluation. Try to blackboard the damages in your case (economic and non-economic), then compare those to the amount recovered. If the amount does not contemplate future medical expenses, that will be readily apparent during this evaluation as your client would not even be fully compensated for their non-economic damages. If the settlement does not contemplate future medical expenses, then an MSA would not be appropriate.
Until we receive guidance from CMS about the use of MSAs in liability cases, the most important thing you can do is document your efforts at considering Medicare's interests. Whether that documentation comes in the form of an internal memo within your firm, notes from a telephone consultation on the case, language inserted within the settlement agreement itself, or an MSA evaluation from an independent, neutral 3rd party like GFRG, documenting your efforts to substantially comply with 42 U.S.C. 1395y(b)(1) will serve to show Medicare that you indeed did make a good faith effort at protecting its interests. In turn, you will be protecting your client's Medicare benefits.
My best,
John
Wednesday, July 8, 2009
Medicare Lien in Wrongful Death Case
Posted by Mary Skinner
Question:
Several questions concerning a prospective case: Older couple, both on Medicare (although husband was still working) was in a head-on collision, other driver at fault. UIM available of $100K for each. Wife died of injuries 11 days post-accident, the medical bills were greater than $250,000. Some paid by No-Fault PIP, most by Medicare and Medicare Supp (BC/BS). Husband survived, but has permanent injuries, although is back to work. Don't know yet his medical expense, but assume it is at or close to $100K to date, most of which would have been paid by Medicare or BC/BS Medigap, and will probably have some future medical bills. We have state limits of $250,000 for non-economic loss in wrongful death and same limit for non-economic damages in personal injury case.
Several questions:
1) What is the likelihood of getting Medicare to waive or compromise its lien sufficiently so as to make pursuing this worthwhile both for husband (on his own claim and the wrongful death and survivorship claims of his wife) and me as his attorney? I have no burning desire to work solely for Medicare, and not get paid for it.
2) I am assuming it will be relatively easy to get policy limits offers on both parties from the UIM carrier. If we file a "friendly" lawsuit and have the court approve a settlement that itemizes damages (our state does have itemized verdicts in PI cases) and the itemization is in good faith and plausible (i.e. proportionally reducing medical, lost earnings, non-economic, and funeral expense), will that be recognized by Medicare and does it limit their lien just to the past medical expense, leaving non-economic, lost wages, and funeral expense insulated from Medicare's claim?
3) Is the Medicare Supp (BC/BS) subject to the same lien rules (generally our state bans subrogation by medical insurers unless subject to ERISA)?
4) What can GFRG do for me and my prospective clients, how much is the cost, and at what stage do you need to get involved? I don't want to reach a settlement or tentative settlement with the liability and UIM carriers, only to find out that I should have done something else first.
5) What are the implications for a contingent fee agreement? I understand I cannot get a fee on the amount that is paid back to Medicare. Since getting the policy limits on both cases should not be too difficult, and probably won't even require filing suit, a typical 1/3 or 35% contingent fee as to the full $200,000 would likely be excessive. However, since the amount reimbursed to Medicare could be a substantial portion of the entire recovery, the amount subject to the contingent fee percentage will probably be much less than $200,000, and if we ended up netting, say $30,000, I wouldn't be real thrilled with a 20% fee on that.
Thanks for your help,
Kansas Attorney
Answer:
1) Given the facts of the case there is a very good likelihood that Medicare would compromise or waive their interest. There are also other administrative remedies that could further limit Medicare's recovery.
2) Medicare will honor a court allocation if it is based on the merits of the case. With that said, Medicare can only recover on the portion that is allocated to past medicals.
3) No, the Medicare Supplemental Insurance does not have the same recovery rights as Medicare; you are under no statutory obligation to put them on notice. However, if the Medicare Supp puts you on notice then you would have to negotiate with them. With that said, since Medicare has a priority right of recovery, they must be reimbursed first. So if the court allocates xx to past medicals to Medicare then the Supp wouldn’t get anything even if they did put you on notice.
4) Our fee for addressing Medicare’s interest (date of injury to date of settlement) is $1800.00 per case. Considering the fact that this is one settlement for 2 claimants we would compromise our fee to $1500.00 per claimant. Our fee is a client expense and therefore is also used in calculation of the procurement offset.
5) You can get fees on the full amount of the $200,000.00 settlement, not on the net. Medicare always assumes that the fee and expenses are paid prior to reimbursement.
Please feel free to contact me should you have any other questions. I’d be happy to assist.
Mary Skinner
Question:
Several questions concerning a prospective case: Older couple, both on Medicare (although husband was still working) was in a head-on collision, other driver at fault. UIM available of $100K for each. Wife died of injuries 11 days post-accident, the medical bills were greater than $250,000. Some paid by No-Fault PIP, most by Medicare and Medicare Supp (BC/BS). Husband survived, but has permanent injuries, although is back to work. Don't know yet his medical expense, but assume it is at or close to $100K to date, most of which would have been paid by Medicare or BC/BS Medigap, and will probably have some future medical bills. We have state limits of $250,000 for non-economic loss in wrongful death and same limit for non-economic damages in personal injury case.
Several questions:
1) What is the likelihood of getting Medicare to waive or compromise its lien sufficiently so as to make pursuing this worthwhile both for husband (on his own claim and the wrongful death and survivorship claims of his wife) and me as his attorney? I have no burning desire to work solely for Medicare, and not get paid for it.
2) I am assuming it will be relatively easy to get policy limits offers on both parties from the UIM carrier. If we file a "friendly" lawsuit and have the court approve a settlement that itemizes damages (our state does have itemized verdicts in PI cases) and the itemization is in good faith and plausible (i.e. proportionally reducing medical, lost earnings, non-economic, and funeral expense), will that be recognized by Medicare and does it limit their lien just to the past medical expense, leaving non-economic, lost wages, and funeral expense insulated from Medicare's claim?
3) Is the Medicare Supp (BC/BS) subject to the same lien rules (generally our state bans subrogation by medical insurers unless subject to ERISA)?
4) What can GFRG do for me and my prospective clients, how much is the cost, and at what stage do you need to get involved? I don't want to reach a settlement or tentative settlement with the liability and UIM carriers, only to find out that I should have done something else first.
5) What are the implications for a contingent fee agreement? I understand I cannot get a fee on the amount that is paid back to Medicare. Since getting the policy limits on both cases should not be too difficult, and probably won't even require filing suit, a typical 1/3 or 35% contingent fee as to the full $200,000 would likely be excessive. However, since the amount reimbursed to Medicare could be a substantial portion of the entire recovery, the amount subject to the contingent fee percentage will probably be much less than $200,000, and if we ended up netting, say $30,000, I wouldn't be real thrilled with a 20% fee on that.
Thanks for your help,
Kansas Attorney
Answer:
1) Given the facts of the case there is a very good likelihood that Medicare would compromise or waive their interest. There are also other administrative remedies that could further limit Medicare's recovery.
2) Medicare will honor a court allocation if it is based on the merits of the case. With that said, Medicare can only recover on the portion that is allocated to past medicals.
3) No, the Medicare Supplemental Insurance does not have the same recovery rights as Medicare; you are under no statutory obligation to put them on notice. However, if the Medicare Supp puts you on notice then you would have to negotiate with them. With that said, since Medicare has a priority right of recovery, they must be reimbursed first. So if the court allocates xx to past medicals to Medicare then the Supp wouldn’t get anything even if they did put you on notice.
4) Our fee for addressing Medicare’s interest (date of injury to date of settlement) is $1800.00 per case. Considering the fact that this is one settlement for 2 claimants we would compromise our fee to $1500.00 per claimant. Our fee is a client expense and therefore is also used in calculation of the procurement offset.
5) You can get fees on the full amount of the $200,000.00 settlement, not on the net. Medicare always assumes that the fee and expenses are paid prior to reimbursement.
Please feel free to contact me should you have any other questions. I’d be happy to assist.
Mary Skinner
Tuesday, July 7, 2009
Medicare Timeframe
Posted by Mary Skinner
Question:
Is there a timeframe between plaintiff's request to Medicare for their lien/subrogation amount and when that information is required to be provided back to the plaintiff? And, are there penalties for failure to provide that information in the State of Oregon?
Thanks for your time.
Answer:
CMS guidelines are that the MSPRC has 45 days from date of receipt to respond to any written request. With that said it is always good to make a follow up phone call to ensure that they have received your written request and that they have your request and signed authorization in their system.
Mary Skinner
Question:
Is there a timeframe between plaintiff's request to Medicare for their lien/subrogation amount and when that information is required to be provided back to the plaintiff? And, are there penalties for failure to provide that information in the State of Oregon?
Thanks for your time.
Answer:
CMS guidelines are that the MSPRC has 45 days from date of receipt to respond to any written request. With that said it is always good to make a follow up phone call to ensure that they have received your written request and that they have your request and signed authorization in their system.
Mary Skinner
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