Wednesday, December 30, 2009
Happy New Year from The Garretson Firm Resolution Group.
Our offices will be closed on January 1, 2010. We will reopen January 4, 2010. Happy New Year!
How Does New York's Anti-Subrogation Law Effect ERISA Plan's
Question
In light of the enactment of NY's anti-subrogation law (GOL 5-335 and CPLR 4545), what effect does that have on a Self-Funded ERISA plan's attempt to assert a lien on a personal injury settlement (note: notice of the lien was asserted prior to passage of the legislation?
Answer
ERISA expressly preempts state laws insofar as they relate to employee benefit plans (29 U.S.C. 1144(a)).HOWEVER, under ERISA this 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. Thus; for a state law to apply, it must be found to regulate insurance. Click here to find a summary piece we distributed after the passing of this new law.We feel that the NY law regulates insurance as we discuss in the piece below.The rub is that if state law regulates insurance (and thus is not preempted) it will apply to insurance companies. Unfortunately, the Supreme Court in FMC Corp v. Holiday, 498 US 52, 61 (1990) held that the "Deemer clause" exempts self-funded plans under ERISA from state laws that "regulate insurance" within meaning of the saving clause, and thus self-funded ERISA plans are exempt from state regulation insofar as that regulation relates to the plans. Thus, a self-funded plan would most likely NOT be effected by the new legislation.Until case law begins to build based upon this new legislation I believe this is the reasonable interpretation.
I hope you find this response helpful.
Michael Russell
In light of the enactment of NY's anti-subrogation law (GOL 5-335 and CPLR 4545), what effect does that have on a Self-Funded ERISA plan's attempt to assert a lien on a personal injury settlement (note: notice of the lien was asserted prior to passage of the legislation?
Answer
ERISA expressly preempts state laws insofar as they relate to employee benefit plans (29 U.S.C. 1144(a)).HOWEVER, under ERISA this 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. Thus; for a state law to apply, it must be found to regulate insurance. Click here to find a summary piece we distributed after the passing of this new law.We feel that the NY law regulates insurance as we discuss in the piece below.The rub is that if state law regulates insurance (and thus is not preempted) it will apply to insurance companies. Unfortunately, the Supreme Court in FMC Corp v. Holiday, 498 US 52, 61 (1990) held that the "Deemer clause" exempts self-funded plans under ERISA from state laws that "regulate insurance" within meaning of the saving clause, and thus self-funded ERISA plans are exempt from state regulation insofar as that regulation relates to the plans. Thus, a self-funded plan would most likely NOT be effected by the new legislation.Until case law begins to build based upon this new legislation I believe this is the reasonable interpretation.
I hope you find this response helpful.
Michael Russell
Monday, December 7, 2009
Is Medicare Entitled To Any Reimbursement Where It Is Not The "Medicare Recipient," But An Heir?
Posted by John Cattie
Question:
Our client's mother was a passenger in a vehicle being driven by a family member. Mother sustained massive injuries, was hospitalized more than a month, and passed away three months later. Our client brought a wrongful death case against the driver, policy limits only 25/50, and insurance company wants to deduct $25,000 for contributory negligence.
Our question: Is Medicare entitled to any reimbursement where it is not the "Medicare recipient" receiving the settlement, but an heir?
An added note: The decedent had no assets, so no probate estate has been opened.
Thank you.
Missouri Attorney
Answer:
Great question. According to the Medicare policy, a beneficiary’s death does not materially change Medicare’s interest in recovering its payments made on behalf of the beneficiary while alive. Upon death, the estate of the beneficiary comes into existence by operation of law. An executor or administrator whose sole purpose is to conclude all business and financial matters that still remained at death manages it. Medicare’s interest in the outcome of a third party liability claim is one of these matters. Therefore, Medicare’s claim is properly asserted against the estate.
Medicare’s policy also sets forth the steps to be taken by the Medicare contractor in such situation: 1) when the contractor learns that the beneficiary has died, it identifies and contacts the executor or administrator, or whoever is acting in that capacity. It finds out if they are in possession of all Medicare correspondence that had been sent to the beneficiary while alive. If the information was not available, it sends the executor or administrator dated copies of all such notices; 2) if a settlement has been reached, a letter containing an initial determination should have been sent. The rights to request a waiver and/or appeal that are expressed in this letter apply equally to the estate, if there is a surviving spouse or dependent that is entitled under Title II or XVIII. When neither of these parties exists, waiver under §1870(c) may not be granted. (However, relief may still be available under §1862(b) or FCCA; and 3) the contractor will ensure that the executor or administrator understands Medicare’s priority right to satisfaction of its claim be re-emphasizing the fact in conversations.
In short, Medicare’s recovery rights are not ended by virtue of the beneficiary’s passing. However, you have told us that no estate has been opened due to the beneficiary having no assets. This appears as though a waiver could be argued based on financial hardship, but more facts would be needed to determine whether a waiver would really be appropriate. For additional guidance, please contact our Lien Resolution Supervisor, Joanne Saccone, at (704) 559-4300.
My best,
John Cattie
Question:
Our client's mother was a passenger in a vehicle being driven by a family member. Mother sustained massive injuries, was hospitalized more than a month, and passed away three months later. Our client brought a wrongful death case against the driver, policy limits only 25/50, and insurance company wants to deduct $25,000 for contributory negligence.
Our question: Is Medicare entitled to any reimbursement where it is not the "Medicare recipient" receiving the settlement, but an heir?
An added note: The decedent had no assets, so no probate estate has been opened.
Thank you.
Missouri Attorney
Answer:
Great question. According to the Medicare policy, a beneficiary’s death does not materially change Medicare’s interest in recovering its payments made on behalf of the beneficiary while alive. Upon death, the estate of the beneficiary comes into existence by operation of law. An executor or administrator whose sole purpose is to conclude all business and financial matters that still remained at death manages it. Medicare’s interest in the outcome of a third party liability claim is one of these matters. Therefore, Medicare’s claim is properly asserted against the estate.
Medicare’s policy also sets forth the steps to be taken by the Medicare contractor in such situation: 1) when the contractor learns that the beneficiary has died, it identifies and contacts the executor or administrator, or whoever is acting in that capacity. It finds out if they are in possession of all Medicare correspondence that had been sent to the beneficiary while alive. If the information was not available, it sends the executor or administrator dated copies of all such notices; 2) if a settlement has been reached, a letter containing an initial determination should have been sent. The rights to request a waiver and/or appeal that are expressed in this letter apply equally to the estate, if there is a surviving spouse or dependent that is entitled under Title II or XVIII. When neither of these parties exists, waiver under §1870(c) may not be granted. (However, relief may still be available under §1862(b) or FCCA; and 3) the contractor will ensure that the executor or administrator understands Medicare’s priority right to satisfaction of its claim be re-emphasizing the fact in conversations.
In short, Medicare’s recovery rights are not ended by virtue of the beneficiary’s passing. However, you have told us that no estate has been opened due to the beneficiary having no assets. This appears as though a waiver could be argued based on financial hardship, but more facts would be needed to determine whether a waiver would really be appropriate. For additional guidance, please contact our Lien Resolution Supervisor, Joanne Saccone, at (704) 559-4300.
My best,
John Cattie
Friday, December 4, 2009
One Line Charges to Medicare
Posted by Carol Brown
Question:
We have probably all run into the above problem, that is, when receiving a conditional payment summary or final demand from Medicare one or more of the line item charges include multiple diagnosis codes, of which, some, but not all, are related to the claim.
In simpler terms, because I’m not sure the above sentence is structurally sound; say you have a fall where your client suffers a broken hip. You receive correspondence from Medicare and there is a line item charge for $100, with diagnosis codes related to fracture and, for example, diabetes. You have no way of knowing how much of the $100 is related to your case and how much is not since there is just one charge and multiple diagnosis codes.
So, naturally, you call Medicare. Ever helpful, they say, “Sorry, we can’t parse the charges out, you owe the entire $100.”
Now, this can’t be the law. Because after all, while Medicare has a claim for reimbursement, its only claim is for payments related to your case. Not for unrelated charges (such as diabetes in the example). And, it seems to me, that since Medicare has the claim, it must bear the burden of proving its claim. It can’t just say “too bad, pay the entire charge.”
How has anyone dealt with this issue, and has anyone had any success? I’m looking to see what others are doing in this regard.
Thanks,
Pennsylvania Attorney
Answer:
By way of background, typically this issue is a result of a provider’s billing practices. If a provider billed these charges together, they typically show up in Medicare’s system together and then end up as one line item, whether the charges are related or not. As of our latest understanding of Medicare’s system, it does not allow for separation of these line items. There are appeal options to dispute claims pulls including the ability to request a hearing before an ALJ, but this is akin to your compromise request approach and can be time consuming. The viability of this approach would obviously depend on the amount of non-incident related included in the claims.
Carol Brown
Question:
We have probably all run into the above problem, that is, when receiving a conditional payment summary or final demand from Medicare one or more of the line item charges include multiple diagnosis codes, of which, some, but not all, are related to the claim.
In simpler terms, because I’m not sure the above sentence is structurally sound; say you have a fall where your client suffers a broken hip. You receive correspondence from Medicare and there is a line item charge for $100, with diagnosis codes related to fracture and, for example, diabetes. You have no way of knowing how much of the $100 is related to your case and how much is not since there is just one charge and multiple diagnosis codes.
So, naturally, you call Medicare. Ever helpful, they say, “Sorry, we can’t parse the charges out, you owe the entire $100.”
Now, this can’t be the law. Because after all, while Medicare has a claim for reimbursement, its only claim is for payments related to your case. Not for unrelated charges (such as diabetes in the example). And, it seems to me, that since Medicare has the claim, it must bear the burden of proving its claim. It can’t just say “too bad, pay the entire charge.”
How has anyone dealt with this issue, and has anyone had any success? I’m looking to see what others are doing in this regard.
Thanks,
Pennsylvania Attorney
Answer:
By way of background, typically this issue is a result of a provider’s billing practices. If a provider billed these charges together, they typically show up in Medicare’s system together and then end up as one line item, whether the charges are related or not. As of our latest understanding of Medicare’s system, it does not allow for separation of these line items. There are appeal options to dispute claims pulls including the ability to request a hearing before an ALJ, but this is akin to your compromise request approach and can be time consuming. The viability of this approach would obviously depend on the amount of non-incident related included in the claims.
Carol Brown
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