Presenting a live 90-minute webinar with interactive Q&A Medicare in Personal Injury Claim Settlements: Complying With Reporting Requirements and Satisfying Liens THURSDAY, MARCH 26, 2015 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Jeremy T . Burton, Partner, Lipe Lyons Murphy Nahrstadt & Pontikis , Chicago The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Medicare Trial and Settlement Considerations Jeremy Burton Lipe Lyons Murphy Nahrstadt & Pontikis Ltd. 230 West Monroe Street, Suite 2260 Chicago, IL 606006 (312) 448-6231 jtb@lipelyons.com
Trial and Settlement Considerations Introduction 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 Understanding when there is coverage primary to (1) Medicare, (2) Notifying Medicare when applicable, (3) 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 * Reporting Thresholds January 1, 2012 >$100,000 July 1, 2012 >$50,000 October 1, 2012 >$25,000 January 1, 2013 >$5,000 January 1, 2014 >$2,000 January 1, 2015 >$1,000 Not repayment thresholds 12
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. 13
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 14
Considerations for Plaintiff’s Counsel Pleading Considerations Any operative amended complaint must occur prior to the date of settlement, judgment, award or other payment and must not have the effect of improperly shifting the burden to Medicare by amending the prior complaint to remove any claim for medical damages. Section 111 NGHP User Guide, Chapter III, 1-1. Version 4.5. 15
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. 16
Considerations 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. 17
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. ” 18
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. 19
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. 20
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? 21
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. 22
Considerations for Defense Counsel A completed A-1 form allows an insurer to query the Benefits Coordination & Recovery Center (BCRC) to determine whether an injured party is a Medicare beneficiary. 23
Considerations for Defense Counsel Reporting Make certain your client – insurer or self-insured entity is registered to report. http://www.Section111.cms.hhs.gov If a complaint or discovery lists the date of a plaintiff’s injury or exposure after December 5, 1980, Medicare will require a report. 24
Considerations for Defense Counsel Reporting When a case involves continued exposure, Medicare focuses on the date of last exposure to determine whether the exposure continued after 12/5/80. The application of the 12/5/80 date is specific to a particular defendants. Medicare will assert a recovery claim against exposure after 12/5/80 if liability is claimed, released or effectively released. 25
Considerations for Defense Counsel Reporting When the following requirements are met, Medicare will not assert a recovery claim and reporting is not required . • All exposure ended before 12/5/80 • Exposure has not been claimed in the most recently amended complaint and/or specifically released. • There is no release for exposure after 12/5/80 or whether there is a release it is a broad general release which effectively releases exposure. 26
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