Posted by Sylvius Von Saucken
Question:
I was at a conference last week where the Medicare Secondary Payer Act was discussed. The belief was that you could get double damages for the failure of an insurer to pay the proper Medicare reimbursement. Do you know anything about this? And if yes, what does it mean to plaintiffs attorneys?
-Pennsylvania Attorney
Answer:
The concept of a private cause of action where a Medicare beneficiary can use an applicable plan to recover damages on behalf of both Medicare and the Medicare beneficiary is valid.
Hidden in the headaches that typically follow resolving Medicare’s conditional payment reimbursement rights is an enforcement provision that gives Medicare beneficiaries a private cause of action allowing the beneficiary to sue for double the amount of what Medicare paid which has not be repaid for the accidental injuries or exposures.
This private cause of action is often over-looked by insurance carriers/TPAs, claims handlers and defense lawyers. If it is not quickly and properly addressed by the knowledgeable risk/claims manager, Plaintiff’s attorneys might use this separate cause of action to increase the value of their cases and bring about higher settlement values. According to one recent commentator who writes for insurance companies, this little used part of the Medicare Secondary Payer Act (42 U.S.C. §1395y(b)(3)(A)) might create significant issues for claims adjusters, as very few, if any, claims adjusters establishes reasonable reserves for failing to reimburse Medicare’s conditional payments.
The private cause of action is set forth in 42 U.S.C. § 1395y, and provides:
(A) Private cause of actionThere is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).
The purpose of this private cause of action statute was to help the federal government recover conditional payments from insurers or other primary payers, to encourage private parties to enforce Medicare’s rights, and to save money for the taxpayers. The premises underlying the private cause of action are:
(1) The beneficiary can be expected to be more aware than the government of whether other entities may be responsible to pay medical expenses,
(2) Without double damages, the beneficiary might not be motivated to sue an insurer/TPA because Medicare may have already paid the expenses and the beneficiary would have nothing to gain by pursuing the primary payer, and
(3) With the private right of action and double damages, the beneficiary can pay back the government for its outlay and still have money left over to pay for the litigation.
The 2003 amendments to the MMA were specifically enacted to overturn previous court decisions that limited the effectiveness of the MSP private cause of action. The 2003 Amendments also made it easier for injured Medicare recipients to bring these private actions on behalf of CMS-Medicare against an expanded class of entities and individuals with insurance, and clarified when such entities are required to pay the Medicare beneficiary’s medical expenses.
These amendments established:
(A) All businesses, trades or professions shall be deemed to have insurance regardless of whether or not it carries its own risk.
(B) Any judgment or payment conditioned upon the recipient’s compromise, waiver or release whether or not there is a determination or admission of liability will demonstrate a plan’s responsibility to reimburse Medicare.
(C) Reimbursement to Medicare was no longer tied to anticipation of “prompt” payment because the Secretary of Health and Human Services may make conditional payments if a primary plan has not made, or cannot reasonably be expected to make payments with respect to such services promptly.
Prior to the 2003 amendments, it was not clear whether Medicare had a right of reimbursement from certain self-insured defendants. After the amendments, it became crystal clear Medicare’s right of reimbursement applies to practically all tort or workers’ compensation settlements in which Medicare payments have been made on behalf of the tort plaintiff.
Relevant case law suggests the private cause of action exists when the insurer/TPA was aware of the conditional payment and ignored Medicare’s interest. Then, and only then, can the Plaintiff file to seek double recovery for the unreimbursed payment. Court decisions decided since the enactment of the 2003 amendments consistently permit the private cause of action to proceed against insurers and similar entities including employers, who are deemed responsible for the tort or workers’ compensation victim’s injuries.
Lawyers representing tort and workers’ compensation claimants should understand the MSP private cause of action and might decide to use it as a tool to advance their clients’ interests. For example, before a case goes to trial, you might consider the ramifications of adding a Medicare Secondary Payer private cause of action lawsuit to potentially increase the settlement demand or bring a reluctant Defendant to the settlement table.
All that being said, there are some caveats to this technique.
The private cause of action exists when Medicare’s conditional payment reimbursement obligation has not been satisfied.
As a result:
• While it is true that Medicare beneficiaries can bring a private cause of action against primary plans (defined in the MSP Act as a workmen's compensation law or plan of the United States or a State or under an automobile or liability insurance policy or plan (including a self-insured plan) or under no fault insurance), the cause isn’t “ripe” until the defendant’s obligation to have paid (or, said differently, Medicare’s overpayment) has been established by settlement or judgment. • If there is a settlement, then this cause of action is ripe – HOWEVER, most, if not all settlement agreements require plaintiffs to indemnify defendants for any liability related to the MSP Act.
So, if you asked us to consider when to bring a private cause of action against primary plans for their failure to provide coverage of items that Medicare ended up paying, then that cause of action typically isn’t “ripe” until the Medicare beneficiary (your client) settles the underlying PI case with the defendant and at that time the plaintiff indemnifies the defendant. So, in essence, even if the plaintiff could collect based on the private cause of action, their indemnifying for MSP obligations and attorney fees changes the paradigm, where it is the Plaintiffs who would lose out, rather than the defendants, whose primary plans paid for the settlement.
The bottom line: this private cause of action is real, but may not be practical to use in the typical settlement scenario. On the other hand, this cause of action has much more staying power where your client’s case goes to trial and you receive a verdict. At that point, there is no corresponding indemnification agreement. In that circumstance, double damages would still be on the table. Knowing this, the private cause of action may be best implemented as additional settlement leverage (increase pressure to settle by threatening a suit with a private cause of action), or to increase damages if the case actually proceeds to trial; noting that if the case goes to trial with a private cause of action, and the case subsequently settles, your verifying and resolving Medicare’s claims would work in conjunction with your dismissal of the private cause of action as part of your settlement agreement (as you would be ensuring Medicare’s reimbursement).
Please let us know if this clears the muddy waters a bit.
Sylvius von Saucken
Monday, November 30, 2009
Tuesday, November 24, 2009
New York Collateral Source and Anti-Subrogation Amendment: Part F
It relates to the Governor’s mandate-relief bill, S6068/S52205/A9052, which passed both the Senate and Assembly on Tuesday night. The law passed the Assembly by a vote of 135 – 0 and the Senate by a vote of 59 - 2, and now awaits Governor David Paterson’s expected signature. Part F of the bill amends both the CPLR and GOL as well as repeals certain provisions of CPLR relating to collateral source payments. This synopsis was prepared by Mike Russell, the attorney in our firm who spearheads our Private/ERISA lien resolution practice. Mike’s summary follows:
The rationale of a modified version of the collateral source rule, C.P.L.R. § 4545, has been discussed by New York courts for years. The general consensus is that the thrust of the collateral source rule was to prevent double recoveries by plaintiffs. Additionally, there has been agreement that the “question of whether the defendants' liability insurance carriers should be held ultimately responsible for all of the plaintiff's damages, even for damages specified in section 4545 which have been compensated from collateral sources, is a question best left to the Legislature, and not the courts” (Humbach v. Goldstein, 229 A.D.2d at 67-68). That question has been answered by the Legislature after the passage of a new bill which 1) amends subdivision (c) of section 4545 of the Civil Practice Law and Rules and 2) adds section 5-335 to the General Obligations Law.
· §4545(c) – In actions for personal injury, injury to property, or wrongful death, the law allowed for the admission (and subsequent reduction of awards) of evidence pertaining to collateral source benefit payments. The amendment adds clarity and exempts only life insurance and payments for which there is a statutory right for reimbursement from the definition of collateral source.
· §5-335 – This new section limits and essentially eliminates the non-statutory right of benefit providers to reimbursement and subrogation in the case of third party settlements and claims (personal injury and wrongful death). Benefit providers are defined as any insurer, health maintenance organization, health benefit plan, preferred provider organization, employee benefit plan or other entity which provides for payment or reimbursement of health care expenses, health care services, disability payments, lost wage payments or any other benefits under a policy of insurance or contract with an individual or group. Those parties entering into a third party settlement would not be subject to subrogation or reimbursement claims or liens of a benefit provider unless such provider had a statutory right to reimbursement. Furthermore, it would be presumed that settlements would incorporate the modified collateral source rules of §4545- i.e. settlement would not include damages which were compensated by benefit provider unless provider had statutory right.
IMPORTANT ISSUES
Collateral Source Provider’s Rights of Recovery Greatly Limited
For several years there have been efforts to pass the above amendments and to essentially eliminate a collateral source provider’s right to recovery unless such provider had a right set forth by statute. Today the right of recovery is limited to only those provider’s who have a “statutory right to reimbursement.” This statutory right is conferred upon worker’s compensation benefit providers and government benefit providers including Medicare and Medicaid. Such providers are granted liens according to the law. However, health insurance providers or those defined as “benefit providers” are not granted such a statutory right and hence their rights of recovery are effectively eliminated. In the state of New York there is currently no statute which addresses a provider’s rights to reimbursement/subrogation for benefits or payments made pursuant to an insurance policy or other agreement.
Furthermore, there are no statutory rights under ERISA. Any group benefit plan, while falling under the shadow of ERISA (29 USC § 1002(1)), will only have a contractual right to subrogation/reimbursement. This contractual right is rooted in the language of the particular policy and agreement between the Plan and its members. Within ERISA there are no provisions which provide for subrogation or reimbursement. Rather, there is a provision which provides for “appropriate equitable relief” in the enforcement of plan language (29 USC §1132(a)(3)). Hence under ERISA there is not a clause which confers the right of subrogation or reimbursement. A plan’s contractual language controls its rights and thus under ERISA “benefit providers” will have a contractual but NOT a statutory right.
Presumption Established: Collateral Source Principle Extended to Settlements
In Teichman v. Community Hosp. of Western Suffolk, 87 N.Y.2d 514, the Court of Appeals made it very clear that the reach of §4545 extended only to admissibility at trials and actual judgments. The Court took notice of the section’s silence regarding settlements and stated that while parties to a settlement could consider the receipt of collateral source payments, there was nothing in §4545 which compelled “the conclusion that medical expenses were necessarily excluded from [a] settlement” (Id. at 523). It was this decision that provided the insurer with an interest in the matter and ultimately allowed for their intervention.
With the addition of §5-335 there is silence no more. This section very clearly states that “when a plaintiff settles with one or more defendants in an action for personal injuries, medical, dental, or podiatric malpractice, or wrongful death, it shall be conclusively presumed that the settlement does not include any compensation for the cost of health care services, loss of earnings or other economic loss to the extent those losses or expenses have been or are obligated to be paid or reimbursed by a benefit provider except for those payments as to which there is a statutory right to reimbursement.” This presumption language is the driving force behind the exclusion of liens and rights to subrogation/reimbursement.
Interplay with ERISA: Will Preemption Apply?
It is uncontested that almost every single group benefit plan in this country is subject to ERISA regardless of its particular funding structure. The exceptions usually being government plans, church plans, and individual plans. Under ERISA, all state laws are preempted insofar as they relate to employee benefit plans (29 USC § 1144(a)). So the question becomes will this new law be preempted?
ERISA preemption does not apply to those laws which regulate insurance, banking, or securities (29 USC § 1144(b)(2)(A)). This is known as the Savings clause. The Supreme Court in FMC Corp v. Holiday, 498 US 52, 61 (1990) held that self-funded ERISA plans (employer directly pays benefits rather than purchasing insurance to do so) are exempt from state laws BUT that state laws which regulate insurance are “saved” from preemption with regard to insurance companies and that “an insurance company that insures a plan remains an insurer for purposes of those laws.” Thus if this new law “regulates insurance” then ERISA preemption will not apply.
According to the United States Supreme Court’s opinion in Kentucky Assoc. of Health Plans v. Miller, 123 S.Ct. 1471, 1478 (2003), for a state law to be considered a law that “regulates insurance” under the Savings clause it must satisfy the two following requirements: (1) state law must be specifically directed toward entities engaged in insurance and (2) the state law must substantially affect the risk pooling agreement between the insurer and the insured. First §5-335 is specifically directed toward entities engaged in insurance as it defines not only benefit providers (see insurance industry single out above) but it also specifically excludes their liens and rights of reimbursement/subrogation if not statutorily based. Second, by shifting responsibility for a portion of a plaintiff’s damage, there can be no doubt that this new law will substantially affect the risk pooling agreement. In conclusion, we believe that this new law will regulate insurance and thus will not be preempted by ERISA.
I hope this synopsis has been helpful. Should you have any questions regarding the above, or if you would like to discuss Private Health/ERISA, Medicare Medicaid, hospital and/or workers compensation lien resolution issues in general, please do not hesitate to contact me or Mike Russell, the author of this synopsis or visit http://www.garretsonfirm.com/.
The rationale of a modified version of the collateral source rule, C.P.L.R. § 4545, has been discussed by New York courts for years. The general consensus is that the thrust of the collateral source rule was to prevent double recoveries by plaintiffs. Additionally, there has been agreement that the “question of whether the defendants' liability insurance carriers should be held ultimately responsible for all of the plaintiff's damages, even for damages specified in section 4545 which have been compensated from collateral sources, is a question best left to the Legislature, and not the courts” (Humbach v. Goldstein, 229 A.D.2d at 67-68). That question has been answered by the Legislature after the passage of a new bill which 1) amends subdivision (c) of section 4545 of the Civil Practice Law and Rules and 2) adds section 5-335 to the General Obligations Law.
· §4545(c) – In actions for personal injury, injury to property, or wrongful death, the law allowed for the admission (and subsequent reduction of awards) of evidence pertaining to collateral source benefit payments. The amendment adds clarity and exempts only life insurance and payments for which there is a statutory right for reimbursement from the definition of collateral source.
· §5-335 – This new section limits and essentially eliminates the non-statutory right of benefit providers to reimbursement and subrogation in the case of third party settlements and claims (personal injury and wrongful death). Benefit providers are defined as any insurer, health maintenance organization, health benefit plan, preferred provider organization, employee benefit plan or other entity which provides for payment or reimbursement of health care expenses, health care services, disability payments, lost wage payments or any other benefits under a policy of insurance or contract with an individual or group. Those parties entering into a third party settlement would not be subject to subrogation or reimbursement claims or liens of a benefit provider unless such provider had a statutory right to reimbursement. Furthermore, it would be presumed that settlements would incorporate the modified collateral source rules of §4545- i.e. settlement would not include damages which were compensated by benefit provider unless provider had statutory right.
IMPORTANT ISSUES
Collateral Source Provider’s Rights of Recovery Greatly Limited
For several years there have been efforts to pass the above amendments and to essentially eliminate a collateral source provider’s right to recovery unless such provider had a right set forth by statute. Today the right of recovery is limited to only those provider’s who have a “statutory right to reimbursement.” This statutory right is conferred upon worker’s compensation benefit providers and government benefit providers including Medicare and Medicaid. Such providers are granted liens according to the law. However, health insurance providers or those defined as “benefit providers” are not granted such a statutory right and hence their rights of recovery are effectively eliminated. In the state of New York there is currently no statute which addresses a provider’s rights to reimbursement/subrogation for benefits or payments made pursuant to an insurance policy or other agreement.
Furthermore, there are no statutory rights under ERISA. Any group benefit plan, while falling under the shadow of ERISA (29 USC § 1002(1)), will only have a contractual right to subrogation/reimbursement. This contractual right is rooted in the language of the particular policy and agreement between the Plan and its members. Within ERISA there are no provisions which provide for subrogation or reimbursement. Rather, there is a provision which provides for “appropriate equitable relief” in the enforcement of plan language (29 USC §1132(a)(3)). Hence under ERISA there is not a clause which confers the right of subrogation or reimbursement. A plan’s contractual language controls its rights and thus under ERISA “benefit providers” will have a contractual but NOT a statutory right.
Presumption Established: Collateral Source Principle Extended to Settlements
In Teichman v. Community Hosp. of Western Suffolk, 87 N.Y.2d 514, the Court of Appeals made it very clear that the reach of §4545 extended only to admissibility at trials and actual judgments. The Court took notice of the section’s silence regarding settlements and stated that while parties to a settlement could consider the receipt of collateral source payments, there was nothing in §4545 which compelled “the conclusion that medical expenses were necessarily excluded from [a] settlement” (Id. at 523). It was this decision that provided the insurer with an interest in the matter and ultimately allowed for their intervention.
With the addition of §5-335 there is silence no more. This section very clearly states that “when a plaintiff settles with one or more defendants in an action for personal injuries, medical, dental, or podiatric malpractice, or wrongful death, it shall be conclusively presumed that the settlement does not include any compensation for the cost of health care services, loss of earnings or other economic loss to the extent those losses or expenses have been or are obligated to be paid or reimbursed by a benefit provider except for those payments as to which there is a statutory right to reimbursement.” This presumption language is the driving force behind the exclusion of liens and rights to subrogation/reimbursement.
Interplay with ERISA: Will Preemption Apply?
It is uncontested that almost every single group benefit plan in this country is subject to ERISA regardless of its particular funding structure. The exceptions usually being government plans, church plans, and individual plans. Under ERISA, all state laws are preempted insofar as they relate to employee benefit plans (29 USC § 1144(a)). So the question becomes will this new law be preempted?
ERISA preemption does not apply to those laws which regulate insurance, banking, or securities (29 USC § 1144(b)(2)(A)). This is known as the Savings clause. The Supreme Court in FMC Corp v. Holiday, 498 US 52, 61 (1990) held that self-funded ERISA plans (employer directly pays benefits rather than purchasing insurance to do so) are exempt from state laws BUT that state laws which regulate insurance are “saved” from preemption with regard to insurance companies and that “an insurance company that insures a plan remains an insurer for purposes of those laws.” Thus if this new law “regulates insurance” then ERISA preemption will not apply.
According to the United States Supreme Court’s opinion in Kentucky Assoc. of Health Plans v. Miller, 123 S.Ct. 1471, 1478 (2003), for a state law to be considered a law that “regulates insurance” under the Savings clause it must satisfy the two following requirements: (1) state law must be specifically directed toward entities engaged in insurance and (2) the state law must substantially affect the risk pooling agreement between the insurer and the insured. First §5-335 is specifically directed toward entities engaged in insurance as it defines not only benefit providers (see insurance industry single out above) but it also specifically excludes their liens and rights of reimbursement/subrogation if not statutorily based. Second, by shifting responsibility for a portion of a plaintiff’s damage, there can be no doubt that this new law will substantially affect the risk pooling agreement. In conclusion, we believe that this new law will regulate insurance and thus will not be preempted by ERISA.
I hope this synopsis has been helpful. Should you have any questions regarding the above, or if you would like to discuss Private Health/ERISA, Medicare Medicaid, hospital and/or workers compensation lien resolution issues in general, please do not hesitate to contact me or Mike Russell, the author of this synopsis or visit http://www.garretsonfirm.com/.
SSI versus SSD
Posted by Sylvius Von Saucken
Question:
How can I determine if client is receiving SSD as opposed to SSI?
Client injured in MVA. I have conditional payment info from MSPRC. Emergency room registration info lists “primary insurance” as “Medicare” and “secondary insurance” as “Medicaid,” (I don’t know if this information was given by client or already in computer from prior visits). Client is not reliable source as to what benefits he had been receiving. I want to make sure if and when case settles that only obligation is to reimburse MSPRC. I don’t want to make client ineligible for SSI (if he’s really getting those benefits) and I want to protect myself too from any issues if I distribute money to client.
Any help is appreciated. Would client’s Medicare card (or some other card) give the answer?
Ohio Attorney
Answer:
This is a fact pattern we are seeing with greater regularity. The “dual-entitled” beneficiary whose settlement conjures up both a Medicaid lien under Rev. Code §5101.58 and a potential Medicare claim under 42 U.S.C. §1395y(b)(2) brings up additional considerations to settle. Typically, because Medicare does not pay for all of a disabled person’s (if not over age 65) medical expenses, if that person’s income and countable resources are less than threshold levels, he/she would also apply for Medicaid (to pay co-pays not covered by Medicare; to pay for long-term care after the first 100 days of hospitalization, etc.)
First, if your client has Medicare (red, white and blue card), and is under age 65, he/she could only use Medicare if he/she received SSDI for at least 24 consecutive months and had an established work history prior to becoming disabled. Medicaid, on the other hand, would be based on medical and financial need (rather than work history).
Second, the type of Medicaid program in which your client is enrolled will be relevant to crafting an appropriate benefit preservation plan, if needed.
Third, because SSI is based on financial need and there is a maximum benefit to be paid out, often once you know how much “Social Security” your client receives, and IF your client has a prior work history, you can better identify whether the benefit is SSI or SSDI.
The good news – our sister company has a government benefit preservation program: www.tglflaw.com. The process involves not taking your client’s word for it, as our paralegals verify actual benefits with your client’s case workers, and then provide a report, depending on the scope of our engagement. Our firm’s fees are always based on flat fees, and we offer consulting and full benefit preservation planning, with the understanding that our fee will always be commensurate with a client’s net recovery (so our services are truly value-added and education-oriented).
The really good news – with a formalized process to “verify and resolve” conditional payment reimbursement obligations to address “recovery” issues, you can have a better idea how much is left to preserve and then provide your client with information designed to help the client make informed decisions intended to integrate settlement goals with benefit preservation (to handle the “eligibility” side of the two-sided benefit coin).
Our best,
Sylvius von Saucken
Question:
How can I determine if client is receiving SSD as opposed to SSI?
Client injured in MVA. I have conditional payment info from MSPRC. Emergency room registration info lists “primary insurance” as “Medicare” and “secondary insurance” as “Medicaid,” (I don’t know if this information was given by client or already in computer from prior visits). Client is not reliable source as to what benefits he had been receiving. I want to make sure if and when case settles that only obligation is to reimburse MSPRC. I don’t want to make client ineligible for SSI (if he’s really getting those benefits) and I want to protect myself too from any issues if I distribute money to client.
Any help is appreciated. Would client’s Medicare card (or some other card) give the answer?
Ohio Attorney
Answer:
This is a fact pattern we are seeing with greater regularity. The “dual-entitled” beneficiary whose settlement conjures up both a Medicaid lien under Rev. Code §5101.58 and a potential Medicare claim under 42 U.S.C. §1395y(b)(2) brings up additional considerations to settle. Typically, because Medicare does not pay for all of a disabled person’s (if not over age 65) medical expenses, if that person’s income and countable resources are less than threshold levels, he/she would also apply for Medicaid (to pay co-pays not covered by Medicare; to pay for long-term care after the first 100 days of hospitalization, etc.)
First, if your client has Medicare (red, white and blue card), and is under age 65, he/she could only use Medicare if he/she received SSDI for at least 24 consecutive months and had an established work history prior to becoming disabled. Medicaid, on the other hand, would be based on medical and financial need (rather than work history).
Second, the type of Medicaid program in which your client is enrolled will be relevant to crafting an appropriate benefit preservation plan, if needed.
Third, because SSI is based on financial need and there is a maximum benefit to be paid out, often once you know how much “Social Security” your client receives, and IF your client has a prior work history, you can better identify whether the benefit is SSI or SSDI.
The good news – our sister company has a government benefit preservation program: www.tglflaw.com. The process involves not taking your client’s word for it, as our paralegals verify actual benefits with your client’s case workers, and then provide a report, depending on the scope of our engagement. Our firm’s fees are always based on flat fees, and we offer consulting and full benefit preservation planning, with the understanding that our fee will always be commensurate with a client’s net recovery (so our services are truly value-added and education-oriented).
The really good news – with a formalized process to “verify and resolve” conditional payment reimbursement obligations to address “recovery” issues, you can have a better idea how much is left to preserve and then provide your client with information designed to help the client make informed decisions intended to integrate settlement goals with benefit preservation (to handle the “eligibility” side of the two-sided benefit coin).
Our best,
Sylvius von Saucken
Monday, November 23, 2009
Does Medicaid Have A Pre-1980 Rule?
Posted by Sylvius Von Saucken
Question:
I have 2 questions for you about Medicaid. I have tried researching and have come up empty handed. Question 1: Medicaid. Do we have a duty to notify Medicaid of a potential lien in an asbestos case in Michigan? Is there a pre 1980 rule like in Medicare? I could use authority for this? Question 2: IRS. If we believe a client has an IRS lien, do we have a duty to notify the IRS? This lien is more than 10 years old, and there does not appear to be a judgment, but we want to cover ourselves. Thanks so much for your time.
-Michigan Attorney
Answer:
With respect to Medicaid, there is no pre-1980 rule as “1980” is relevant to the year in which the Medicare Secondary Payer statute was passed. With respect to Medicaid, the rules concerning “notice” are all governed by the state Medicaid statute. Many of those state statutes have been changed in the recent years (after Ahlborn) to require affirmative notice to the state when settlement occurs.
To answer your question, I’ve compiled the following summary:
1. MCLA §400.106(4) (eff. 11/24/04) places an affirmative duty on a Medicaid beneficiary and/or his/her representative (counsel) to notify the MI Dept of Community Health and Casualty Unit (Medicaid tort recovery unit) anytime a settlement is pending for which injury-related medical expenses were paid for by Medicaid. (See below)
M.C.L.A. 400.106
Michigan Compiled Laws Annotated Currentness
Chapter 400. Social Services
The Social Welfare Act (Refs & Annos)
County Department of Social Services
400.106. Medically indigent individual defined; other definitions; actions wherein state department and/or Medicaid contracted health plan have right to recover expenses, notice, settlements, priority for recovery against proceedsSec. 106. (1) A medically indigent individual is defined as:
(3) An individual receiving medical assistance under this act or his or her legal counsel shall notify the state department when filing an action in which the state department may have a right to recover expenses paid under this act. If the individual is enrolled in a Medicaid contracted health plan, the individual or his or her legal counsel shall provide notice to the Medicaid contracted health plan in addition to providing notice to the state department.
(4) If a legal action in which the state department, a Medicaid contracted health plan, or both has a right to recover expenses paid under this act is filed and settled after November 29, 2004 without notice to the state department or the Medicaid contracted health plan, the state department or the Medicaid contracted health plan may file a legal action against the individual or his or her legal counsel, or both, to recover expenses paid under this act. The attorney general shall recover any cost or attorney fees associated with a recovery under this subsection.
(5) The state department has first priority against the proceeds of the net recovery from the settlement or judgment in an action settled in which notice has been provided under subsection (3). A Medicaid contracted health plan has priority immediately after the state department in an action settled in which notice has been provided under subsection (3). The state department and a Medicaid contracted health plan shall recover the full cost of expenses paid under this act unless the state department or the Medicaid contracted health plan agrees to accept an amount less than the full amount. If the individual would recover less against the proceeds of the net recovery than the expenses paid under this act, the state department or Medicaid contracted health plan, and the individual shall share equally in the proceeds of the net recovery. As used in this subsection, “net recovery” means the total settlement or judgment less the costs and fees incurred by or on behalf of the individual who obtains the settlement or judgment.
Question:
I have 2 questions for you about Medicaid. I have tried researching and have come up empty handed. Question 1: Medicaid. Do we have a duty to notify Medicaid of a potential lien in an asbestos case in Michigan? Is there a pre 1980 rule like in Medicare? I could use authority for this? Question 2: IRS. If we believe a client has an IRS lien, do we have a duty to notify the IRS? This lien is more than 10 years old, and there does not appear to be a judgment, but we want to cover ourselves. Thanks so much for your time.
-Michigan Attorney
Answer:
With respect to Medicaid, there is no pre-1980 rule as “1980” is relevant to the year in which the Medicare Secondary Payer statute was passed. With respect to Medicaid, the rules concerning “notice” are all governed by the state Medicaid statute. Many of those state statutes have been changed in the recent years (after Ahlborn) to require affirmative notice to the state when settlement occurs.
To answer your question, I’ve compiled the following summary:
1. MCLA §400.106(4) (eff. 11/24/04) places an affirmative duty on a Medicaid beneficiary and/or his/her representative (counsel) to notify the MI Dept of Community Health and Casualty Unit (Medicaid tort recovery unit) anytime a settlement is pending for which injury-related medical expenses were paid for by Medicaid. (See below)
M.C.L.A. 400.106
Michigan Compiled Laws Annotated Currentness
Chapter 400. Social Services
The Social Welfare Act (Refs & Annos)
County Department of Social Services
400.106. Medically indigent individual defined; other definitions; actions wherein state department and/or Medicaid contracted health plan have right to recover expenses, notice, settlements, priority for recovery against proceedsSec. 106. (1) A medically indigent individual is defined as:
(3) An individual receiving medical assistance under this act or his or her legal counsel shall notify the state department when filing an action in which the state department may have a right to recover expenses paid under this act. If the individual is enrolled in a Medicaid contracted health plan, the individual or his or her legal counsel shall provide notice to the Medicaid contracted health plan in addition to providing notice to the state department.
(4) If a legal action in which the state department, a Medicaid contracted health plan, or both has a right to recover expenses paid under this act is filed and settled after November 29, 2004 without notice to the state department or the Medicaid contracted health plan, the state department or the Medicaid contracted health plan may file a legal action against the individual or his or her legal counsel, or both, to recover expenses paid under this act. The attorney general shall recover any cost or attorney fees associated with a recovery under this subsection.
(5) The state department has first priority against the proceeds of the net recovery from the settlement or judgment in an action settled in which notice has been provided under subsection (3). A Medicaid contracted health plan has priority immediately after the state department in an action settled in which notice has been provided under subsection (3). The state department and a Medicaid contracted health plan shall recover the full cost of expenses paid under this act unless the state department or the Medicaid contracted health plan agrees to accept an amount less than the full amount. If the individual would recover less against the proceeds of the net recovery than the expenses paid under this act, the state department or Medicaid contracted health plan, and the individual shall share equally in the proceeds of the net recovery. As used in this subsection, “net recovery” means the total settlement or judgment less the costs and fees incurred by or on behalf of the individual who obtains the settlement or judgment.
Sunday, November 22, 2009
Medicare Compliance in Motor Vehicle Accidents
Posted by John Cattie
Question:
I am trying to settle a Motor Vehicle Accident case with a knee injury. My client was born 12/02/45 making him more than 62 1/2 years old and Medicare eligible in 30 months or less. Settlement will be less than 100,000. There is a 50% chance of having knee replacement surgery at some point in the future. Treating Ortho says total medical costs in today’s dollars approximately $20,000. The client is eligible for No-Fault medical. Approximately $14,000 left available. What needs to be done as far as Medicare is concerned? Thanks in advance.
Minnesota Attorney
Answer:
When we talk about achieving absolute Medicare compliance, we are really talking about two separate and distinct moving parts. Medicare has: 1) past interests, represented by conditional payments made from the date of injury to the date of settlement for injury-related care; and 2) future interests, represented by payments made by Medicare from the date of settlement going forward. Only when both interests are properly addressed may one attain absolute Medicare compliance.
To satisfy Medicare's past interests, the parties must reimburse Medicare for those conditional payments made. Typically, this is done out of the settlement proceeds once the final settlement has occurred. To satisfy Medicare's future interests, the claimant should determine whether a Medicare Set-aside Arrangement ("MSA") would be appropriate. While we know that MSAs are commonly used in workers' comp cases, the use of MSAs in a liability case is rare. Basically, a MSA is only appropriate in a liability case if the settlement release contains a definitive allocation to future meds or there is a jury verdict form containing a line item for future meds.
In a MVA case you ask about, two issues need to be addressed. 1) Medicare's past interests - since your client is not yet a Medicare beneficiary, Medicare would not have paid anything for injury-related care. Therefore, Medicare has no past interests that need be satisfied. 2) Medicare's future interests - because this is a MVA with no known workers' comp component, unless the settlement release contains a definitive allocation to future medical expenses, a MSA is not necessary. Therefore, Medicare's interests are fully protected.
Even though a MSA is not necessary, you will want to document your file and memorialize the fact that you considered Medicare's interests at the time of settlement. Ways of doing that are inserting Medicare specific language into the release depicting that the settling parties considered Medicare's interests or getting documentation from a professional operating in the Medicare compliance space showing that you considered Medicare's interests by seeking an independent 3rd party evaluation of your case.
Hope this helps,
John Cattie
Question:
I am trying to settle a Motor Vehicle Accident case with a knee injury. My client was born 12/02/45 making him more than 62 1/2 years old and Medicare eligible in 30 months or less. Settlement will be less than 100,000. There is a 50% chance of having knee replacement surgery at some point in the future. Treating Ortho says total medical costs in today’s dollars approximately $20,000. The client is eligible for No-Fault medical. Approximately $14,000 left available. What needs to be done as far as Medicare is concerned? Thanks in advance.
Minnesota Attorney
Answer:
When we talk about achieving absolute Medicare compliance, we are really talking about two separate and distinct moving parts. Medicare has: 1) past interests, represented by conditional payments made from the date of injury to the date of settlement for injury-related care; and 2) future interests, represented by payments made by Medicare from the date of settlement going forward. Only when both interests are properly addressed may one attain absolute Medicare compliance.
To satisfy Medicare's past interests, the parties must reimburse Medicare for those conditional payments made. Typically, this is done out of the settlement proceeds once the final settlement has occurred. To satisfy Medicare's future interests, the claimant should determine whether a Medicare Set-aside Arrangement ("MSA") would be appropriate. While we know that MSAs are commonly used in workers' comp cases, the use of MSAs in a liability case is rare. Basically, a MSA is only appropriate in a liability case if the settlement release contains a definitive allocation to future meds or there is a jury verdict form containing a line item for future meds.
In a MVA case you ask about, two issues need to be addressed. 1) Medicare's past interests - since your client is not yet a Medicare beneficiary, Medicare would not have paid anything for injury-related care. Therefore, Medicare has no past interests that need be satisfied. 2) Medicare's future interests - because this is a MVA with no known workers' comp component, unless the settlement release contains a definitive allocation to future medical expenses, a MSA is not necessary. Therefore, Medicare's interests are fully protected.
Even though a MSA is not necessary, you will want to document your file and memorialize the fact that you considered Medicare's interests at the time of settlement. Ways of doing that are inserting Medicare specific language into the release depicting that the settling parties considered Medicare's interests or getting documentation from a professional operating in the Medicare compliance space showing that you considered Medicare's interests by seeking an independent 3rd party evaluation of your case.
Hope this helps,
John Cattie
Friday, November 20, 2009
A Medicare Supplement Question
Posted by Elizabeth Vish
Question:
I ran across your site while researching a Medicare Supplement question and wondered if you might be kind enough to help. Here's the question:
Does Medicare's Super Lien subrogation powers go to supplemental coverage as well? The state that I am referring to is Missouri, a non-subrogation state. If not, are there any different or other special lien subrogations for these policies? If not, do normal state lien and subrogation rules apply?
Thank you.
Missouri Attorney
Answer:
Medicare supplemental plans (Part C, Medicare HMOs) “may” have the same right of recovery of traditional federal Medicare, but they must have the “magic” language in their plan. See Care Choices HMO v. Engstrom 330 F3d 786 (6th 2003) saying these plans can create the same reimbursement right as Federal Medicare has IF it is in their plan agreement with the Medicare beneficiary.
There continues to be a debate as to whether state law (defenses) applies (b/c these clearly aren’t ERISA plans) – the plan will argue that state law is preempted if they have contractual reimbursement language since the language (if the plans included it) gives the plan a reimbursement right arising out of federal law (42 U.S.C. §1395mm(e)(4)).
Surprisingly, we find that about 50% of the Medicare Advantage Plans we review don’t have the contractual reimbursement language in them. The reason is that they originally thought they could get by with out it and still enjoy the reimbursement right arising out of federal law... Then, Engstrom comes down and they are caught in a situation where the court is saying, "No, you only get the strength of the federal reimbursement right" IF and only IF you included reimbursement language in your plan documents". So, you might be surprised that some of the older plans (which may have covered your clients at the date of injury) did not have the right language.I hope this helps. I have also copied, our in house ERISA/private lien subject matter expert, who can provide additional guidance.
My best,
Libby
Question:
I ran across your site while researching a Medicare Supplement question and wondered if you might be kind enough to help. Here's the question:
Does Medicare's Super Lien subrogation powers go to supplemental coverage as well? The state that I am referring to is Missouri, a non-subrogation state. If not, are there any different or other special lien subrogations for these policies? If not, do normal state lien and subrogation rules apply?
Thank you.
Missouri Attorney
Answer:
Medicare supplemental plans (Part C, Medicare HMOs) “may” have the same right of recovery of traditional federal Medicare, but they must have the “magic” language in their plan. See Care Choices HMO v. Engstrom 330 F3d 786 (6th 2003) saying these plans can create the same reimbursement right as Federal Medicare has IF it is in their plan agreement with the Medicare beneficiary.
There continues to be a debate as to whether state law (defenses) applies (b/c these clearly aren’t ERISA plans) – the plan will argue that state law is preempted if they have contractual reimbursement language since the language (if the plans included it) gives the plan a reimbursement right arising out of federal law (42 U.S.C. §1395mm(e)(4)).
Surprisingly, we find that about 50% of the Medicare Advantage Plans we review don’t have the contractual reimbursement language in them. The reason is that they originally thought they could get by with out it and still enjoy the reimbursement right arising out of federal law... Then, Engstrom comes down and they are caught in a situation where the court is saying, "No, you only get the strength of the federal reimbursement right" IF and only IF you included reimbursement language in your plan documents". So, you might be surprised that some of the older plans (which may have covered your clients at the date of injury) did not have the right language.I hope this helps. I have also copied, our in house ERISA/private lien subject matter expert, who can provide additional guidance.
My best,
Libby
Wednesday, November 18, 2009
Medicare’s Recovery Rights on Loss of Consortium Claim in Nursing Home Case
Posted by Matthew Garretson
Question:
I have a loss of consortium claim settled on behalf of surviving children (wrongful death claim). The estate did not receive anything. I’m looking for authority that states there is no Medicare right to recovery for medicals against children's recovery.
Thanks,
Arizona Attorney
Answer:
I recently prepared the following analysis of this question under Ohio law. I expect that most of it will be relevant to your question.
(1) Recovery Limited to state created rights. Medicare Secondary Payor rules (42 USC § 1395y(b)(2), 42 CFR §§ 411.24, 28) limit recovery to medical expenses incurred by the decedent. Medicare recovery does not extend to state-created rights for the decedent’s family to recover for his or her wrongful death, unless the Ohio statutes provide that medical expenses are recoverable by the beneficiaries as part of their claims under Ohio’ wrongful death statute.
(2) Ohio’s Wrongful Death Act. Ohio provides a cause of action whenever the death of a person is caused by wrongful act, neglect or default, and the act, neglect or default would have entitled the injured party (had he or she not died) to maintain an action for damages against the liable party. ORC § 2125.01.
(3) Who Brings The Action? The personal representative of the deceased Medicare beneficiary files suit for the exclusive benefit of the surviving spouse and next of kin of the decedent. ORC § 2125.02.
(4) From Which Claim Are Past Meds Recoverable? Under Ohio law, medical expenses paid by Medicare (on a conditional basis) are not recoverable from the wrongful death “estate”. Instead, a wrongful death action may be brought for the “exclusive benefit” of the decedent’s heirs. Recovery for wrongful death extends only to compensatory damages which include: loss of support; loss of services; loss of society; loss of prospective inheritance, and; mental anguish. ORC § 2125.02(B). No provision is made for recovery of the decedent’s medical expenses.
(5) Ohio Survival Act. Recovery of a decedent’s medical expenses must be pursued through a separate action on behalf of the decedent’s estate. Compensatory damages which include past medical expenses (paid by Medicare) are recoverable under Ohio’s Survival Act. ORC § 2305.21. Actions which survive death include actions for “injuries to the person.”
a. Survival action allows for recovery of damages for injuries sustained by deceased up to time of death. Jones v. Wittenberg University, 534 F.2d 1203 (6th Cir. 1976) (Applying Ohio law; reversed on other grounds)
b. In contrast with wrongful death actions, survival actions are not concerned with the wrong to the beneficiaries, but rather the wrong to the decedent. Jones v. Wittenberg University, 534 F.2d 1203 (Applying Ohio law; reversed on other grounds)
(6) Is there any authority for this Medicare lien recovery position? Yes.
a. In United States Fidelity & Guaranty Co. v. Decker, 122 Ohio St. 285 (Ohio 1930), the Ohio Supreme Court ruled that assets gained through a wrongful death action are not the assets of the estate. “It is not property which belonged to the decedent in his lifetime, and the claim did not come into existence until his death.” As such, the proceeds do not belong to the estate, but must be distributed to the beneficiaries.
b. In Fogt v. United Ohio Ins. Co., 76 Ohio App. 3d 24 (Ohio App. 1991), the Ohio Appellate Court held that, as wrongful death proceeds are not considered full assets of the estate, they “may not be used…to satisfy the decedent’s general or contracted debts.” See also State ex rel. Goldberg v. Mahoning County Probate Court, 93 Ohio St. 3d 160 (Ohio 2001).
(7) What do we learn from these cases? Decker and Fogt demonstrate that, in Ohio, recovery from a third party liability settlement (or award) under the Wrongful Death Act is:
• received by individuals to whom Medicare gave no benefit and not intended to reimburse for past medical expenses paid by Medicare;
• not fully considered to be a part of the estate, and may not be used to satisfy the debts of the estate.
Proceeds allocated to or resulting from an action under the Survival Act include:
• compensatory damages such as past medical expenses, which are allocated to the decedent’s estate, under which Medicare stands in the same shoes as that of any other general creditor.
AND…while Medicare does not expressly limit its right of recovery to exclude wrongful death portions of an award, Medicare is only recovering for medical expenses paid. To that extent, Medicare’s recovery right will follow the estate within which those same medical expenses are claimed as a measure of damages. To the extent that Ohio statutes provide for the measure of damages in both a survival action and a wrongful death action, Medicare will follow Ohio law.
My best,
Matt Garretson
Question:
I have a loss of consortium claim settled on behalf of surviving children (wrongful death claim). The estate did not receive anything. I’m looking for authority that states there is no Medicare right to recovery for medicals against children's recovery.
Thanks,
Arizona Attorney
Answer:
I recently prepared the following analysis of this question under Ohio law. I expect that most of it will be relevant to your question.
(1) Recovery Limited to state created rights. Medicare Secondary Payor rules (42 USC § 1395y(b)(2), 42 CFR §§ 411.24, 28) limit recovery to medical expenses incurred by the decedent. Medicare recovery does not extend to state-created rights for the decedent’s family to recover for his or her wrongful death, unless the Ohio statutes provide that medical expenses are recoverable by the beneficiaries as part of their claims under Ohio’ wrongful death statute.
(2) Ohio’s Wrongful Death Act. Ohio provides a cause of action whenever the death of a person is caused by wrongful act, neglect or default, and the act, neglect or default would have entitled the injured party (had he or she not died) to maintain an action for damages against the liable party. ORC § 2125.01.
(3) Who Brings The Action? The personal representative of the deceased Medicare beneficiary files suit for the exclusive benefit of the surviving spouse and next of kin of the decedent. ORC § 2125.02.
(4) From Which Claim Are Past Meds Recoverable? Under Ohio law, medical expenses paid by Medicare (on a conditional basis) are not recoverable from the wrongful death “estate”. Instead, a wrongful death action may be brought for the “exclusive benefit” of the decedent’s heirs. Recovery for wrongful death extends only to compensatory damages which include: loss of support; loss of services; loss of society; loss of prospective inheritance, and; mental anguish. ORC § 2125.02(B). No provision is made for recovery of the decedent’s medical expenses.
(5) Ohio Survival Act. Recovery of a decedent’s medical expenses must be pursued through a separate action on behalf of the decedent’s estate. Compensatory damages which include past medical expenses (paid by Medicare) are recoverable under Ohio’s Survival Act. ORC § 2305.21. Actions which survive death include actions for “injuries to the person.”
a. Survival action allows for recovery of damages for injuries sustained by deceased up to time of death. Jones v. Wittenberg University, 534 F.2d 1203 (6th Cir. 1976) (Applying Ohio law; reversed on other grounds)
b. In contrast with wrongful death actions, survival actions are not concerned with the wrong to the beneficiaries, but rather the wrong to the decedent. Jones v. Wittenberg University, 534 F.2d 1203 (Applying Ohio law; reversed on other grounds)
(6) Is there any authority for this Medicare lien recovery position? Yes.
a. In United States Fidelity & Guaranty Co. v. Decker, 122 Ohio St. 285 (Ohio 1930), the Ohio Supreme Court ruled that assets gained through a wrongful death action are not the assets of the estate. “It is not property which belonged to the decedent in his lifetime, and the claim did not come into existence until his death.” As such, the proceeds do not belong to the estate, but must be distributed to the beneficiaries.
b. In Fogt v. United Ohio Ins. Co., 76 Ohio App. 3d 24 (Ohio App. 1991), the Ohio Appellate Court held that, as wrongful death proceeds are not considered full assets of the estate, they “may not be used…to satisfy the decedent’s general or contracted debts.” See also State ex rel. Goldberg v. Mahoning County Probate Court, 93 Ohio St. 3d 160 (Ohio 2001).
(7) What do we learn from these cases? Decker and Fogt demonstrate that, in Ohio, recovery from a third party liability settlement (or award) under the Wrongful Death Act is:
• received by individuals to whom Medicare gave no benefit and not intended to reimburse for past medical expenses paid by Medicare;
• not fully considered to be a part of the estate, and may not be used to satisfy the debts of the estate.
Proceeds allocated to or resulting from an action under the Survival Act include:
• compensatory damages such as past medical expenses, which are allocated to the decedent’s estate, under which Medicare stands in the same shoes as that of any other general creditor.
AND…while Medicare does not expressly limit its right of recovery to exclude wrongful death portions of an award, Medicare is only recovering for medical expenses paid. To that extent, Medicare’s recovery right will follow the estate within which those same medical expenses are claimed as a measure of damages. To the extent that Ohio statutes provide for the measure of damages in both a survival action and a wrongful death action, Medicare will follow Ohio law.
My best,
Matt Garretson
Monday, November 16, 2009
Can A Set-Aside Amount Change If A Drug Becomes Generic?
Posted by John Cattie
Question:
I have seen your information through WILG which is always informative. Can you answer a question? If a set aside includes say $20,000 for Cymbalta use and that medication later becomes available as a generic, could it be possible to petition CMS for a reduction as the medication is no longer say $10 dose, but now $2? Numbers are just for example purposes, of course, but the general idea is interesting.
-New York Attorney
Answer:
This is a very good question. CMS’ most recent Memo (April 2009) discusses prescription drugs in MSAs, but it does not directly answer your question. Before answering your question, there are a couple important points to keep in mind: 1) the submission of a MSA proposal to CMS for review and approval is voluntary, not mandatory; and 2) CMS has workload review thresholds in place that allow submission only in certain circumstances.
Having said that, I think that if/when a generic equivalent to Cymbalta becomes available, the switch to that generic equivalent can be made and the MSA amount reduce based on the average wholesale price (AWP) of that generic equivalent. CMS tells us that, so long as the MSA proposal specifically names the generic equivalent to be taken and that generic equivalent exists, then it is proper for the generic to be included as opposed to the name brand drug.
Therefore, 1) if the MSA proposal is not/has not been submitted to CMS, it’s OK to change from Cymbalta to the generic and adjust the MSA amount appropriately. Just keep records as to why the change is occurring. 2) If the MSA proposal is/has been submitted to CMS, while we do not have exact guidance from CMS, I believe a petition to CMS to change based on the new generic becoming available would be proper.
My best,
John Cattie
Question:
I have seen your information through WILG which is always informative. Can you answer a question? If a set aside includes say $20,000 for Cymbalta use and that medication later becomes available as a generic, could it be possible to petition CMS for a reduction as the medication is no longer say $10 dose, but now $2? Numbers are just for example purposes, of course, but the general idea is interesting.
-New York Attorney
Answer:
This is a very good question. CMS’ most recent Memo (April 2009) discusses prescription drugs in MSAs, but it does not directly answer your question. Before answering your question, there are a couple important points to keep in mind: 1) the submission of a MSA proposal to CMS for review and approval is voluntary, not mandatory; and 2) CMS has workload review thresholds in place that allow submission only in certain circumstances.
Having said that, I think that if/when a generic equivalent to Cymbalta becomes available, the switch to that generic equivalent can be made and the MSA amount reduce based on the average wholesale price (AWP) of that generic equivalent. CMS tells us that, so long as the MSA proposal specifically names the generic equivalent to be taken and that generic equivalent exists, then it is proper for the generic to be included as opposed to the name brand drug.
Therefore, 1) if the MSA proposal is not/has not been submitted to CMS, it’s OK to change from Cymbalta to the generic and adjust the MSA amount appropriately. Just keep records as to why the change is occurring. 2) If the MSA proposal is/has been submitted to CMS, while we do not have exact guidance from CMS, I believe a petition to CMS to change based on the new generic becoming available would be proper.
My best,
John Cattie
Friday, November 13, 2009
The New MMSEA Reporting Obligations
Posted by Sylvius Von Saucken
Question:
Could you confirm that the new MMSEA reporting obligations apply to settlements on or after Jan. 1, 2010, and has not been extended to some other date?
-Kentucky Attorney
Answer:
As of today’s date, we are unaware of any extension of time for the trigger date for RREs needing to report settlements involving Medicare beneficiaries beyond Jan. 1, 2010. Per CMS’ User Guide (version 2.0, dated July 31, 2009), the reporting obligations apply on or after Jan. 1 2010. An excerpt from that Guide is below:
Section 111 RREs are required to register with the COBC and fully test the data submission process before submitting production Claim Input Files. RREs will be assigned a quarterly file submission timeframe during which they are to submit Claim Input Files. Once in a production mode, RREs will submit their initial claim files containing information for all liability insurance (including self-insurance), no-fault insurance, and workers’ compensation claims involving a Medicare beneficiary as the injured party where the settlement, judgment, award or other payment date is January 1, 2010, or subsequent, and which meet the reporting thresholds described later in this guide. In addition, initial claim files must include claims on which ongoing responsibility for medical payments exists as of July 1, 2009 and subsequent, regardless of the date of an initial acceptance of payment responsibility (see the Qualified Exception in Section 11.9). Subsequent quarterly file submissions are to contain only new or changed claim information using add, delete and update transactions.
Note – ORM still requires a July 1, 2009 starting date, but ORM applies to WC cases, not liability cases. In other words, if a RRE agrees to start paying for ongoing medicals after July 1, 2009 and stops paying for those medicals as part of a settlement involving a payment for other damages, that RRE reports twice, with the first report occurring between April 1 and June 30, 2010 for those cases where ORM started on or after July 1, 2009.
Our best,
Sylvius von Saucken
Question:
Could you confirm that the new MMSEA reporting obligations apply to settlements on or after Jan. 1, 2010, and has not been extended to some other date?
-Kentucky Attorney
Answer:
As of today’s date, we are unaware of any extension of time for the trigger date for RREs needing to report settlements involving Medicare beneficiaries beyond Jan. 1, 2010. Per CMS’ User Guide (version 2.0, dated July 31, 2009), the reporting obligations apply on or after Jan. 1 2010. An excerpt from that Guide is below:
Section 111 RREs are required to register with the COBC and fully test the data submission process before submitting production Claim Input Files. RREs will be assigned a quarterly file submission timeframe during which they are to submit Claim Input Files. Once in a production mode, RREs will submit their initial claim files containing information for all liability insurance (including self-insurance), no-fault insurance, and workers’ compensation claims involving a Medicare beneficiary as the injured party where the settlement, judgment, award or other payment date is January 1, 2010, or subsequent, and which meet the reporting thresholds described later in this guide. In addition, initial claim files must include claims on which ongoing responsibility for medical payments exists as of July 1, 2009 and subsequent, regardless of the date of an initial acceptance of payment responsibility (see the Qualified Exception in Section 11.9). Subsequent quarterly file submissions are to contain only new or changed claim information using add, delete and update transactions.
Note – ORM still requires a July 1, 2009 starting date, but ORM applies to WC cases, not liability cases. In other words, if a RRE agrees to start paying for ongoing medicals after July 1, 2009 and stops paying for those medicals as part of a settlement involving a payment for other damages, that RRE reports twice, with the first report occurring between April 1 and June 30, 2010 for those cases where ORM started on or after July 1, 2009.
Our best,
Sylvius von Saucken
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