Friday, April 30, 2010

Providing Clients' Social Security Number To A Responsible Reporting Entity

What is the general consensus about providing a client's SS # to an insurance company "because Medicaid now requires reporting."

I was told the following: “Write a letter back to the insurance company asking them to put in writing that they will use the SS# for the sole purpose of running it through the CMS Query Access System. Additionally, ask the insurance company to put in writing that they agree not to disseminate the SS# to anyone or entity other than Medicare and also those they agree to indemnify your client for attorney's fees and damages should they breach these terms. If they agree to the terms, provide the SS# before settlement. Otherwise, provide the SS# after settlement as is required by the statute. This usually ends the conversation.”

Ohio Attorney

I agree completely. I would just add that in order for the insurance company (known as the Responsible Reporting Entity “RRE” for purposes of Section 111 Reporting”) to run the query system, they need four data points: Name; DOB; Gender; and SS# or Medicare #. I would suggest you provide these 4 pieces of information with exactly the same limited use language articulated below. I would encourage you to provide this in your very first communication with the insurance company. This will allow them to ping the query system right away, which tells them YES or NO as to your client’s Medicare entitlement (it tells them nothing else). Instead of relying on your client to tell you whether or not they are on Medicare, you can use the defendant to tell you (assuming you tell them to provide you with their results of the query search).

Additionally, if you wait until settlement time to provide this information, it will cause significant disbursement delays. If you refuse to provide the information, the insurance company will either not fund the settlement, or they will put Medicare’s name on the check which will cause a minimum of 10-12 week delay.

I would also note that these new insurer reporting requirements ONLY affect Medicare Parts A&B; not Medicaid or any other parts of Medicare (C&D).

Tate G. Johnson

Thursday, April 29, 2010

Does Medicaid Have A Right Of Subrogation On The Wrongful Death Claim?

I represent the children of an older gentleman who died after sustaining serious bodily injuries in Texas. We put the insurance company on notice of a wrongful death claim which they settled. We did not bring a survivorship claim. Does Medicaid have a right of subrogation on the wrongful death claim?

Texas Attorney

We appreciate you reaching out to us with your question. Texas Medicaid's right of recovery is found at VTCA HRC §32.033 (see below). Texas Medicaid may have a right of recovery for the decedent's injury related care for which they paid. Additionally, they may have a Medicaid Estate Recovery claim for expenditures unrelated to the injury.

Please let me know if we can be of further assistance with either of these potential obligations.

My best,
Elizabeth Vish

Sec. 32.033. SUBROGATION. (a) The filing of an application for or receipt of medical assistance constitutes an assignment of the applicant's or recipient's right of recovery from:

(1) Personal insurance;

(2) Other sources; or

(3) Another person for personal injury caused by the other person's negligence or wrong.

(b) A person who applies for or receives medical assistance shall inform the department, at the time of application or at any time during eligibility and receipt of services, of any unsettled tort claim which may affect medical needs and of any private accident or sickness insurance coverage that is or may become available. A recipient shall inform the department of any injury requiring medical attention that is caused by the act or failure to act of some other person. An applicant or a recipient shall inform the department as required by this subsection within 60 days of the date the person learns of his or her insurance coverage, tort claim, or potential cause of action. An applicant or a recipient who knowingly and intentionally fails to disclose the information required by this subsection commits a Class C misdemeanor.

(c) A claim for damages for personal injury does not constitute grounds for denying or discontinuing assistance under this chapter.

(d) A separate and distinct cause of action in favor of the state is hereby created, and the department may, without written consent, take direct civil action in any court of competent jurisdiction. A suit brought under this section need not be ancillary to or dependent upon any other action.

(e) The department's right of recovery is limited to the amount of the cost of medical care services paid by the department. Other subrogation rights granted under this section are limited to the cost of the services provided.

(f) The commissioner may waive the department's right of recovery in whole or in part when the commissioner finds that enforcement would tend to defeat the purpose of public assistance.

(g) The department may designate an agent to collect funds the department has a right to recover from third parties under this section. The department shall use any funds collected to pay costs of administering the medical assistance program.

(h) The department may adopt rules for the enforcement of its right of recovery.

Tuesday, April 27, 2010

Medical Malpractice Liability Insurer Question

I am pursuing a medical malpractice claim against a California nursing home and a VA hospital, both of whom were partly responsible for a single injury. The VA provided all care to fix the injury, on its own dime; it is now asserting a lien regarding this care. Am I reading 38 USC 1729 too narrowly if I argue that a medical malpractice liability insurer is not among the third-parties to whom this section applies?

California Attorney

You raise an interesting argument, but one that is not likely to be agreed upon by a court. Technically, the term third party is defined under 38 U.S.C. §1729(i)(3)(D) to include a “person obligated to provide, or to pay the expenses of health services under a health-plan contract.”

The definition of a health plan contract under 38 U.S.C. §1729(i)(1)(A) includes a contract, medical or hospital service agreement (under which services are provided). Depending on the long-term care agreement that had your client receiving treatment at the nursing home, the nursing home is likely to be considered a third party within the meaning of the statute.

Even if you could argue that the statute is intended to be read to exclude the nursing home, arguably, the statute itself is going to be broadly construed as a statute providing recovery by the United States of cost of care and services furnished to a veteran for non-service-related injuries as part of Congress’ power to raise and support armies. A state’s argument that the statute violated the U.S. Constitution (Tenth Amendment) failed based on this very same rationale adopted by the federal court (U.S. v. State of Md., 914 F.2d 551 (1990)).

A more intriguing challenge is the argument that the United States remains partially to blame for the injuries for which it now claims to be able to be reimbursed. Clearly, the United States is not a third party within the meaning of the statute. If, for example, the United States wishes to recover against the nursing home for the nursing home’s share of medical expenses the United States incurred, it might do so by intervening in a separate cause of action, depending on whether the statute of limitations remains open for it to do so. However, the United States should not be able to recover for any medical expenses it incurred for which responsibility lies at the feet of the United States, through its representatives.

Sylvius von Saucken

Thursday, April 22, 2010

Medicare's Interest In A Med Pay Accident

I have a client who was involved in a serious automobile accident and is now paralyzed from the waist down. He will be in the hospital for months and his medical bills are already in excess of $500,000. Medicare is his primary health insurer and the no-fault Med Pay of $10,000 is exhausted. There is only $125,000 available from the tortfeasor and my client's underinsured motorist coverage.

I have heard that it is possible to affect a pre-settlement compromise with Medicare and/or CMS in these types of situations. However, despite extensive research, I cannot seem to find any information on who to contact or how to attempt to negotiate a settlement of Medicare's interest prior to settling the case. Is that possible and, if so, how can I go about doing this? Otherwise, I fear that Medicare will be entitled to all of the funds, less procurement costs, leaving my client with nothing.

Thank you so much for your time and your invaluable questions and answers forum!!!

Nevada Attorney

In order to request a compromise you must go through all the hoops in securing Medicare's conditional payments. The first step is reporting the case to the COB at 800-999-1118. They will assign the case to the Medicare Secondary Payer Recovery Contractor (MSPRC). Once the case has been assigned to the MSPRC you will need to provide them with the proper authorization and in return they will provide you with Medicare's conditional payments. It is at this point that you can move forward with your pre settlement compromise request. The request would be sent to the MSPRC who in turn will forward it to the appropriate CMS Regional Office.

To request a compromise, you must specify the amount you want Medicare to accept in writing and the reason for the compromise and how you determined the amount to be repaid. A full reduction cannot be requested. A compromise may be requested any time after it has been determined that Medicare has made conditional payments, before or after settlement.

CMS is given authority to consider the compromise of Medicare's claim under the Federal Claims Collection Act (FCCA) at 31 USC, 3711 et seq. and 42 CFR 401.613. The MSPRC is not permitted to compromise a claim. Compromise requests are reviewed and determined by CMS Regional Office. A compromise decision made by CMS is final and is not subject to appeal.

If you need further assistance please don't hesitate to contact me.

My Best
Mary Skinner

Tuesday, April 20, 2010

Medicare Subrogation

I represent a man seriously injured due to the negligence of a state employee in a car wreck. Medicare has paid a lot of his medical bills and under federal statute has a right of subrogation. However, under R.C. 2743.02(D), recoveries against the state "shall be reduced by any collateral recovery received by the claimant"- construed to mean that the state is immune from subrogation claims from those entities which have paid the plaintiff's medical bills (see Community Ins. Co. v ODOT, (2001)92 Ohio St. 3rd 376). If the client receives no money from the state for the bills paid by Medicare, there is no money to satisfy Medicare's subrogation claim, other than whatever money is otherwise received from the state in settlement of the claim. Since non-economic damages in claims against the state are capped at $250,000, a claim against the state where Medicare has paid a significant amount may leave little or no money for the client if Medicare's subrogation claim must still be satisfied. The State is adamant that the U.S. Sup. Ct. Case of Alden v Maine supports its claim that insurance companies and Medicare may not maintain subrogation claims against the State of Ohio and that R.C. 2743.02 is not preempted by a federal law passed in the exercise of Article I, Sec. 8 authority is this correct?

Does the federal statutory right of subrogation for Medicare supersede the Ohio state law on this matter? Is Medicare still entitled to receive out of the proceeds of a settlement the amount it paid, despite the Ohio statutory and case law above? I think the answer to both questions is yes, but I'm hoping there are counter arguments supported by case law.

Ohio Attorney

Unfortunately Medicare is entitled to reimbursement for all injury related conditional payments made from date of injury to date of settlement, period. Having said that, I would highly recommend you consider one of several administrative remedies available to you and your client – Pre-settlement compromise, Post-settlement Compromise, or Post-settlement waiver. These remedies are great for situations where the client would end up with little or nothing if they had to pay back the entire conditional payment amount to Medicare. These are based on hardship and the general ideas of fairness and equity.

Please let me know if you need further information or would like our firm to assist.

Tate Johnson

Tuesday, April 13, 2010

ERISA Plan Funding

I attended one of your seminars but I cannot find my materials on the question below. With regard to the Plan funding arrangement on Form 5500, the company checked both (1)Insurance and (4) General assets of the sponsor. If the plan explicitly states it shall receive subrogation on a first priority basis do I have a leg to stand on in seeking a reduction?

I am glad to hear you attended one of our seminars and thank you for the question. As you will remember the Form 5500 can give you an indication as to how an ERISA plan is funded. The importance of funding status cannot be underestimated as the funding status will control whether we apply state or federal law. Based upon your inquiry it appears as though the plan uses insurance for certain benefits and self-funding for other benefits. The next step would be to check the Schedule A which accompanies the basic form. Schedule A should be filled out for each insurance policy that is used in the operation of the plan. Under line 7 of Schedule A it will indicate what type of policy you are dealing with. While the Form 5500 is a good indicator, these forms are not always accurate and they should be compared with any statements made in the Summary Plan Description.

Both insured Plans and self-funded Plans are both ERISA-covered. ERISA defines an employee welfare benefit plan as a plan, fund, or program; established or maintained; by an employer, an employee organization, or both through the purchase of insurance or otherwise, for the purpose of providing medical, surgical, or hospital care or benefits or benefits in the event of sickness, accident or disability, for its participants or their beneficiaries. The only exceptions are individual plans, government plans, and religious group plans. 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 and if an ERISA plan is in fact insured you can use state law defenses. Unfortunately Ohio virtually mirrors the 6th Circuit and thus funding status may not be a major concern in your case.

The language that states that it shall “receive subrogation on a first priority basis” really does not mean much. First and foremost, plans often rightfully distinguish between subrogation and reimbursement. Second, under ERISA a plan must be seeking an equitable remedy. ERISA plans are limited to seeking appropriate equitable relief. 29 U.S.C. § 1132(a)(3)(B). An ERISA plan has a right of reimbursement which sounds in equity if the plan language imposes a constructive trust or equitable lien upon a third party recovery. To qualify as equitable the plan language MUST 1) specify that recovery will be made from an identifiable fund and 2) specify that recovery must be limited to a specific portion of said fund. If either of these requirements are not met in the plan language, the plan does not have an equitable right to recovery and thus they do not have a reimbursement interest under ERISA. See Sereboff, 126 S.Ct. 1869 (2006). Thus it is important to make sure the plan is seeking an equitable remedy. Finally, you would want to see if the plan addresses equitable defenses which may apply such as the made whole doctrine (insured made whole before plan allowed to recover) and the common fund doctrine (reduction for procurement costs).

In conclusion the entire subrogation/reimbursement provision(s) of a plan needs to be carefully evaluated to ascertain whether the plan in fact has a right and whether any defenses would bar or limit that right. Also the plan may have other weaknesses based upon the underlying tort or the allocation of settlement proceeds.

If you have a copy of that language I would be more than happy to give it a quick review. Thanks for the question and please let me know if you have any follow-ups.

My Best,
Michael D. Russell

Thursday, April 8, 2010

Medicare's Name On The Check

In Florida, do insurance providers argue for Medicare to be a payee on a settlement check just because there is a Medicare lien to be paid back out of a settlement?

Connecticut Attorney

Our firm has been seeing the fact pattern of the settling party putting Medicare’s name on the check more and more in recent weeks, not only in Florida but around the country. The reason for this increase is because those entities are misunderstanding their Medicare compliance obligations in light of the MMSEA. They believe that, by putting Medicare’s (or Medicaid’s) name on the settlement check, Medicare’s interests (as well as themselves) have been fully protected. This is neither the intent of the MMSEA nor is this the most effective way to protect Medicare’s interests. In fact, there is no legal requirement to put Medicare’s name on the settlement check as a payee. Medicare was not a party to the legal action, merely an entity entitled under the Medicare Secondary Payer Act to be repaid for conditional payments made from date of injury to date of settlement.

As evidence that it is not required under law to put Medicare’s name on the check, we look to Tomlinson v. Landers, 2009 WL 1117399 (M.D.Fla.). The case and memo are available here. This was an auto accident case which was being settled for the $100K policy limit where Medicare had made some conditional payments. The defendant added Medicare’s name to the settlement check without discussing this prior with the plaintiff. The plaintiff returned the check, asking that it be re-issued without Medicare’s name on the check. The defendant insisted that it had no choice under federal law (namely 42 CFR 411.24) but to put Medicare’s name on the check. The plaintiff assured the defendant that Medicare would be reimbursed out of the settlement proceeds and agreed to indemnify defendant for any Medicare claims. The defendant refused to remove Medicare as a payee on the check.

The court held that: 1) federal law does not mandate that a primary payer (i.e. the defendant) make payment directly to Medicare; 2) the defendant would not have violated federal law by omitting Medicare’s name from the check; and 3) a primary payer may be liable to Medicare if the beneficiary/payee does not reimburse Medicare for any amounts owed within 60 days. In the end, plaintiff prevailed as the parties failed to reach a meeting of the minds with regard to this issue of reimbursing Medicare and the settlement was rejected.

As a practical matter, we know that Medicare prefers that settlement proceeds not be sent to them until the final claim determination (i.e. final demand) has been calculated. The final demand is that conditional payment amount less procurement cost offset allowed by Medicare in that particular case. This calculation cannot be performed until the final demand is requested from Medicare and this cannot be done until the settlement has been finalized. Thus, putting Medicare’s name on the check is not only unnecessary, but impractical.

If you have more questions about Medicare compliance, please feel free to give me a call to discuss further.

My best,
John Cattie

Thursday, April 1, 2010

Providers Time Limit To Bill Medicare

In Missouri, a hospital does not have a valid hospital lien on a wrongful death case. The wrongful death proceeds belong to the heirs. In our case, 120 days passed and the hospital filed a lien which is not being recognized by the liability carrier. The hospital then files a claim against the estate of the deceased. There are no assets in the estate.

What is the time limit for the hospital to bill Medicare? If the hospital admits it its claim against the estate that it doesn't intend to bill Medicare, is that binding? Does it prevent the hospital from later billing Medicare?

Missouri Attorney

Depending on the date of service, providers can have up to 26 months to bill Medicare. The lien is not binding; the provider can remove the lien at any time and then submit a claim to Medicare for a conditional payment. The provider cannot have a lien in place and also submit a claim to Medicare, the lien must be removed first.

If the provider chooses to bill Medicare, then it becomes the Medicare Secondary Payer Recovery Contractors responsibility to recover payment from the settlement for any injury related care that they have paid.

I hope this helps.
Mary Skinner