Monday, April 18, 2011

MSA Guidelines In Liability Cases

My client fell in December 2007 and had to undergo a total knee replacement in 2008.  All medical coverage provided through her employer's group plan; with a 3rd party lien of $55k.  My client retires in June 2009 at age of 72. The client's primary insurance is now Medicare.  Should we go through a CMS Review to determine whether or not a MSA will be required for questionable future follow-up care?

Hawaii Attorney

Medicare's Part with Social Security Claims

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

Minnesota Attorney

Medicare Compliance in Motor Vehicle Accidents

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

Medicare Set Aside Arrangements Terms

My client is a Medicare beneficiary who suffered a neck injury in a Motor Vehicle Accident. Their auto insurance has paid for treatment to neck thus far. Adverse driver policy limits are $25,000 and case will probably settle for less than that. It is unknown if he or she will need any future neck treatment. How do you recommend we deal with MSA issues in such a small case? Also, can you direct me to a site which shows how to establish an MSA? Wyoming Attorney

Responsibilities Of Defense Counsel In Liability Settlement Involving Medicare

Thank you for contacting the Garretson Firm Resolution Group, Inc. ("GFRG") with your MMSEA question. Background: Misunderstanding related to the implementation of the MMSEA has made parties cautious about settling claims, even those which they want to settle. Section 111 reporting requirements have effectively bottlenecked the settlement community. As the standard bearer in the Medicare compliance community, parties on both sides of the negotiating table constantly ask us the following question: “How can we settle claims and still be Medicare compliant in light of the MMSEA?” The reporting delay, while providing the RRE more time to ready itself, does not provide comfort with regard to exposure to Medicare. The insurer/self-insured is still concerned about a few primary issues: 1) how do I ensure Medicare is paid back for conditional payments made from the date of injury to the date of settlement; 2) how do I ensure Medicare’s future interests are properly considered and protected; and 3) how can I avoid the $1,000 per day, per claimant penalty for non-compliance under MMSEA? Likewise, the claimant also has concerns due to MMSEA, such as: 1) what is the extent of my Medicare compliance obligations in the MMSEA world; and 2) how can I ensure that the defense will pay settlement proceeds in a timely manner once a claim is settled? Understanding that claims being settled today, for Medicare entitled injured parties, will have to eventually be reported, we offer the following advice. This settlement solution has dual intentions: 1) to provide the insurer with the knowledge that all Medicare compliance obligations are being handled in a compliant manner such that it will not be liable to Medicare post settlement; and 2) to allow the claimant’s attorney to receive settlement proceeds in a timely manner once the parties have agreed to the terms of the release. The settlement solution essentially creates a series of affirmative obligations on both sides as conditions precedent and conditions subsequent to settlement. Conditional Payments: Reimbursing Medicare for conditional payments (those that were made from date of injury to date of settlement) is a claimant obligation; however, CMS can come back to the payer for reimbursement of conditional payments if they are not satisfied by the injured party. Action steps include the following: •Claimant should open a tort recovery record with Medicare and request a conditional payment listing (“CPL”); and bring evidence of that to the settlement table •Indemnification language included in settlement agreement to protect the defense •Settlement occurs and then the claimant submits the settlement details to CMS along with its procurement costs (case costs and expenses) and requests a final demand. •Defense pays the settlement to the claimant’s attorney with the agreement from the attorney that the net funds will not be paid to the claimant until the reimbursement is completed. •Final demand is received from CMS. •Once reimbursed, CMS will provide the claimant with a copy of the final demand and proof that the reimbursement claim has been satisfied. Obviously, since reimbursing CMS is an affirmative obligation on the claimant, the claimant requires settlement proceeds to handle its obligation in a compliant manner. Defense may be hesitant about disbursing settlement proceeds to the claimant prior to knowing that CMS has been reimbursed for conditional payments made date of injury to date of settlement. The above steps allow CMS to be reimbursed promptly, but also afford the defense a high level of comfort knowing that Medicare compliance obligations linked to settling the claims are being handled in a compliant manner. Future Cost of Care Satisfaction of Medicare’s future interests is a topic of great discussion currently in the settlement community; however, that discussion is misguided. Insurers are being led astray by certain entities attempting to apply the current law and guidance regarding Medicare Set-aside Arrangements (“MSAs”) to the liability context. As it currently stands, the MSA is a tool used in workers’ compensation settlements to protect Medicare’s future interest. All currently enacted laws and guidance regarding the use of MSAs is specific to the workers’ compensation arena, and there is no currently enacted law which mandates the use of MSAs in a liability settlement. In fact, there is not even a statutory definition of the term ‘MSA’ or ‘Medicare Set-aside Arrangement’ at this point. In the absence of any currently enacted law or guidance specific to the use of MSAs in a liability settlement, MSAs are appropriate when the following fact pattern exists – that is, a definitive allocation to future medical expenses in the settlement release or a line item for future medical expenses in a jury verdict form, plus a permanent burden shift to Medicare. Even if MSAs were appropriate in liability settlements today, the insurer/defense do not need to play a role on setting up the MSA. Under currently enacted law, there is no legal liability on the defendant for failing to do so. The current law only provides double damages exposure to an insurer where conditional payment reimbursement obligations exist but were not satisfied. (See 42 U.S.C. §1395y(b)(2)(B)). That responsibility is, and always has been on the Medicare beneficiary’s shoulders (where applicable). I have included a link to our white paper for your reference. Please let me know if you have any questions or need anything further. My best, Marlene Wilson, ARM