Presenting a live 90-minute webinar with interactive Q&A Workers' Compensation Claims and the Medicare Secondary Payer Act Meeting Reporting Requirements, Satisfying Liens, and Structuring Set-Asides in Settlements TUESDAY, DECEMBER 11, 2012 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: John Cattie, Head, Future Cost of Care Practice, Garretson Group , Charlotte, N.C. Bradford Peterson, Partner, Heyl Royster Voelker & Allen , Urbana, Ill. 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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WORKERS’ COMPENSATION CLAIMS AND MSPA Brad Peterson Heyl, Royster, Voelker & Allen Urbana, Illinois John V. Cattie, Jr. Garretson Resolution Group Charlotte, NC 5
MSPA (1980) • Payment may not be made where • (ii) Payment has been made or can reasonably be expected to be made under a workers’ compensation law or plan . . . or under an automobile or liability policy . . . or no fault insurance. 6
• A primary plan’s responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon the recipient's compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan’s insured, or by other means. 7
A lump sum compromised settlement is deemed to be a workers’ compensation payment for Medicare purposes, even if the settlement agreement stipulates that there is no liability under the workers’ compensation law of plan. 42 CFR § 411.46 8
If a settlement appears to represent an attempt to shift to Medicare the responsibility for payment of medical expenses for the treatment of a work-related condition, the settlement will not be recognized. For example, if the parties to a settlement attempt to maximize the amount of disability benefits paid under workers’ compensation by releasing the workers’ compensation carrier from liability for medical expenses for a particular condition, even though the facts show that the condition is work-related, Medicare will not pay for treatment of that condition. 42 CFR § 411.46 9
CONDITIONAL PAYMENTS • Prior payment by Medicare for injury related condition • Conditional payments search • Rights and responsibilities letter • CMS demand letter • CMS final demand letter 10
Future Medical Treatment MSA’S 11
IDENTIFYING THE ISSUE 12
Classes of Beneficiaries I. Claimant Medicare Eligible II. Claimant To Be Medicare Eligible Within 30 Months (Future Beneficiaries) 13
30 Month Threshold • Factors to be considered: a) Receiving Social Security Disability b) Applied for Social Security Disability Benefits; c) Denied Social Security Disability Benefits but anticipates appealing that decision; d) In the process of appealing and/or re-filing for Social Security Disability Benefits; e) 62 years and 6 months old (i.e., may be eligible for Medicare based upon his/her age within 30 months); or f) End Stage Renal Disease (ESRD) condition but does not yet qualify for Medicare based upon ESRD. 14
Settlement Thresholds • Current Medicare Beneficiary $25,000 • Future Medicare Beneficiary $250,000 • Mandatory or Advisory? • Only Relate to Approval Process 15
Cases That Meet The Threshold • CMS will review the settlement • CMS requires a set-aside of a sufficient amount of money to protect Medicare from having to pay future injury related medical expenses. 16
Medicare Set-Aside Arrangements • Self administered by Claimant • FDIC interest bearing account • Pay only Medicare covered expenses • Annual accounting to Medicare • May be structured 17
When Set-Aside Funds Exhausted Medicare Will Pay Injury Related Medical Expenses 18
CONTRACT LANGUAGE • Acknowledge Medicare’s interest • MSA amount • MSA approved or to be approved • Terms of self-administered MSA • Open medical if MSA rejected 19
CONTRACT LANGUAGE • If no MSA explain why • Record keeping requirements 20
SETTLE NOW – NOT LATER • Settle claim before petitioner reaches 62 ½ years of age 21
SETTLE NOW – APPLY LATER • Petitioner waits to file SSDI claim until after settlement of workers’ compensation claim 22
APPEAL DENIED • Await settlement until pending SSDI appeal is denied 23
NO FUTURE TREATMENT – NO MSA • MSA only where future treatment reasonably anticipated • Caveat: CMS Memo 4/22/03 ‘and settlement only for past medical expense’ 24
ZERO ALLOCATION • Acquire MSA proposal with zero allocation based upon highly disputed facts and substantial compromise 25
SETTLEMENT BELOW MSA THRESHOLDS • Negotiate settlement below $25,000/$250,000 thresholds to avoid time and expense of CMS approval 26
LIABILITY ISSUES FOR PETITIONER (EMPLOYEE) • Double Damages plus interest • Loss of Medicare benefits if Medicare not protected on future medical care (MSA) • Petitioner’s counsel subject to liability as recipient of settlement proceeds Cont’d 27
• Require exhaustion of total settlement amount • SOL 3 years (6 years petitioner’s counsel) 28
LIABILITY ISSUES FOR RESPONDENT • Conditional payments – double damages plus interest • Same penalty for failure to protect Medicare on future medicals • No liability defense counsel as does not receive 3 rd party payment • Professional liability to insurer/client 29
MMSEA Section 111 (Mandatory Insurer Reporting)
MSP Reporting Obligations - What Has Changed? The Medicare, Medicaid and SCHIP Extension Act of 2007 (“MMSEA”) CMS COBC HICN MSA RRE ORM TPOC 31
New Concerns for Defendants: MMSEA Common reactions to MMSEA: Overreaction or reasonable “belt & suspenders”? Not settling/paying without putting Medicare’s name on the check • Not settling/paying unless plaintiff agrees to set up a Medicare Set Aside account • Confusion over who is liable for any future Medicare issues • Defendant paying Medicare directly (and negotiating the reimbursement claim) • Adding overly-strict language to the settling release 32
New Concerns for Defendants: MMSEA Common reactions to MMSEA: Overreaction or reasonable “belt & suspenders”? Not settling/paying without putting Medicare’s name on the check A quick note… • Not settling/paying unless plaintiff agrees to set up a Medicare Set Aside account Each of these topics will be covered in today’s presentation. • Confusion over who is liable for any future Medicare issues For more in-depth analysis as well as practice tips, be sure to review your handout. • Defendant paying Medicare directly (and negotiating the reimbursement claim) • Adding overly-strict language to the settling release 33
MMSEA - 42 U.S.C. §1395y(b)(8) To satisfy MSP REPORTING obligations, Insurers (“RRE’s”) must engage in a two-step process: Step 1: Determine whether a claimant (including an individual whose claim is unresolved) is entitled to Medicare benefits. Step 2: If the claimant is determined to be entitled, submit certain information about the claimant to the Secretary of Health and Human Services 34
MMSEA What must be reported? “Information is to be reported for claims related to liability insurance (including self-insurance), no- fault insurance, and workers’ compensation where the injured party is (or was) a Medicare beneficiary and medicals are claimed and/or released or the settlement, judgment, award, or other payment has the effect of releasing medicals ” * *Per Chapter III, Section 6.5.1 of Version 3.4 of the User Guide 35
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