Wednesday, October 28, 2009

Enforceable Liens that Involve ERISA

Posted by Michael Russell

Question:
Can a plan sue the personal injury attorney as a defendant for simply holding the settlement proceeds of a plan participant in their trust account to which the plan may have a lien? Also, what does a plan have to do to have an enforceable lien? If the plan pays benefits but does not have the participant sign a repayment agreement per the plan is the lien still enforceable and is that still ERISA or is it a contract claim?

Answer:
With regard to your first question, there is nothing which prevents the plan from suing an attorney in such a situation. However, as the funds have not been disbursed to the client there is limited danger in such a scenario.

Regarding enforceability, it really depends upon the language of the plan (contractual right) or the state where your client resides (equitable right). If the language of the plan gives the plan a right to subrogation and/or enforcement then there is presumably an enforceable lien. Likewise, if there is no plan language but state case law recognizes that the insurer has an equitable right to subrogation then presumably there is an enforceable lien. For example in the state Illinois, the Supreme Court in a 1990 decision, decided that a health plan can only have a contractual right. In either case there are no formal steps for perfection which you may see with other liens.

Repayment or reimbursement agreements are common but by no means are they necessary to trigger enforceability. Again the plan language will dictate. I also have to point out that there is really no difference between an ERISA claim and a contract claim in such context. ERISA does not specifically provide for subrogation (no specific provision) but it does allow for appropriate equitable relief. See 29 USC 1132(a)(3). This relief is obtained through enforcing the terms of the plan which is itself a contract. The focus should be first on the plan language and second on the reimbursement agreement, if any.

I hope this email provided useful insightful in response to your inquiry. I am happy to discuss a particular case in more detail. Often ERISA cases are very fact specific and without more info it is hard to give a complete answer (and sometimes even with all the info a complete answer cannot be given).

Michael Russell

Tuesday, October 27, 2009

Medicare as Primary Payor?

Posted by Mary Skinner

Question:
Our firm has a case where the carrier for the defendant hospital is listed as the “primary payor,” although they’re disputing liability. The carrier contacted Medicare in pursuit notifying them of our client’s claim, and the information was entered into the computer system as the “primary payor.” (Medicare is secondary). We’ve notified Medicare that the defendant hospital will not pay, and they need to be removed, so our client can continue receiving benefits. We have even offered to provide a letter from the carrier confirming this, however; they believe that both the letter and the fact that we agreed to protect Medicare’s lien would not be sufficient. So now, we have a brain injured client who is in jeopardy of having his doctors refuse to see him due to the fact that their bills are being denied by the primary payor, and Medicare (as secondary payor) can take anywhere from 4-6 months before “considering” whether to pay the bills being denied. How fair is that? Despite my pleas for help, Medicare has NO answer as to how to resolve.

I’d love to hear how others are dealing with this situation.Thanks,
-Florida Attorney

Answer:
You should contact the provider of service to ensure that they have all the necessary information and documentation to bill Medicare correctly. When Medicare is the secondary payer to automobile medical/no-fault or liability insurance, providers may, but are not required to, bill Medicare for conditional payment. Conditional payment means Medicare will pay the claims as if they had primary responsibility. When Medicare makes conditional payments they will however, actively pursue recovery of the funds paid by Medicare from the responsible person's auto or liability insurance. When a provider has reason to believe or knows that they have provided services to a beneficiary/client for which payment under liability insurance may be available they must:
• Bill only the liability insurer during the 120-days after services have been provided unless the providers have evidence that the liability insurer will not pay within the time period.
• If they have evidence that the liability insurer will not pay within the 120-day timeframe*, they may, but are not required to, bill Medicare for conditional payment. If they bill Medicare within the 120-day time period, the provider must supply documentation to support that payment will not be made promptly.
• After the 120-day timeframe has ended, the providers may, but are not required to, bill Medicare for conditional payment if the liability insurance claim is not resolved. At this point, the 120-day payment documentation is no longer required; however, we still need the liability insurer's name and address. *Note: The 120-day timeframe is defined as the earlier of the following:
• The date a claim is filed with an insurer or a lien is filed against a potential liability settlement. • The date the service was furnished or, in the case of inpatient hospital services, the date of discharge.

Sometimes providers file liens in auto and liability cases and wait for a settlement before submitting a bill to Medicare-this is not considered a conditional payment, as providers are not requesting that Medicare pay. However, the 120-day timeframe is still to be followed. If providers choose to bill Medicare after the 120-day period they must withdraw claims against the liability insurer or liens placed on the beneficiary's/clients settlement. The Medicare reimbursement must be accepted as payment in full and providers may charge the beneficiary/client only for applicable deductible, coinsurance, and non-covered services. When the claim that a provider is filing includes a trauma diagnosis and an auto or liability insurance is involved, they must include the name, policy number and address of the liability insurer if requesting a secondary or a conditional payment. If liability insurance payment is made, Medicare will not pay secondary unless benefits are exhausted.

Mary Skinner

Monday, October 26, 2009

Medicare on Settlement Check

Posted by Matthew Garretson

Question:
Evidently, defense firms are now trying to say the new Medicare laws require them to put Medicare’s name on the settlement checks “to protect their clients from liability.” Is anyone else seeing this? How would you handle it?

-Arkansas Attorney

Answer:
While it is never a good thing to have Medicare’s name on the check, if it happens Medicare’s process is as follows: All parties must endorse the check. Once Medicare issues its Final Demand, the check is then sent to Medicare Secondary Payer Recovery Contractor (MSPRC) for deposit. MSPRC will issue a separate check, minus Medicare’s claim amount, to the attorney after a five-day waiting period; or send MSPRC a separate check for only Medicare’s claim amount, along with the multi-party check. Medicare will deposit the check made out to Medicare and endorse the multi-party check. The multi-party check will be immediately returned to the attorney.

We are seeing more and more of this as defendants reacts to the new MMSEA Statute that (beginning next year) requires them to report all settlements with Medicare beneficiaries to Medicare (see www.garretsonfirm.com and see MMSEA section). This puts defendants on Medicare’s radar (if the claimant doesn’t pay the Medicare reimbursement claim (a/k/a Medicare lien). So, we have some defendants now either a) putting Medicare’s name on the check; or, b) saying “we’ve got a settlement, but we will not make payment until we have proof that Medicare’s reimbursement claim has been satisfied. You might consider informing the defendants that CMS has clarified in several recent town hall meetings that CMS’ recovery practices have not changed on account of the new MMSEA statute. Furthermore, CMS has published several “user guides” and interpretative “alerts” and at no time have they stated that putting Medicare’s name on the check is a requirement. See http://www.cms.hhs.gov/MandatoryInsRep/Downloads/RevisedSection111022309.pdf. “The new Section 111 requirements do not change or eliminate any existing obligations under the MSP statutory provisions or regulations.”

I hope this information helps.

My best,
Matt Garretson

Tuesday, October 20, 2009

Estimating the Amount of a Medicare Lien

Posted by Mary Skinner

Question:
I am trying to estimate the amount of a Medicare lien. Does anyone know whether Medicare pays for home nursing care or home pharmacy infusion services?

Pennsylvania Attorney

Answer:
If a patient needs skilled nursing or rehabilitation care at home, either Medicare Part A (following a minimum three-day hospital stay) or Part B (no hospital-stay requirement) can cover it. The care may be provided in the patient's home or anywhere else he or she stays. If a patient meets the requirements to qualify for home care, Medicare can cover skilled nursing care and physical and speech therapy as needed while the patient recovers from an illness, condition, or injury. Medicare also covers needed medical supplies and equipment.
Medicare doesn't generally cover non-medical at-home care and assistance, including meals and housekeeping. However, if a patient is getting Medicare coverage for skilled nursing or therapy at home, Medicare generally pays for limited visits by an aide from a home care agency to help him or her with personal care. If Medicare covers skilled care for the patient, it can also cover the services of an occupational therapist to help him or her relearn how to accomplish daily personal care and household tasks safely.

As for the home pharmacy infusion services Medicare Part B, there is some coverage for certain therapies administered using durable medical equipment (a mechanical or electronic external infusion pump). Unfortunately, only a select few therapies are covered and only under very specific conditions. These include some anti-infective, some chemotherapy drug, some inotropic therapies (e.g., dobutamine), some pain management and a few other therapies. For parenteral and enteral nutrition therapies, there can be coverage in Part B only if the need for the therapy is documented to be for at least 90 days and other coverage criteria are met. There may be coverage for intravenous immune globulin (IVIG) for primary immune deficiency patients but the supplies and equipment are not paid for. More specific information can be obtained by contacting the Medicare entities called Durable Medical Equipment Medicare Administrative Contractors (DME MACs). The coverage criteria for home infusion that all contractors follow are found from a DME MAC.

For home nursing visits needed for beneficiaries receiving infusion therapy, there can be Medicare Part A coverage under Medicare’s home health benefit only if the patients are serviced by a Medicare-certified home health agency, as well as considered to be homebound and in need of intermittent (not 24 hour) home nursing.

My best,
Mary Skinner

Friday, October 16, 2009

Workers Compensation Case, MSA Threshold Requirement

Posted by John Cattie

Question:
My question concerns the threshold requirement of Medicare Set Asides (MSAs).

CMS states, "Also, any previously settled portion of the workers compensation claim must be included in computing the total settlement amount."

When a C&R settlement is entered into, typically there are no "previously settled portions" (at least in California). So, would one be prudent or required to use the previously paid Temp Disability & Perm Disability Advances, in addition to previously paid medical treatment to ascertain the low threshold for submitting a MSA to CMS?

Thank You,
California Attorney

Answer:
When computing the total settlement amount for CMS submission purposes, we can look to the CMS Memo dated April 25, 2006 for guidance. That Memo tells us that “CMS will only review new WCMSA proposals for Medicare beneficiaries where the total settlement amount is greater than $25,000.” Furthermore, CMS stresses this is a CMS workload review threshold, not a substantive safe harbor amount. When computing the total settlement amount, CMS tells us “that the computation of the total settlement amount includes, but is not limited to, wages, attorney fees, all future medical expenses (including prescription drugs) and repayment of any Medicare conditional payments.”

You have accurately noted that CMS tells us that “any previously settled portion of the WC claim must be included in computing the total settlement amount.” So, if the claim being settled today also had components that were settled previously, it is appropriate to include those amounts when computing the total settlement amount for CMS submission purposes. Though previously paid Temp Disability & Perm Disability Advances would not necessarily be deemed to be a “previously settled portion of a WC claim”, it would be proper to include those amounts for the limited purpose of calculating the total settlement amount for CMS submission. Based on the language of the Memo, such payments would fall under the “but not limited to” provision.

It is important to note, as CMS stresses in its Memos, that the thresholds provided are workload review thresholds, not substantive safe harbor amounts. This means that if the total settlement amount fails to reach the threshold, it means that CMS would not review/approve a MSA proposal in that case. However, it DOES NOT mean that a MSA does not have to be done. MSAs are appropriate in those workers comp cases involving: 1) a current Medicare beneficiary or a person possessing a “reasonable expectation” of Medicare entitlement within 30 months of settlement; 2) a settlement that closes future meds, effectively shifting the burden of future injury-related care from the carrier to Medicare on a permanent basis going forward; and 3) that individual does, in fact, require future injury-related care otherwise covered by Medicare. Finally, please note that submission of MSA proposals to CMS for review and approval is voluntary, not mandatory.

My best,
John Cattie

Thursday, October 15, 2009

Post-settlement Payment to Medicare

Posted by Mary Skinner

Question:
Over three years ago we settled a Fen Phen claim for a client that was not eligible for Medicare yet. Even though they were not eligible, out of caution we submitted to CMS/Medicare a listing of all of our Fen Phen clients (including this client) to confirm that liens did not exist. Medicare did not respond in regard to this client's status.

The settlement included a future payment if the client had heart valve surgery before a specified date. The total value of the settlement, including the settlement guarantee, was less than $200,000.

The client has since then had heart valve surgery. We learned post-surgery that he started using Medicare in the last year or two and that Medicare paid for the surgery.
Given these facts, are we still obligated to hold this post-settlement payment from a client that was not Medicare eligible at the time of settlement and contact Medicare?

-Texas Attorney

Answer:
Although your client was not Medicare entitled at the time of settlement, he was entitled when he received the settlement for surgical guarantee. Having said that, you will need to open a record with Medicare, using the surgery date as the date of incident and reimburse Medicare for any injury related claims they may have paid.

Regards,
Mary Skinner

Monday, October 12, 2009

Notifying MSPRC For Redetermination

Posted by Mary Skinner

Question:
We have a client who is Medicare eligible that had a total knee replacement related to a Motor Vehicle Accident paid for by Medicare. Initially, we received correct payment summary forms which included the correct Medicare payments for treatment related to the MVA, however, when we settled the case we received a letter stating Medicare did not pay any claims related to the MVA. I tried to correct this with MSPRC over the phone with no luck. Do I need to send an appeal to Medicare to receive the money? What process do I go through to get this corrected? We know for a fact Medicare has paid and do not want this to come back to haunt us.

Minnesota Attorney

Answer:
Yes, you would need to appeal this in writing to the MSPRC by requesting a "Redetermination" of their final demand. Labeling your letter in this manner will reduce the possibility of your letter getting forwarded to the wrong department.

Attorneys and/or beneficiaries have an obligation not only to notify the MSPRC when they have included non injury related claims in their listing but also when they have omitted related claims.

My Best,
Mary Skinner

Medicare's Part with Social Security Claims

Posted by John Cattie

Question:
I represent a 55 year old woman who has been receiving Social Security total disability benefits for years. Her medical problems are prolific. She has never applied for nor received Medicare benefits. In January 20008, she fell and broke her wrist and ankle. This week, at mediation, the Defense offered $45k (a very good settlement under the circumstances) to settle all claims (including a substantial private subrogation claim) contingent upon receiving a release from Medicare. Both her doctor and the insurance company doctor indicated that she will need no future care for these injuries, and, as indicated above, Medicare has not paid a dime, nor is she currently receiving Medicare benefits. This is my "introduction" into the potential claims that Medicare may make. Given the relatively small nature of the settlement, it is hard for me to believe that Medicare would be very interested in this; however, I am not certain as to how to proceed. Can you provide some guidance and/or cite chapter and verse as to where I should begin looking?

Thank you in advance.
Minnesota Attorney

Answer:
This is a fairly common scenario which we are seeing with greater frequency. Generally speaking, Medicare has 2 interests that must be satisfied at the time of settlement: 1) past interests, in the form of any conditional payments Medicare has made for injury-related care from the date of injury to the date of settlement; and 2) future interests, in the form of an evaluation as to whether a MSA is appropriate or not. The MSA protects Medicare's future interests by using settlement proceeds to pay for future injury-related care otherwise covered by Medicare. Until recently, these Medicare compliance obligations were really only the concern of the plaintiff. However, in light of the new Medicare reporting statute (the "MMSEA"), certain defendants/insurers will have reporting obligations to Medicare beginning as soon as 1/1/2010. Because of this new reporting obligation, insurance companies are taking a much greater interest in ensuring absolute Medicare compliance for the settling parties. This is why they are asking for a release from Medicare. Unfortunately, Medicare will not issue them a "release" in this case. But there are other ways to satisfy their desire for absolute Medicare compliance.

Achieving absolute Medicare compliance in this case will likely come in the form of a two prong attack: 1) ensuring that Medicare has not paid anything for injury-related care to date; and 2) ensuring that a MSA is not appropriate in this case. The easiest way to satisfy prong 1 is to have the insurance company, who should already be registered as a Responsible Reporting Entity with CMS under the MMSEA, query CMS to determine the Medicare entitlement status of your client. To do this, you would provide them with limited data about your client as follows: 1) Social Security Number; 2) first initial of first name; 3) first 6 characters of last name; 4) date of birth; and 5) gender. Using this information, the insurance company can query CMS on its own. The result of that query is that they will see that your client is not a Medicare beneficiary, meaning Medicare would have not paid anything for injury-related care in this matter. That would satisfy prong one.

To satisfy prong two, we would require a little more information. We know based on current law (namely 42 U.S.C. 1395y(b)) and federal regulations (42 C.F.R. 411.46, 47)) that MSAs are an appropriate method for protecting Medicare's future interests in work comp. To date, 12 CMS Memos tell the legal community how to use MSAs in work comp cases. However, CMS has not issued similar Memos specific to the use of MSAs in liability cases. Furthermore, there is no current statute mandating the use of MSAs in liability cases. As such, we believe the use of MSAs in liability cases should be limited to those rare circumstances where the settlement release contains a definitive allocation to future meds. However, understanding that this is an unsettled area right now, we believe it is of the utmost importance to document your file and memorialize the fact that you are considering Medicare's future interests at the time of settlement. This can take shape in several ways, from inserting specific language in the settlement agreement to having a MSA evaluation performed by someone who focuses their practice on such issues. Either way (WC or liability), the MSA issue should be addressed and properly handled. This would satisfy prong 2, ensuring absolute Medicare compliance for your client as well as the other parties involved in the settlement.

Hope this helps.

My best,
John

Monday, October 5, 2009

Medicare Billing Question

Posted by Mark Maughan

Question:
What steps do you advise clients to take when a hospital refuses to bill Medicare claiming that they must first bill and receive a denial from the liability carrier? We are involved in a case with a trucking company that is disputing liability, and I know that their insurer will not send a written denial letter that the hospital wants before billing Medicare. Can we submit the bill to Medicare directly? Is there a procedure for that? Obviously it would be a conditional payment by Medicare if they pay the bill, but getting there is getting harder and harder.

Thanks for any advice,
Ohio Attorney

Answer:
When a service provider learns that a beneficiary received services that may be payable by another payer primary to Medicare, the provider is required to pursue payment from that primary payer for a period of 120 days following the date of treatment. At the end of the 120 day period, if the insurer has not made payment, the provider may choose to bill Medicare conditionally or to continue to wait for payment from a future insurance settlement. If the provider chooses to bill Medicare, then it becomes the Medicare Secondary Payer Recovery Contractor’s responsibility to recover Medicare’s payment if a settlement occurs at some point in the future. The provider is not required to send the bill to Medicare if they choose to pursue payment from a possible future insurance settlement.

Has it been 120 days since the last date of service? If it hasn’t, you will have to wait for 120 days to pass, and then the hospital can bill Medicare. If the 120 days has passed, and the provider still won’t bill Medicare they may be unaware of the procedure. It may help to speak with them and educate them on the process. You would be surprised of the number of facilities and providers that don’t realize they can bill Medicare without a denial from the primary payer.

To answer your question regarding direct Medicare billing, yes, you can send in a claim requesting Medicare make payment to your client. If you’d like information regarding this process, let me know and I will have our Manager of Medicare Services, Mary Skinner reach out.

I hope the above is helpful.

My best,
Mark H. Maughan

Bankruptcy and Private Liens

Posted by Michael Russell

Question:
I would like your input on this scenario. A client files bankruptcy on April 15, 2009. Then on April 22, 2009 she is nearly killed in a head-on collision that was not her fault. We find that a $100k limit is the only option available. The ERISA carrier has a $225k lien and the client has applied for (and will get) Social Security. Undoubtedly she will have future bills because of her injuries. Is there any good scenario in this? The bankruptcy lawyer will not respond to my calls.

All I want to do is return as much as possible for the client in the best, legal and ethical way.

Thanks for your input.
Ohio Attorney

Answer:
There are two major components to this question; bankruptcy and ERISA / private lien resolution.

1. Bankruptcy. It depends on what type of bankruptcy they filed. If they filed a Ch.7, the proceeds should not be an asset of the bankruptcy estate, as Ch.7’s are looked at as a “snapshot in time” and since the accident was post-petition, there was no asset to report. However, if she filed a Ch.13, the schedules will need to be amended to show the lawsuit (even if the $$ is undetermined). As you know, many states have exemptions for Personal Injury lawsuits, but they must be listed in order to take advantage of the exemption. So, if she did file a Ch.13, then you would want to consider amending the schedules as appropriate.

2. Lien. Depending on whether the ERISA carrier’s benefits plan is self-funded or insured there may be various defenses depending on whether state or federal law applies and in what jurisdiction this case would fall into. Just based off the facts below it would seem that the made whole defense would be an alternative worth exploring. Because the amounts paid by the carrier far exceed the potential recovery (based off limit of 100k) there will clearly be an argument that the client was not made whole by her recovery. However depending on the jurisdiction and the language of the benefits plan, the made whole rule may or may not apply. To give a more detailed answer on what defenses may apply we would need further info including the funding status of the plan (Form 550 from year of injury), the plan language (summary plan description), and the clients state of residence.

Michael Russell