Presenting a 90-Minute Encore Presentation of the Teleconference with Live, Interactive Q&A Medicare in Personal Injury Claim Settlements: Complying with Reporting Requirements and Satisfying Liens TUES DAY, MAY 13, 2014 1pm East ern | 12pm Cent ral | 11am Mount ain | 10am Pacific Today’s faculty features: Jeremy T . Burton, Partner, Lipe Lyons Murphy Nahrstadt & Pontikis , Chicago The audio port ion of t he conference may be accessed via t he t elephone or by using your comput er's speakers. Please refer t o t he inst ruct ions emailed t o regist rant s for addit ional informat ion. If you have any quest ions, please cont act Customer Service at 1-800-926-7926 ext. 10 .
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Jeremy Burton Lipe Lyons Murphy Nahrstadt & Pontikis Ltd. jtb@lipelyons.com
Trial and Settlement Considerations Introduction Getting your cases settled Considerations for Plaintiff’s counsel Considerations for Defense counsel Settlement language Negotiating Settlement with the CMS 6
Introduction Medicare is a government program providing health care. Under Medicare, the government reimburses health care providers for covered care provided. Until 1980, Medicare was the primary payer of all medical costs except in workers’ compensation cases. After 1980, Medicare is always a secondary payer to liability insurance, self-insurance, no-fault insurance, and workers’ compensation insurance. Medicare is also a secondary payer to group health plan coverage in certain situations. 7
Introduction Insurers are not allowed to write policies secondary to Medicare. Such policies would supersede federal law. 8
Introduction Since 1980, Medicare beneficiaries, attorneys, insurers, self-insured entities, third party administrators and their agents have been responsible for (1) understanding when there is coverage primary to Medicare, (2) notifying Medicare when applicable, (3) and for paying appropriately. 9
Introduction The new law, Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA Section) “Adds mandatory reporting requirements with respect to Medicare beneficiaries who have coverage under group health plan arrangements as well as for Medicare beneficiaries who receive settlements, judgments, awards or other payment from liability insurance, no- fault insurance, or workers’ compensation.” 10
Introduction Implementation dates for the new law were originally January 1, 2009 for group health plans to register and July 1, 2009 for liability insurers to register. Insurers must report claims with settlement dates on or after October 1, 2011. In certain cases where an insurer has ongoing responsibility for medical claims, claims arising after January 1, 2010 must be reported. 11
Introduction The new law is designed to enforce the statutes passed in 1980. It does not substantively change the pre-existing Medicare law and statutes. It adds new reporting rules. It includes penalties for noncompliance. 12
Considerations for Plaintiff’s Counsel Intake Considerations Is the client 65 or older? Receiving Social Security Disability? Suffering from end-stage renal disease? Obtain your client’s Medicare identification card Advise Defense counsel 13
Considerations for Plaintiff’s Counsel Lien Concerns Explain to your client that a substantial portion of their settlement will be payable to Medicare. Inform your client that Medicare costs may have a significant impact on your chances to favorably resolve the case. 14
Consideration for Plaintiff’s Counsel Future Medicals Advise your client that Medicare has a right to recover any amount they expend on future medical care. You may want to consider the availability of a special needs trust or other ways to escrow money for future medical costs. 15
Considerations for Plaintiff’s Counsel Future Medicals “You should also be aware that if you do not repay Medicare in full, it may decide to recover any amounts you owe (including accrued interest) from any Social Security or Railroad Retirement benefits to which you might otherwise be entitled, or from future Medicare payments.” 16
Considerations for Plaintiff’s Counsel Penalty Provisions 42 C.F.R. Sect. 411.24(g) Recovery from parties that receive primary payments. CMS has a right of action to recover its payments from any entity, including a beneficiary provider, supplier, physician, attorney, State agency or private insurer that has received a primary payment. 17
Considerations for Plaintiff’s Counsel Penalty Provisions U.S. v. Harris , 2009 WL 891931 (N.D.W.Va) The CMS calculated the amount it was owed, after subtracting amounts for attorney’s fees and costs. The CMS made its demand by letter, and after the statutory time elapsed without appeal the government filed suit. The court granted summary judgment to the government and ordered the Plaintiff’s counsel to pay the judgment plus interest. 18
Considerations for Defense Counsel Discovery Is the plaintiff a beneficiary? Has the plaintiff received benefits? What has the plaintiff done with respect to the lien? 19
Considerations for Defense Counsel Discovery Form A-1 Allows an insurer to determine whether the plaintiff is a Medicare beneficiary. Obtain with interrogatories. Full name, Medicare claim number (HICN), date of birth, social security number and sex. 20
Considerations for Defense Counsel Reporting Make certain your client – insurer or self-insured entity is registered to report. If a complaint or discovery lists the date of a plaintiff’s injury or exposure after December 5, 1980, Medicare will require a report. 21
Considerations for Defense Counsel Reporting Plaintiffs cannot claim a settlement, judgment or award does not contemplate medical liability in an effort to circumvent Medicare, even if a court accedes to such a compromise. 22
Considerations for Defense Counsel Third Party Administrators The new Medicare reporting requirements are complicated enough that the CMS has anticipated that RREs will hire Third-Party Administrators (TPAs) to handle reporting and payment obligations. 42 U.S.C. 1396y(b)(7)&(8) 23
Considerations for Defense Counsel Medicare Penalties Medicare beneficiaries are required to reimburse Medicare within 60 days of receipt of settlement. If Medicare is not reimbursed by the beneficiary, payment becomes the responsibility of the primary payer. 24
Why Report The CMS has a right of action to recover its payments from any entity, including a beneficiary, provider, supplier, physician, attorney, State agency or private insurer that has received a primary payment. 42 CFR Sec. 411.24(g) 25
Why Report If Medicare is not reimbursed as required by paragraph (h) of this section, the primary payer must reimburse Medicare even though it has already reimbursed the beneficiary or other party. 42 CFR Sec. 411.24(i) 26
Why Report The United States can collect double damages and attorneys fees against any entity not paying under the new statute. Furthermore, An applicable plan that fails to comply with the Medicare reporting requirements is subject to a civil money penalty of $1,000 for each day of noncompliance with respect to each claimant. 42 USC Sec. 1395y(b)(8)(E)(i) 27
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