Liability Claims Management of Medicare Conditional Payments and - - PowerPoint PPT Presentation

Liability Claims Management of Medicare Conditional Payments and Set-Asides

September 20, 2012 1:45 to 3:00

Liability Claims Management of Medicare Conditional Payments and Set-Asides

PRESENTERS Neal S. Meyers, Esq, Partner, Meyers Fozi, LLP, Carlsbad Tom Baber Vice-President, York Risk Services Group, Inc. Moderator Brad Reager Excess Liability Claims Manager, CSAC

• Secondary Payer Exposure-Some basics
• Role of Liability Risk Manager
• Role and Responsibility of Defense Counsel
• Strategies to Attack or Limit Conditional Payments and Set-

Asides

• Updates

Presentation Overview

• Medicare is the Secondary Payer to any “Primary Plan” (includes self-

insured entities).

• Medicare makes “conditional payment” to a Medicare Beneficiary who

has a primary plan.

• Medicare looks to the primary plan to reimburse its conditional

“overpayment”.

• Medicare also looks to future Medicare payments that “can reasonably

be expected to be made” (Liability Set-Aside).

2012 CMS Statement Conditional Payments

2012 CMS Statement Set-Asides

Reporting for liability insurance (including self-insurance) where the Total Payment Obligation to the Claimant (TPOC) for the settlement, judgment, award or other payment started October 1, 2011.

Reporting Liability Claims

Role of Liability Risk Manager

• Establish a System for reporting and managing liability claims as required by CMS

rules and regulations

• In house or vendor
• Establish internal and defense counsel litigation management guidelines
• Initial opinion letter
• Excess carrier-Educate primary self-insurer and inquire early.
• Determine if a claimant is Medicare eligible
• Use the CMS query system to determine if the claimant is in the

Medicare system

• Determine conditional payments
• Implement early response, including communication with plaintiff counsel to

be prepared well before settlement discussions

• Analyze costs of set-aside

• Claimant or spouse worked for at least 10 years (40 quarters)

in Medicare-covered employment and

• Claimant is 65 years or older and a citizen or permanent

resident of the United States; or,

• If not yet 65, a claimant might also qualify for coverage if he or

she has a disability

• r has end stage renal disease (permanent kidney failure

requiring dialysis or transplant)

• Watch out for surprises

Initial Determination: Is the Claimant/Plaintiff Medicare Eligible?

CMS Query System

CMS Query System

• Unlike WC, the SSN and DOB of a claimant is not necessarily

available or readily obtainable

• Methods to Obtain
• CMS model form (See below)
• Obtain a Consent to Release (See below)
• Conduct Discovery
• Pre-litigation
• Post-litigation

Obtaining Query Information

CMS Request Form

https://www.cms.gov/Medicare/Coordination-of- Benefits/MandatoryInsRep/downloads/NGHHICNSSNNGHPForm.pdf

CMS Toolkits (Insurer)

http://www.msprc.info/index.cfm?content=toolkits

CMS Toolkits (Attorney)

Role and Responsibility of Defense Counsel

• Learn this stuff
• Analyze as part of the initial opinion letter
• Help the risk manager obtain the information necessary to perform the

query and conditional payment inquiries

• Targeted Discovery
• Subpoena critical medical records (prescriptions)
• Written Discovery
• Deposition
• Early communication with plaintiff attorney
• Settlement analysis include conditional payment and set-aside

considerations.

• Timing of mediation
• Release

• Attack eligibility: Is the claimant truly eligible?
• Timing: Settle after the injured party undergoes any needed surgery.

The better plaintiff’s condition, the lower the set-aside. But could increase conditional payment obligation.

• Pre-existing conditions: Are the payments related to the subject injury?

If the injured party had previously injured body parts that were injured in the subject injury, cost should only be to return the person to baseline.

• Prescriptions: Major future cost component. Were they already

prescribed or necessary at the time of injury?

How to Attack or Limit the Liability Conditional Payment or Set-Aside Obligation

• Narrow the injury scope: Educate plaintiff’s lawyer about the ICD-9 Code report

and Form Interrogatory section 6.0:

• The “kitchen sink” is not always a good plaintiff strategy
• IDC- 9 codes and CMS reporting
• Hardship waiver:
• Medicare “…may waive recovery, in whole or in part, if the probability of

recovery, or the amount involved, does not warrant pursuit of the claim.” (SSA-632 form)

• 90 to 120 day process
• Fee reduction: Medicare will reduce its recovery to take account of the cost of

procuring judgment or settlement.

• Reduced by the amount of a reasonable contingent fee

How to Attack or Limit the Liability Conditional Payment or Set-Aside Obligation

• Equitable allocations?
• Because WC is a no-fault system, Medicare has not

traditionally taken into account recovery risks, comparative fault or statutory caps

• It has no current liability working rules or regulations (in the

works)

• Mason v. Sebelius, (July 2012-Slip Opinion) 2012 WL 3133801
• Court denied a plaintiff’s motion for reconsideration

seeking to reduce Medicare’s conditional payment claim in proportion to his total settlement recovery

How to Attack or Limit the Liability Conditional Payment and Set-Aside Obligation

• A release between primary plan and plaintiff is ineffective as to

CMS… But it could help

• Release language examples:
• Plaintiff represents they have reported the settlement to

CMS

• Plaintiff covenants and agrees not to disburse funds until

they have satisfied CMS reimbursement demands

• Plaintiff agrees to set-aside funds or covenants that they do

not reasonably anticipate that they will require future Medicare benefits

• Cooperation and indemnity

Releases

• Strengthening Medicare and Repaying Taxpayers Act
• Claimant may request conditional payment amount 120

days before the “reasonably expected date of a settlement, judgment, award or other payment.”

• CMS has 65 days to respond. Claimant submits one more

notice and if CMS does not respond in 30 days, CMS forfeits.

• Directs CMS to establish regulations regarding an efficient

appeals and determination process

• Makes penalties discretionary
• Three year SOL

SMART Act of 2012 (H.R. 1063)

CMS Seeks Public Comment on Liability MSA’s

Advanced Notice of Public Rulemaking (ANPRM), CMS-6047-ANPRM published July 15, 2012:

“We are issuing this advance notice of proposed rulemaking (ANPRM) to solicit public comments on standardized options that beneficiaries and their attorneys or

• ther representatives will be able to use to resolve MSP obligations related to

settlements, judgments, awards, or other payments (hereinafter, for ease of reference in this document and unless otherwise indicated, “settlement(s)”) involving future medical care while protecting Medicare's interest.”

CMS proposes seven options https://www.federalregister.gov/articles/2012/06/15/2012-14678/medicare-program- medicare-secondary-payer-and-future-medicals#p-21

• Establish an internal system to manage conditional payments and

set-asides

• Begin the process early when a Medicare beneficiary is identified,

not when the case is settled, or worse, after the case is settled

• Work with defense counsel to minimize the obligations and “set

the table” for settlement

• Calendar regular CMS update queries
• Work with plaintiff as necessary to avoid settlement roadblocks in

complex cases

Bottom Line to Addressing Conditional Payments and LMSA’s

QUESTIONS