Medicare, Medicaid and Private Health Insurer Liens in Personal - - PowerPoint PPT Presentation

Medicare, Medicaid and Private Health Insurer Liens in Personal Injury Cases

Negotiating Healthcare Liens or Claims for Reimbursement and Maximizing Settlement Awards

Today’s faculty features:

1pm East ern | 12pm Cent ral | 11am Mount ain | 10am Pacific

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TUES DAY, AUGUS T 26, 2014

Presenting a live 90-minute webinar with interactive Q&A

Christine A. Alsop, Founder, The Elder & Disability Advocacy Firm of Christine A. Alsop, S

• t. Louis

Andrew D. Myers, Attorney, Law Offices of Andrew D. Myers, North Andover, Mass.

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CHRIST I NE

• A. AL

SOP T HE E L DE R & DISABI L I T Y ADVOCACY F IRM OF CHRIST I NE

• A. AL

SOP 6654 CHIPPE WA AVE NUE ST . L OUIS, MISSOURI 63109 CAL SOP@ AL SOPE L DE RL AW.COM 314-644-3200

Me dic a r e , Me dic aid a nd Pr iva te He a lth Insur e r L ie ns in Pe r sona l Injur y Case s

Aug ust 26, 2014

6

A Prime r On Pub lic Be ne fits:

Ne e ds Base d Be ne fits Be ne fits Base d on E ntitle me nt

Ca sh Assista nc e SSI (Supple me nta l Se c urity I nc o me ) SSD (So c ia l Se c urity Disa b ility) CDB (Childho o d Disa b ility Be ne fits) Me dic a l Assista nc e Me dic a id Me dic a re

7

Supple me nta l Se c urity I nc o me

 A me a ns-b a se d fe de ra l pro g ra m tha t pro vide s

inc o me thro ug h a c a sh a ssista nc e g ra nt to c e rta in

a g e d, blind, a nd pe rsons with disa bilitie s;

 Ad ministe re d b y the So c ia l Se c urity Ad ministra tio n

(SSA).

 L

a w is fo und a t 42 U.S.C. § 1381 e t se q . Re g ula tio ns a re fo und in T itle 20 Pa rt 416 o f the Co de o f F e de ra l Re g ula tio ns (CF R).

 SSA Pro g ra m Ope ra ting Ma nua l Syste m (POMS), a nd

a ltho ug h no t le g a lly b inding , POMS c a rrie s g re a t we ig ht a s fa r a s a g e nc y inte rpre ta tio n o f the fe de ra l la w.

 SSI

se c tio ns o f the POMS sta rt with “SI .”

 Se e : http://www.ssa.g o v/.

8

F ina nc ia l Re q uire me nts

 As a g e ne ra l rule , a nything o f va lue

re c e ive d during the mo nth is c o nside re d inc o me fo r the mo nth re c e ive d a nd a re so urc e d a s o f the first da y o f the fo llo wing mo nth.

 20 C.F

.R. §416.1102

 Importa nt for se ttle me nt purpose s.

9

Ba sic s o f SSI E lig ib ility Re so urc e s

 I

f a n SSI b e ne fic ia ry re c e ive s a t le a st $1 o f SSI , the b e ne fic ia ry the n re c e ive s full sc o pe fre e Me dic a id a uto ma tic a lly.

 11 State s Have Diffe r

e nt Cr ite r ia F

• r

Me dic aid E ligibility:

Co nne c tic ut Ha wa ii I llino is Ne w Ha mpshire Minne so ta Misso uri I ndia na No rth Da ko ta Okla ho ma Ohio Virg inia

10

So c ia l Se c urity Disa b ility I nsura nc e (SSDI )

So c ia l Se c urity Disa b ility I nsura nc e is a na tio na l pro g ra m fo r injure d wo rke rs tha t ha ve pa id the re q uisite numb e r o f wo rk c re dits into the So c ia l Se c urity Syste m.

11

So c ia l Se c urity Disa b ility I nsura nc e (SSDI )

 T

he mo nthly Sub sta ntia l Ga inful Ac tivity (SGA) a mo unt fo r sta tuto rily b lind individua ls fo r 2014 is $1,800.

 F

• r no n-b lind individua ls, the mo nthly SGA

a mo unt fo r 2014 is $1070

12

So c ia l Se c urity Disa b ility I nsura nc e (SSDI )

 SSDI

ha s no inc o me o r re so urc e limits. An SSDI re c ipie nt c o uld win the lo tte ry a nd re ma in e lig ib le

 E

a rne d inc o me ma y c a use ine lig ib ility fo r b e ne fits

13

So c ia l Se c urity E lig ib ility

 So c ia l Se c urity’ s we b site to de te rmine e lig ib ility

• f a pa rtic ipa nt:

 www.so c ia lse c urity.g o v/ mya c c o unt.

14

Me dic a re v. Me dic a id

 Me dic a re : no t te ste d b y inc o me o r re so urc e s;  Me dic a id is a sha re d sta te -fe de ra l pro g ra m, pa id

pa rt b y b o th e ntitie s a nd a d ministe re d b y sta te a g e nc ie s with fe de ra l o ve rsig ht;

 Me dic a re is e ntire ly a fe de ra l pro g ra m a nd b e ne fits

a re pa id e ntire ly fro m fe de ra l re so urc e s; Bo th pro g ra ms a re o ve rse e n b y the Ce nte rs for

Me dic a re a nd Me dic a id Se rvic e s (CMS) fo rme rly

kno wn a s the He a lth Ca re F ina nc ing Administra tio n (HCFA) a c o mpo ne nt o f Unite d Sta te s De pa rtme nt

• f He a lth a nd Huma n Se rvic e s (HHS).

GOVE RNME NT BE NE F I T S AND PE RSONAL I NJURY SE T T L E ME NT :

WHAT YOU MUST K NOW

15

16

I ntro duc tio n

 K

no w yo ur c lie nt

 K

no w a nd unde rsta nd the b e ne fits tha t the c lie nt re c e ive s:

Me dic a re SSDI SSI F

• o d Sta mps

Me dic a id Se c tio n 8

17

Who is e ntitle d to Me dic a re ?

 A pe rso n 65 ye a rs o f a g e o r o lde r;  A disa b le d pe rso n;  A pe rso n (o r c hild) with e nd sta g e re na l dise a se .  I

ndividua l must b e insure d; must ha ve suffic ie nt q ua rte rs o f c o ve ra g e

 I

ndividua l who is a pplying o n b a sis o f a g e who is no t insure d ma y pa y into the syste m

 I

ndividua l who a pplie s fo r SSDI is e lig ib le fo r Me dic a re within 24 mo nths o f e lig ib ility

 Co mpa ssio na te Dise a se s

18

Me dic a re Se c o nda ry Pa ye r Ac t (the MSP)

Me dic a re wa s c re a te d in 1965 Me dic a re Se c o nda ry Pa ye r Ac t

wa s c re a te d in 1980

19

T he L a w

42 U.S.C. §1395y 42 C.F

.R. §§ 411.20 e t.se q .

Me dic a re is a se c o nda ry pa ye r

20

Se c tio n 1862(b )(2)(A)(ii) 42 U.S.C. §1395y

Pre c lude s Me dic a re pa yme nt fo r

se rvic e s to the e xte nt tha t pa yme nt ha s b e e n ma de o r c a n re a so na b ly b e e xpe c te d to b e ma de pro mptly unde r lia b ility insura nc e (a s de fine d in 42 CF R 411.50)

21

T hre e Co mplia nc e Pa rts; T he Pre se nt, the Pa st a nd the F uture

 I

n e ve ry lia b ility se ttle me nt invo lving a Me dic a re b e ne fic ia ry, the pa rtie s, inc luding a ny g ro up he a lth pla n o r lia b ility insure r, no w ha s thre e distinc t o b lig a tio ns:

1) re po rt the se ttle me nt to CMS (the pre se nt); 2) re so lve a ny c o nditio na l pa yme nts (the

pa st)a nd

3) pro vide fo r pa yme nt o f future me dic a l

e xpe nse s a s a te rm o f the se ttle me nt, ta king into c o nside ra tio n Me dic a re ’ s inte re sts (the future ).

 E

a c h o b lig a tio n c a rrie s its o wn pe na lty fo r fa ilure to fulfill it.

22

Me dic a re , Me dic a id a nd

SCHI P E xte nsio n Ac t o f 2007 (MMSE A)

 E

nfo rc e s Me dic a re ’ s b a sic rig ht o f re c o ve ry a nd to e nsure tha t Me dic a re se rve s a s a se c o nda ry pa ye r, whe ne ve r po ssib le .

 Se c tio n 111: re po rting re q uire me nts

23

CMS

 CMS is the a g e nc y re spo nsib le fo r

e nfo rc e me nt o f the MSP

 T

he We b site : http:/ / www.c ms.g o v/

 CMS is sho rt fo r the “Ce nte rs fo r Me dic a re &

Me dic a id Se rvic e s”

 CMS is a sub -a g e nc y unde r T

he U.S. De pa rtme nt o f He a lth a nd Huma n Se rvic e s ("HHS“)

24

T HE CONDI T I ONAL PAYME NT PROCE SS OF ME DI CARE AND T HE NE W SMART ACT

25

Co o rdina tio n o f Be ne fits Co ntra c to r (COBC)

 CMS ha s c o nso lida te d a ll a c tivitie s in

suppo rt o f the c o lle c tio n, ma na g e me nt, a nd re po rting o f o the r insura nc e c o ve ra g e

• f Me dic a re b e ne fic ia rie s unde r a sing le

e ntity, the Co o rdina tio n o f Be ne fits Co ntra c to r (COBC).

 T

he COBC is b a sic a lly the info rma tio n g a the re r to c o o rdina te b e ne fits o f Me dic a re re c ipie nts

26

MSP Re c o ve ry Co ntra c to r

 CMS

c o ntra c te d with the MSP Re c o ve ry Co ntra c to r (MSPRC) in 2006 to c o nso lida te a ll func tio ns re la te d to MSP re c o ve ry. I n 2014 the c o ntra c to r na me wa s c ha ng e d to Be ne fits Co o rdina to r & Re c o ve ry Co ntra c to r (BCRC).

 T

he BCRC ma na g e s a ll MSP a fte r the COBC c o mple te s a re c o rd.

 Onc e the file is tra nsfe rre d fro m the COBC to the

BCRC, the c la ima nt will re c e ive a “rig hts a nd re spo nsib ilitie s” le tte r (RAR) sig ne d b y the BCRC.

27

Re po rting Re q uire me nt

 42 USC 1395y(b )(8) a nd 42 C.F

.R. Se c tio n 411.25

 All se ttle me nts, judg me nts, a wa rds o r o the r

pa yme nts re so lving me dic a l fo r a Me dic a re Be ne fic ia ry c la ima nt must b e re po rte d

 Re po rte d b y Pa ye r—no t Cla ima nt o r Pla intiff  F

a ilure to g ive time ly no tic e o f a se ttle me nt to Me dic a re re sults in a c ivil mo ne y pe na lty o f “$1000 fo r e a c h da y o f no nc o mplia nc e with re spe c t to e a c h c la ima nt.” 42 U.S.C. 1395y (b )(8)(E )(i) (But Se e SMART Ac t)

28

Wha t T rig g e rs Re po rting ?

 T

he RRE must re po rt a T

• ta l Pa yme nt Oblig a tion to the

Cla ima nt (T POC) whic h g e ne ra lly re pre se nt a ‘ o ne -

time ’ o r ‘ lump sum’ pa yme nt o f a se ttle me nt, judg me nt, a wa rd , o r o the r pa yme nt inte nde d to re so lve o r pa rtia lly re so lve a c la im. T he RRE must a lso re po rt no -fa ult/ Me d Pa y/ PI P a nd wo rke rs’ c o mpe nsa tio n c la ims.

 Ma nda tory re porting is re quire d whe n the T

POC da te a nd se ttle me nt a mount a re a s follows:

 Ove r $100,000 – On o r a fte r Oc to b e r 1, 2011  Ove r $50,000 – On o r a fte r April 1, 2012  Ove r $25,000 – On o r a fte r July 1, 2012  Ove r $5,000 – On o r a fte r Oc to b e r 1, 2012  Ove r $2,000 – On o r a fte r Oc to b e r 1, 2013  Ove r $300 – On o r a fte r Oc to b e r 1, 2014

29

Se c tio n 111 a nd Disc o ve ry

 Se c tio n 111 re q uire d e xte nsive info rma tio n disc lo sure ,

inc luding a c lie nt’ s SSN fo r the de fe nda nt to re po rt the c la im

 CMS ha s no t b e e n willing to a c c e pt le ss tha n c o mple te

info rma tio n

 I

nfo rma tio n so ug ht is g e ne ra lly no t the type e xc ha ng e d, e spe c ia lly in simple se ttle me nts

 Co urt c o mpe lle d disc lo sure o f SSN re a so na b le in lig ht

• f de fe nda nt’ s re po rting re q uire me nts:

 Se ge r

• v. T

ank Conne c tion, L L C, Do c ke t No .: 8:08CV75,

US Dist. L E XI S 49013, D.Ne b . (Apr. 22, 2010)

 Hac kle y v. Gar

• fano, 2010 Co nn. Supe r. L

E XI S 1669 (Sup.Ct. July 1, 2010)

30

Co nditio na l Pa yme nts

• Me dic a re ha s the rig ht to re c o ve r a ny

c o nditio na l pa yme nt ma de a g a inst the se ttle me nt pro c e e ds

• f

a Wo rke r’ s Co mpe nsa tio n

• r

third-pa rty lia b ility c a se .

• So me time s re fe rre d to a s a “supe r lie n”

b e c a use o f the b ro a d po we r CMS ha s

• F

ro m the da te o f inc ide nt to the da te o f se ttle me nt

31

Wha t a re Co nditio na l Pa yme nts?

 Pa yme nts b y Me dic a re whe n a no the r pa ye r is re spo nsib le .  E

xa mple s:

 Whe re the c la m is de nie d b y the c a rrie r o r se lf-insure d;  T

he c a rrie r o r se lf-insure d do e s no t pa y pro mptly;

 T

he pa tie nt e le c ts to pursue una utho rize d tre a tme nt;

 T

he c la ima nt fa ils to file a c la im o r fa ils to no tify CMS o f the e xiste nc e o f o the r insura nc e ;

 T

he re is a lo ng de la y b e twe e n the filing o f the c la im a nd the c o urt pro c e e ding .

32

 ST

E P #1:

Pho ne the Co o rd ina tio n

• f

Be ne fits Co o rdina to r. (COBC) 1-800-999-1118. Be pre pa re d to g ive the m the fo llo wing info rma tio n.

 T

he c lie nt’ s/ b e ne fic ia ry’ s na me .

 T

he He a lth I nsura nc e Cla im Numb e r (HI CN). T ypic a lly this is the c lie nt’ s So c ia l Se c urity Numb e r, plus a n a lpha c ha ra c te r.

 T

he g e nde r a nd da te o f b irth.

 T

he c lie nt’ s/ b e ne fic ia ry’ s a ddre ss a nd pho ne numb e r.

 T

he da te o f the inc ide nt/ a c c ide nt.

 A de sc riptio n o f the injury b y b o dy pa rt. I

f po ssib le , the y wo uld pre fe r I CD-9 c o de s.

 T

he type o f c la im- fo r e xa mple , a lia b ility insura nc e c la im.

 Yo ur a tto rne y a nd firm na me a lo ng with yo ur a ddre ss a nd pho ne

numb e r.

T he Co nditio na l Pa yme nt Pro c e ss (b y T e le pho ne ) Co nt.

33

 ST

E P #2: Pro o f o f Re pre se nta tio n to Me dic a re Se c o nda ry

Pa ye r (MSPRC) lo c a te d in Okla ho ma City: 1-866-677-7220 Use the ir PROOF OF RE PRE SE NT AT I ON fo rm.

 Che c k the b o x fo r a tto rne y.  Pro vide the a tto rne y na me , yo ur re la tio nship a s a n

a tto rne y, the firm na me a nd a ddre ss a nd pho ne numb e r.

 F

ill in the c lie nt’ s na me a nd HI CN a nd the da te o f the inc ide nt.

 Ha ve this sig ne d b y the c lie nt a nd da te d.  F

a x this to the m a t 405-869-3309.

 ST

E P #3: T

he y will no w se nd yo u a RI GHT S AND RE SPONSI BI L I T I E S L E T T E

• R. T

his will b e a sta nda rd fo rm b ut with the pa rtic ula rs re g a rding yo ur c la im. Yo u sho uld the n pre pa re a tic kle r fo r 65 da ys la te r in o rde r to mo nito r the pro c e ss a s sho wn b e lo w.

T he Co nditio na l Pa yme nt Pro c e ss (b y T e le pho ne ) Co nt.

34

 ST

E P #4: I

n re spo nse to the RI GHT S AND RE SPONSI BL I T I E S L E T T E R, yo u ne e d to re spo nd a nd se nd the fo llo wing :

Se nd a c o py o f yo ur re ta ine r a g re e me nt. Be

sure it is fully fille d o ut a nd sig ne d b y b o th the c lie nt a nd b y yo ur firm.

Pla c e o n the to p o f the re ta ine r a g re e me nt

the c lie nt’ s na me a nd the HI CN numb e r.

Se nd the m the na me , a ddre ss a nd te le pho ne

numb e r o f the insure r a nd a lso the a djuste r.

T he Co nditio na l Pa yme nt Pro c e ss (b y T e le pho ne ) Co nt.

35



ST E P #5: 65 da ys fro m the da te o f the RI

GHT S AND RE SPONSI BI L I T I E S L E T T E R, the y will a uto ma tic a lly se nd yo u a CONDI T I ONAL PAYME NT L E T T E R (CPL ). Ho we ve r, if it ha s no t b e e n re c e ive d b y this time , yo u ma y wa nt to c a ll a nd inq uire . (Do no t c a ll in le ss tha n 65 da ys; if yo u do , yo ur re q ue st will put yo u a t the e nd o f the line . E a c h c a ll is c o nside re d a ne w re q ue st a nd , a s suc h, the time re sta rts.) At this time , the y po st a ll c o nditio na l pa yme nts info rma tio n und e r the “MyMSP” ta b

• f

the www.MyMe dic a re .g o v we b site , whic h is upda te d we e kly. T hus, yo u c a n tra c k it the re a fte r whe ne ve r ne c e ssa ry.



I t is a t this po int tha t the y will ha ve a lso se nt yo u a CORRE SPONDE NCE COVE R SHE E T whic h inc lude s pre -printe d info rma tio n o n yo ur c a se a nd will ha ve b o xe s to c he c k. T his will fa c ilita te a ll ma tte rs with the m.



NOT E : I f the tre a ting pro vide r ha s tro ub le with re imb urse me nt b y Me dic a re , ha ve the m c he c k the b o x fo r a c o nditio na l pa yme nt. T his will fa c ilita te the ir g e tting pa id b y Me dic a re .

T he Co nditio na l Pa yme nt Pro c e ss (b y T e le pho ne ) Co nt.

36



ST E P #6: Re vie w the CPL

a nd se nd b a c k a le tte r to BCRC if so me pa yme nts a re no t re la te d to the injury. It will he lp if yo u ha ve pre vio usly se nt a de sc riptio n o f the injury a nd inc lude d the ICD9 c o de s.



I f yo u o b je c t, this will trig g e r a no the r 65 da y wa it fo r a NEW CONDI T I ONAL PAYME NT L E T T E

• R. Onc e a g a in, do no t c a ll in le ss tha n

65 da ys b ut the re a fte r, a c a ll will e sc a la te the re vie w.



ST E P #7: One se ttle me nt is re a c he d, se nd a le tte r to MSPRC with a ll

the pe rtine nt info rma tio n. Use the ir F INAL SE T T L E ME NT DE T AI L DOCUME NT .

 T

he da te o f se ttle me nt o r judg me nt.

 T

he a mo unt o f the se ttle me nt o r judg me nt.

 An ite mize d sta te me nt o f the a tto rne y fe e s a nd c o sts.  Whe the r o r no t a ny PIP o r Me d-pa y wa s a pplic a b le .  I

f the c a se ha s b e e n dro ppe d, o r lo st, se nd the m the do c ume nta tio n so tha t the y c a n c lo se the ir file .

T he Co nditio na l Pa yme nt Pro c e ss (b y T e le pho ne ) Co nt.

37

T he Co nditio na l Pa yme nt Pro c e ss (b y T e le pho ne ) Co nt.

 Me dic a re pa ys its pro po rtio na te sha re o f a tto rne y fe e s a nd

c o sts a nd the y will ma ke tha t c a lc ula tio n.

 ST

E P #8: T

he y will no w se nd yo u a fina l de ma nd. I t will ha ve a n ite miza tio n o f the b ills the y pa id. Onc e a g a in, c a re fully c he c k to b e sure tha t the se a re a c c ide nt re la te d b ills. I f no t, yo u must file a le tte r c o nte sting tha t fa c t.

 Yo u ha ve 60 da ys within whic h to pa y the ir de ma nd. Yo u

ha ve to pa y the de ma nd e ve n if yo u a re c o nte sting it. Yo u pa y the de ma nd, a nd file the c o nte st. T he y will re imb urse yo u whe n yo u win. I f yo u fa il to pa y within 60 da ys, the y will c ha rg e inte re st a nd pe na ltie s.

38

Ne w Auto ma te d Numb e r

(866- 677-7220)

What you will ne e d:

 Ca se I

de ntific a tio n Numb e r (a s fo und o n the Rig hts a nd Re spo nsib ilitie s le tte r)

 Da te o f L

• ss

 Be ne fic ia ry's Da te o f Birth  L

a st fo ur dig its o f the SSN

 F

irst fo ur le tte rs o f b e ne fic ia ry's la st na me

 Me dic a re Numb e r

39

I CD9 Co de s

 Co nditio na l pa yme nts sho uld o nly b e ma de to tho se b ills

re la te d to the injury

 Circ le unre la te d b ills a nd pro vide b a c k-up do c ume nta tio n  CMS will de te rmine the a mo unt o we d; re spo nse must b e file d

within 60 da ys

 T

he o ptio ns pe rmitte d in the a nswe r a re a s fo llo ws:

• 1. E

ve rything c la ime d is o we d a nd a c he c k is disb urse d fo r the c la ime d a mo unt;

• 2. So me ite ms c la ime d a re o we d, while o the rs a re no t;

3. All c la ime d ite ms a re de nie d a nd the re will b e no c he c k e nc lo se d fo r re imb urse me nt.

40

E xa mple fo r Ha ndling a Co nditio na l Pa yme nt (Po rta l)

1.

Whe n yo u sig n up the c lie nt g e t a c o py o f the ir Me dic a re c a rd, Me dic a id c a rd a nd he a lth insura nc e c a rds (prio r insura nc e a t time o f a c c ide nt? ).

2.

Go to www.c ms.g o v. Clic k o n “Me dic a re ”-the n “Atto rne y Se rvic e s.”

3.

Use the we b site fo rms-e ve n if yo u ha ve to a tta c h info rma tio n.

4.

Print o ut mo de l Pro o f o f Re pre se nta tio n & Co nse nt to Re le a se F

• rms-c lie nt sig ns.

41

• 5. Re po rt c a se (dire c tio ns in “Re po rting a Ca se ” in

Atto rne y Se rvic e s’ ta b ).

• 6. Ma il pro o f o f re pre se nta tio n a nd c o nse nt to

re le a se fo rms to BCRC (use Co rre spo nde nc e Co ve r She e t).

• 7. Go to www.myme dic a re .g o v a nd c re a te a n

a c c o unt fo r c lie nt so yo u c a n a c c e ss c la im info rma tio n with c lie nt’ s pe rmissio n.

Co nditio na l Pa yme nt E xa mple

42

Co nditio na l Pa yme nt E xa mple

• 8. K

e e p c he c king myme dic a re .g o v fo r c lie nt info rma tio n, o r c a ll a uto ma te d numb e r to c he c k sta tus o f c o nditio na l pa yme nts.

• 9. Re vie w fo r a ny no n-injury re la te d e xpe nse s o n

c o nditio na l pa yme nt she e t. Pre pa re do c ume nta tio n to c o rre c t no n-injury re la te d e xpe nse s.

• 10. F

ina l Se ttle me nt De ta il Do c ume nt to MSPRC- a tta c h unsig ne d se ttle me nt sta te me nt.

• 11. Wa it 4-6 we e ks o r mo re .

43

Hadde n v. Unite d State s of Ame r ic a, 661 F . 3d 291 (6th Cir . 2011)

 Sixth Circ uit fo und in fa vo r o f the g o ve rnme nt,

ho lding tha t the MSP do e s no t pro vide fo r a ppo rtio nme nt a nd Me dic a re ’ s c la im fo r c o nditio na l pa yme nts do e s no t ne e d to b e e q uita b ly re duc e d b y the a mo unt re c o ve re d.

 Me dic a re ’ s rig ht to re imb urse me nt is sta tuto ry, no t

e q uita b le . As a re sult, the y do no t c o nside r fa c to rs tha t limite d the re c o ve ry, suc h a s insuffic ie nt insura nc e c o ve ra g e , c o mpa ra tive ne g lig e nc e , e tc .

 Se e a lso : We inste in v. Se b e lius, 2013 WL

1187052 (E D PA, 2-13-2013).

44

F ar me r s Insur anc e v. F

• r

ke y, 764 F . Supp. 2d 1205, U.S. Dist. Ct. D. NV, De c . 29, 2010

 Me dic a re ma y se e k re imb urse me nt via dire c t a c tio n o r

thro ug h sub ro g a tio n. Sub ro g a tio n is limite d to c e rta in c irc umsta nc e s-a nd b a sic a lly o nly whe re a n individua l o r e ntity is e ntitle d to pa yme nt fo r a n ite m o r se rvic e whic h Me dic a re pa id.

 Mo st Me dic a re re imb urse me nt a c tio ns a re no t sub je c t to

a ppo rtio nme nt unde r sta te sub ro g a tio n la ws b e c a use the y a re dire c tio n a c tio ns.

 Whe n e xe rc ising the De pa rtme nt’ s rig ht o f dire c tio n a c tio n,

a ppo rtio nme nt do e s no t a pply, a nd Me dic a re ’ s rig ht to re c o ve r is supe rio r to individua l c la ims a g a inst insura nc e .

45

Pro c ure me nt Co sts

 Me dic a re re duc e s its re c o ve ry a uto ma tic a lly to ta ke into

a c c o unt the c o st

• f

pro c uring the judg me nt

• r

se ttle me nt.

 T

he c o sts inc lude a tto rne y’ s fe e s, e xpe rt witne ss fe e s a nd c o urt c o sts. I n o rde r to pro pe rly c a lc ula te this re duc tio n, the c la ima nt’ s a tto rne y must pro vide a c o py o f the fe e a g re e me nt a lo ng with do c ume nta tio n o f c o sts inc urre d during litig a tio n. 42 C.F .R. 411.37.

46

Har

• v. Se blius, 789 F

. Supp. 1179 (U.S. Dis. Ct. AZ May 9, 2011)

 T

he Co urt fo und tha t de ma nding c o nditio na l pa yme nt re imb urse me nt within 60 da ys a g a inst b e ne fic ia rie s who we re disputing the c la im wa s irra tio na l a nd inc o nsiste nt with the sta tuto ry sc he me pro viding wa ive r a nd a ppe a l rig hts.

47

CONRADL ASKA v. GE NE RAL CASUAL T Y COMPANY OF WISCONSIN Appe a l No. 2010AP2410 COURT OF APPE AL S OF WISCONSIN, DIST RICT F OUR 2013 Wisc . App. L E XIS 234 Ma rc h 14, 2013, de c ide d

 Ho spita l c a nno t b e fo rc e d to a c c e pt Me dic a re c o nditio na l

pa yme nts.

 A pro vide r ma y ho ld o ut fo r the ir full fe e a nd a sse rt a lie n unde r

sta te la w a g a inst a ny insura nc e p ro c e e ds, o r a c c e pt a Me dic a re c o nditio na l pa yme nt a t the Me dic a re fe e sc he dule , typic a lly the lo we st ra te a c c e pte d.

 I

f the pro vide r do e s no t e le c t to b ill Me dic a re within a ye a r, the n it c a n o nly re c o ve r a g a inst insura nc e pro c e e ds a nd if no insura nc e pa yme nt is e ve r ma de o r the jury fa vo rs the de fe nda nts, the pro vide r will g e t pa id no thing .

 I

t is a g a mb le a nd the d e c isio n is the pro vide rs a lo ne to ma ke . T he Me dic a re b e ne fic ia ry ha s no sa y in the ma tte r.

48

Ha rdship

 Afte r se ttle me nt, the pla intiff c a n a pply fo r a

ha rdship wa ive r to furthe r re duc e o r e limina te the lie n. Me dic a re c a n issue a full o r pa rtia l wa ive r, o r de ny the wa ive r c o mple te ly. T he sta nda rd tha t is a dhe re d to is whe the r re c o ve ry wo uld b e a g a inst e q uity a nd g o o d c o nsc ie nc e . T

• de te rmine this, the

fo llo wing fa c to rs ma y b e c o nside re d:

 T

he de g re e to whic h the b e ne fic ia ry c o ntrib ute d to c a using the o ve rpa yme nt;

 T

he de g re e to whic h Me dic a re a nd/ o r its c o ntra c to rs c o ntrib ute d to c a using the

• ve rpa yme nt;

49

Ha rdship (c o n’ d)

 T

he d e g re e to whic h re c o ve ry o r a djustme nt wo uld c a use undue ha rdship fo r the b e ne fic ia ry;

 Whe the r

the b e ne fic ia ry wo uld b e unjustly e nric he d b y a wa ive r o f a djustme nt o f re c o ve ry;

 Whe the r the b e ne fic ia ry c ha ng e d the ir po sitio n to

the ir ma te ria l de trime nt a s a re sult o f re c e iving the o ve rpa yme nt o r a s a re sult o f re lying o n e rro ne o us info rma tio n supplie d to the b e ne fic ia ry b y Me dic a re .

50

Me dic a re a nd Wro ng ful De a th Ca se s

 Br

adle y v. Se be lius, 621 F

.3d 1330 (11th Cir. 2010) A c hild's lo ss o f pa re nta l c o mpa nio nship c la im is a pro pe rty rig ht b e lo ng ing to the c hild , no t Me dic a re .

 Be nson v. Se be lius, 2011 WL

1087254 (D.D.C. 2011), Pla intiff fa c to re d his mo the r’ s me dic a l c la ims into the se ttle me nt c a lc ula tio n. T he c o nditio na l pa yme nts we re re c o ve ra b le b y CMS.

51

Me dic a re Adva nta g e Pla ns (Pa rt C) a nd the MSPA

 T

hird Circ uit Ca se s –De c ide d June 28, 2012



In re Avandia Marke ting, Sale s Prac tic e s and Produc ts L iability L itigation, 685 F

. 3d 353 (3rd Cir. 2012) the c o urt he ld tha t the Me dic a re Se c o nda ry Pa ye r Ac t (“MSP”) pro vide s Me dic a re Adva nta g e Org a niza tio ns (“MAOs”) with a priva te c a use a c tio n to se e k re c o ve ry a g a inst a prima ry pa ye r (suc h a s a lia b ility insure r o r se lf-insure d de fe nd a nt in a pe rso na l injury ma tte r) in F e de ra l c o urt.

 T

he c o urt c o nc lude d tha t the pla in te xt o f the MSP is b ro a d a nd unre stric te d, a nd the re fo re , a llo ws a ny priva te pla intiff with sta nding , inc luding MAOs, to b ring a c a use o f a c tio n a g a inst prima ry pa ye rs.

52

 Pa rra v. Pa c ifiCa re o f Arizo na , No . 11-16069, ho lding tha t a

priva te insure r o pe ra ting a s a Me dic a re Adva nta g e Org a niza tio n Pla n is no t pe rmitte d to b ring a n a c tio n in fe de ra l c o urt se e king re imb urse me nt fo r $136,630.90 fro m a to rt se ttle me nt se c ure d b y survivo rs o f the de c e a se d in a wro ng ful de a th a c tio n.

 T

he Co urt ho lds tha t the fe de ra l sta tute , 42 U.S.C. § 1395y(b )(3)(A), "wa s inte nde d to a llo w priva te pa rtie s to vindic a te wro ng s o c c a sio ne d b y the fa ilure o f prima ry pla ns to ma ke pa yme nts." T his sta tute do e s no t a utho rize a suit fo r re imb urse me nt a g a inst its insure d (o r survivo rs) fo r re imb urse me nt.

Me dic a re Adva nta g e Pla ns (Pa rt C) a nd the MSPA

53

SMART Ac t Histo ry

 K

no wn a s the Stre ng the ning Me dic a re And Re pa ying

T

a xpa ye rs (SMART ) Ac t

 One o f the c o -spo nso rs, Re p. T

im Murphy (R-Pa .) indic a te d the b ill ste mme d fro m a c o nstitue nt who wa s in a c a r a c c ide nt a nd ha d to wa it ye a rs fo r a se ttle me nt o n me dic a l b ills c o ve re d b y Me dic a re ;

 T

he b ill's le a d De mo c ra tic spo nso r wa s Re p. Ro n K ind (D- Wis.)

 SMART

Ac t wa s sig ne d b y Pre side nt Ob a ma o n Ja nua ry 10, 2013

54

SMART Ac t Purpo se

 T

he SMART Ac t wa s pa sse d a s pa rt o f H.R. 1845 a nd a tta c he d o nto a Me dic a re I VI G Ac c e ss Bill;

 I

t re fo rms se ve ra l a spe c ts o f the c o nditio na l pa yme nt a nd MMSE A Se c tio n 111 pro c e sse s

 Ame nds Se c tio n 1862(b )(2)(B) o f the So c ia l

Se c urity Ac t (42 U.S.C. 1395y(b )(2)(B))

55

SMART Ac t: Se c tio n 201

 T

itle d “De te rminatio n Of Re imb urse me nt Amo unt T hro ug h CMS We b site T

• I

mpro ve Pro g ram E ffic ie nc y.”

 Whe re c o nd itio na l pa yme nts ha ve b e e n ma de , a c la ima nt o r

“a pplic a b le pla n” ma y a t a ny time 120 da ys prio r to the se ttle me nt, judg me nt o r a wa rd no tify the Se c re ta ry o f the e xpe c te d da te a nd a mo unt.

 T

he Se c re ta ry must pro vide c o nditio na l pa yme nt info rma tio n thro ug h a we b site a nd upda te the info rma tio n no la te r tha n 15 da ys a fte r a pa yme nt is ma de .

56

T he We b site Re q uire me nts



(a a ) T he info rma tio n sha ll b e a s c o mple te a s po ssib le a nd sha ll inc lude pro vide r o r supplie r na me , dia g no sis c o de s (if a ny), da te s

• f se rvic e , a nd c o nditio na l pa yme nt a mo unts.



(b b ) T he info rma tio n a c c ura te ly ide ntifie s tho se c la ims a nd pa yme nts tha t a re re la te d to a po te ntia l se ttle me nt, judg me nt, a wa rd , o r o the r pa yme nt to whic h the pro visio ns o f this sub se c tio n a pply.



(c c ) T he we b site pro vide s a me tho d fo r the re c e ipt o f se c ure e le c tro nic c o mmunic a tio ns with the individua l, re pre se nta tive , o r pla n invo lve d.



(dd ) T he we b site pro vide s tha t info rma tio n is tra nsmitte d fro m the we b site in a fo rm tha t inc lude s a n o ffic ia l time a nd da te tha t the info rma tio n is tra nsmitte d.



(e e ) T he we b site sha ll pe rmit the individua l, re pre se nta tive , o r pla n to do wnlo a d a sta te me nt o f re imb urse me nt a mo unts (in this c la use re fe rre d to a s a `sta te me nt o f re imb urse me nt a mo unt') o n pa yme nts fo r c la ims unde r this title re la ting to a po te ntia l se ttle me nt, judg me nt, a wa rd, o r o the r pa yme nt.

57

We b site Do wnlo a d: F ina l Co nditio na l Pa yme nt De ma nd

 I

f c e rta in c o nditio ns a re me t, the la st sta te me nt do wnlo a d e d fro m the we b site c a n b e c o nside re d the fina l de ma nd.

 F

ro m the da te o f no tic e , the Se c re ta ry ha s 65 da ys to re spo nd , o the rwise the c o nditio na l pa yme nt b e c o me s fina l.

 T

he Se c re ta ry ma y e xte nd fo r a n a dditio na l 30 da ys if the Se c re ta ry sho ws tha t the re wa s a fa ilure in the c la ims a nd pa yme nt po sting syste m a nd the fa ilure wa s justifie d due to e xc e ptio na l c irc umsta nc e s .

58

Re so lutio n o f Disc re pa nc ie s



I f the c la ima nt b e lie ve s the re is a disc re pa nc y o ve r the c o nditio na l pa yme nt a mo unt, the individua l (o r re pre se nta tive ) must pro vide do c ume nta tio n e xpla ining the disc re pa nc y a nd a pro p o sa l to re so lve suc h disc re pa nc y.



T he Se c re ta ry must re spo nd/ re so lve the dispute within 11 b usine ss da ys

• r the pro po se d re so lutio n b y the c la ima nt/ a pplic a b le pla n will b e

de e me d a c c e pte d.



I f ma de within the 11 da ys, the Se c re ta ry ma y re je c t the pro po sa l if it is de te rmine d tha t the re is no t a re a so na b le b a sis to inc lude o r re mo ve c la ims o n the sta te me nt o f re imb urse me nt.



Within the 11 da y pe rio d the Se c re ta ry must re spo nd in a time ly ma nne r b y a g re e ing to the pro po sa l to re so lve the disc re pa nc y o r b y pro viding do c ume nta tio n sho wing with g o o d c a use why the Se c re ta ry is no t a g re e ing to suc h pro po sa l a nd e sta b lishing a n a lte rna te disc re pa nc y re so lutio n.



T he re is no a dministra tive o r judic ia l re vie w o f the Se c re ta ry's de te rmina tio ns.

59

E ffe c tive Da te

 T

his pro c e ss will g o into e ffe c t 9 mo nths a fte r H.R. 1845 g o e s into e ffe c t – o r

• n Oc to b e r 10, 2013(e ffe c tive da te o f H.R.

1845 is Ja nua ry 10, 2013).

 T

his se c tio n a lso pro vide s tha t the Se c re ta ry c re a te a n a ppe a ls pro c e ss fo r c o nditio na l pa yme nts.

60

Se c tio n 202-T hre sho lds

 By

No ve mb e r 15th e a c h ye a r, the Se c re ta ry will ha ve to pub lish a thre sho ld whe re in re po rting a nd c o nditio na l pa yme nt re imb urse me nt will no t a pply.

 T

his will b e g in in the ye a r 2014.

61

Se c tio n 203- Re po rting Re q uire me nts

 Ame nds Se c tio n 1862(b )(8) o f the So c ia l Se c urity Ac t (42

U.S.C. 1395y(b )(8)

 Re mo ve s the ma nda to ry c ivil pe na lty o f $1000 a da y fo r

no n-c o mplia nc e with the Se c tio n 111 re po rting re q uire me nts a nd inste a d pro vide s tha t fa ilure to re po rt `ma y b e sub je c t to a c ivil mo ne y pe na lty o f up to $1,000 fo r e a c h d a y o f no nc o mplia nc e with re spe c t to e a c h c la ima nt.'; a nd

 T

he Se c re ta ry is re q uire d to de ve lo p re g ula tio ns fo r ide ntific a tio n o f pra c tic e s fo r whic h sa nc tio ns will o r will no t b e impo se d.

 T

he re g ula tio ns sha ll inc lude no t impo sing sa nc tio ns fo r g o o d fa ith e ffo rts to ide ntify a b e ne fic ia ry

62

Se c tio n 204 – So c ia l Se c urity Numb e rs

 Ame nds Se c tio n 1862(b )(8)(B) o f the So c ia l Se c urity

Ac t (42 U.S.C. 1395y(b )(8)(B))

 Re po rting re q uire me nts a re mo difie d so tha t a RRE

will no lo ng e r b e re q uire d to re po rt SSNs a nd/ o r he a lth ide ntific a tio n c la im numb e rs g o ing fo rwa rd.

63

Se c tio n 205 – Sta tute o f L imita tio ns

 Ame nds 1862(b )(2)(B)(iii) o f the So c ia l

Se c urity Ac t (42 U.S.C. 1395y(b )(2)(B)(iii))

 T

he sta tute o f limita tio ns fo r c o nditio na l pa yme nt re c o ve ry is 3 ye a rs a fte r the re c e ipt

• f

no tic e

• f

a se ttle me nt, judg me nt, a wa rd o r o the r pa yme nt ma de .

64

CURRE NT ST AT E OF T HE SMART ACT

 T

he fina l rule will b e pub lishe d in 2014

 I

nte rim fina l rule e xte nds the time pe rio d fo r CMS to a ppro ve a se ttle me nt to a s lo ng a s 245 da ys.

 I

F R “ig no re s the 120-da y sta tuto ry time - fra me ” o n CMS re spo nding to a re q ue st fo r a ppro va l o f a se ttle me nt.

65

I NT E RI M F I NAL RUL E 9/ 20/ 2013

 CMS I

SSUE S RUL E S-OBT AI NI NG F I NAL CONDI T I ONAL PAYME NT S VI A WE B PORT AL

 As dire c te d b y SMART

Ac t-c o nfo rms e xisting We b Po rta l to c o mply

 E

ffe c tive 11/ 19/ 2013

 Go to : www.fe de ra lre g iste r.g o v. Se a rc h fo r “me dic a re sma rt

a c t”

 Will a llo w a tto rne ys, who a re re g iste re d, to ha ve a c c e ss to

c o nditio na l pa yme nt info rma tio n fo r a c a se , inc luding da te s

• f se rvic e s, pro vide r na me s, I

CD9 Co de s, pa yme nt a mo unts.

 T

• b e imple me nte d no la te r tha n 1/ 1/ 2016

66

T HE ME DI CARE SE CONDARY PAYE R ST AT UT E

67

Me dic a re Se t-Aside (MSA) Arra ng e me nts

 Se c tio n 1862(b )(2)(A)(ii) o f the So c ia l Se c urity, Ac t [42 USC

1395 y(b )(2)], pre c lude s Me dic a re pa yme nt fo r se rvic e s to the e xte nt tha t pa yme nt ha s b e e n ma d e o r c a n re a so na b ly b e e xpe c te d to b e ma de pro mptly unde r lia b ility insura nc e .

 Me dic a re ha s the rig ht to sc rutinize a ny se ttle me nt o f wo rke r’ s

c o mpe nsa tio n c a se o r third-pa rty lia b ility c a se to d e te rmine if its rig ht must b e pro te c te d a g a inst a shift to Me dic a re o f a ny third pa rtie s’ lia b ility a s it re la te s to future me dic a l c a re .

 Unle ss fund s a re se t a side tha t will me e t the pa rtic ipa nt’ s

future me dic a l b ills, Me dic a re will no t a ssume lia b ility fo r future me dic a l tre a tme nt whe n a third pa rty is re spo nsib le .

68

Me dic a re Se t Aside

 T

he la w do e s no t re q uire the m; it’ s me re ly a de vic e to use to c o mply with the la w.

 No de finitio n o f “MSA” is in the MSP, its

re g ula tio ns o r o the r la w.

 MSA is a n a llo c a tio n o f se ttle me nt pro c e e ds

a mo ng the va rio us da ma g e c o mpo ne nts o f a se ttle d c la im.

69

Histo ry o f the MSA

 Me mo issue d July, 2001 (kno wn a s the “Pa te l

Me mo ”) fo rma lly intro duc e d the Me dic a re Se t Aside (MSA)a rra ng e me nt re g a rding wo rke rs’ c o mpe nsa tio n

 (WC) se ttle me nts.  MSA b e c a me a n e ffe c tive me a ns to ma na g e

e xpo sure unde r the MSP.

 CMS e mb ra c e d MSAs a s the pre fe rre d me a ns o f

c o mplying with the MSP a nd minimizing future c o nditio na l pa yme nts.

70

NE W CMS RE F E RE NCE GUI DE F OR WCMSA

 I

ssue d Ma rc h 29, 2013

 CMS will re vie w a pro po se d WCMSA a mo unt whe n the

fo llo wing wo rklo a d re vie w thre sho lds a re me t:

 T

he c la ima nt is a Me dic ar

e be ne fic iar y a nd the to ta l

se ttle me nt a mo unt is gr

e ate r than $25,000.00; o r

 T

he c la ima nt ha s a re a so na b le e xpe c ta tio n o f Me dic a re e nro llme nt within 30 months of the se ttle me nt date and the a ntic ipa te d to ta l se ttle me nt a mo unt fo r future me dic a l e xpe nse s a nd d isa b ility/ lo st wa g e s o ve r the life o r dura tio n

• f the se ttle me nt a g re e me nt is e xpe c te d to b e gr

e ate r than $250,000.00.

71

NE W CMS RE F E RE NCE GUI DE F OR WCMSA



A c la ima nt ha s a re a so na b le e xpe c ta tio n o f Me dic a re e nro llme nt within 30 mo nths if a ny o f the fo llo wing a pply:



T he c la ima nt ha s a pplie d fo r So c ia l Se c urity Disa b ility Be ne fits



T he c la ima nt ha s b e e n de nie d So c ia l Se c urity Disa b ility Be ne fits b ut a ntic ipa te s a ppe a ling tha t de c isio n



T he c la ima nt is in the pro c e ss o f a ppe a ling a nd/ o r re -filing fo r So c ia l Se c urity Disa b ility b e ne fits



T he c la ima nt is 62 ye a rs a nd 6 mo nths o ld



T he c la ima nt ha s a n E nd Sta g e Re na l Dise a se (E SRD) c o nditio n b ut do e s no t ye t q ua lify fo r Me dic a re b a se d upo n E SRD.



I f the thre sho ld is me t, a WCMSA c a n b e sub mitte d to CMS fo r a ppro va l.



T he se thre sho lds a re c re a te d b a se d o n CMS’ wo rklo a d, a nd a re no t inte nd e d to indic a te tha t c la ima nts ma y se ttle b e lo w the thre sho ld with

• impunity. Cla ima nts must still c o nside r Me dic a re ’ s

72

NE W CMS RE F E RE NCE GUI DE F OR WCMSA

 T

he g o a l o f e sta b lishing a WCMSA is to e stima te , a s a c c ura te ly a s po ssib le , the to ta l c o st tha t will b e inc urre d fo r a ll me dic a l e xpe nse s o the rwise re imb ursa b le b y Me dic a re fo r wo rk-re la te d c o nd itio ns during the c o urse o f the c la ima nt’ s life , a nd to se t a side suffic ie nt funds fro m the se ttle me nt, judg me nt, o r a wa rd to c o ve r tha t c o st. WCMSAs ma y b e funde d b y a lump sum o r ma y b e struc ture d, suc h tha t a fixe d a mo unt o f funds a re pro vide d e a c h ye a r fo r a fixe d numb e r o f ye a rs.

 Onc e the CMS-a ppro ve d se t-a side a mo unt is e xha uste d

a nd a c c ura te ly a c c o unte d fo r to CMS, Me dic a re will pa y prima ry fo r future Me dic a re -c o ve re d e xpe nse s re la te d to the WC injury tha t e xc e e d the a ppro ve d se t-a side a mo unt.

73

Whe n to Co nside r a n MSA

 Do e s the se ttle me nt invo lve a me dic a l c la im?  I

s it re a so na b ly like ly tha t the injure d pe rso n will ha ve

• ng o ing o r future me dic a l e xpe nse s re la te d to the

c la ime d injury?

 Are the se me dic a l e xpe nse s o the rwise c o ve re d b y

Me dic a re ?

 I

s the b e ne fic ia ry like ly to b e a Me dic a re b e ne fic ia ry whe n suc h me dic a l e xpe nse s a re inc urre d?

74

Arg ume nt fo r L MSA



Sta tute is pre tty c le a r: Me dic a re is pro hib ite d fro m ma king pa yme nt whe n “pa yme nt ha s b e e n ma de , o r c a n re a so na b ly b e e xpe c te d to b e ma de unde r a pla n o f insura nc e .”



Our Re g io na l Offic e ha s indic a te d tha t MSA’ s sho uld b e use d in to rt c a se s to pro te c t CMS’ s inte re sts, a nd the sa me c rite ria use d in Wo rke r’ s Co mpe nsa tio n c a se s sho uld b e a pplie d.



I f the pa rtie s ma ke a g o o d fa ith e ffo rt to a llo c a te the L MSA a nd CMS la te r re vie ws the file , the b urde n is o n CMS to pro ve the a llo c a tio n wa s unre a so na b le .



Re c e nt Me mo s a nd re q ue st fo r rule s.



F a ilure to a d he re c o uld c a use the Me dic a re b e ne fic ia ry to b e de nie d b e ne fits T he de fe nda nts a nd the ir insure rs mig ht b e fo rc e d to pa y fo r future c a re tha t wa s a lre a d y c o mpe nsa te d fo r a s a c o mpo ne nt o f the se ttle me nt. T he pla intiff’ s a tto rne y is fa c e d with the po ssib ility o f a CMS re c o ve ry a c tio n a g a inst his fe e fro m the se ttle me nt. Atto rne ys o n b o th side s ma y fa c e ma lpra c tic e a c tio ns.



CMS re ta ins a re tro spe c tive re vie w to d e te rmine if its rig hts we re pro te c te d.

75

Arg ume nt Ag a inst L MSA



42 C.F.R. Se c tio ns 411.46 a nd 411.47 e xpre ssly pro vide a ma nne r b y whic h Me dic a re must a djust its b e ne fits, sho uld a n a llo c a tio n fo r future me dic a l e xpe nse s b e pro vide d in a wo rke rs’ c o mpe nsa tio n se ttle me nt; no suc h re g ula tio n fo r lia b ility c a se s.



CMS me mo in July, 2001 indic a ting MSAs wo uld no w b e re c o mme nde d in c e rta in insta nc e s o f c a se se ttle me nt, the me mo me ntio ne d o nly wo rke rs’ c o mpe nsa tio n c la ims. T he re wa s no la ng ua g e , pro c e sse s, o r pro c e dure s tha t a pplie d to lia b ility c la ims.



CMS is re fusing to re vie w mo st L MSAs.



T he re a re c a se s whe re the se ttle me nt is no t e no ug h to c o ve r the a llo c a tio n.



Wo rke rs’ c o mpe nsa tio n do e s no t invo lve po lic y limits.



I n lia b ility, the fo ur e le me nts o f ne g lig e nc e must b e a na lyze d (duty

• we d , d uty b re a c he d , injury a nd pro xima te c a use ). Afte r tha t

a na lysis, c o nc e pts suc h a s c o mpa ra tive o r c o ntrib uto ry ne g lig e nc e must b e ta ke n into c o nside ra tio n. Cle a rly, wo rke rs’ c o mpe nsa tio n is a n e a sie r c o nc e pt to c o mpre he nd tha n de te rmining ne g lig e nc e in a lia b ility a c c ide nt.



Se ttle me nt sho uld b e e njo ye d b y pla intiff; no t g ive n to CMS if no t ne c e ssa ry.

76

CMS Guida nc e

 4/ 22/ 03 Me mo in WCMSA:

 T

he fa c ts o f the c a se de mo nstra te tha t the injure d individua l is b e ing c o mpe nsa te d fo r pa st me dic a l e xpe nse s o nly.

 T

he re is no e vide nc e tha t the individua l is a tte mpting to ma ximize the o the r a spe c ts o f the se ttle me nt to Me dic a re 's de trime nt.

 T

he individua l’ s tre a ting physic ia ns c o nc lude (in writing ) tha t to a re a so na b le de g re e o f me dic a l c e rta inty the individua l will no lo ng e r re q uire a ny Me dic a re c o ve re d tre a tme nts.

77  Sta lc up

is the MSP Re g io na l Co o rdina to r-Da lla s, T e xa s (pe rta ins to AR, OK , T X, NM, L A).

 “T

he L a w re q uire s tha t the Me dic a re T rust F und s b e pro te c te d fro m pa yme nt fo r future se rvic e s whe the r it’ s a Wo rke r’ s Co mpe nsa tio n o r lia b ility c a se . T he re is no distinc tio n in the la w.”

 T

he re is no fo rma l pro c e ss fo r re vie w o f lia b ility c a se s.

 Atto rne ys must de c ide b a se d upo n the fa c ts o f the ir c a se

whe the r the T rust F und must b e pro te c te d.

Sa lly Sta lc up Me mo – 5/ 25/ 11

78

Sa lly Sta lc up Me mo – 5/ 25/ 11

 “T

he fa c t tha t a se ttle me nt/ judg me nt/ a wa rd do e s no t spe c ify pa yme nt fo r future me dic a l se rvic e s do e s no t me a n tha t the y a re no t funde d.”

 “T

he fa c t tha t the a g re e me nt de sig na te s the e ntire a mo unt fo r pa in a nd suffe ring do e s no t me a n tha t future me dic a ls a re no t funde d.”

 “Se t-a side is o ur me tho d o f c ho ic e a nd the a g e nc y fe e ls it

pro vide s the b e st pro te c tio n fo r the pro g ra m a nd Me dic a re b e ne fic ia ry.”

79

Cha rlo tte Be nso n Guida nc e Me mo – 9/ 30/ 11

 Be nso n is the Ac ting Dire c to r o f the F

ina nc ia l Se rvic e s Gro up o f the Offic e o f F ina nc ia l Ma na g e me nt in Ba ltimo re , Ma ryla nd

 Whe re the b e ne fic ia ry’ s tre a ting physic ia n c e rtifie s in writing tha t

tre a tme nt fo r the a lle g e d injury re la te d to the lia b ility “se ttle me nt” ha s b e e n c o mp le te d a s o f the da te o f the “se ttle me nt,” a nd future me dic a l se rvic e s fo r injury will no t b e re q uire d, Me dic a re c o nside rs its inte re st, with re spe c t to future me dic a ls fo r tha t pa rtic ula r “se ttle me nt” sa tisfie d.

 Whe n the re is suc h a c e rtific a tio n, the re is no ne e d fo r the

b e ne fic ia ry to sub mit the c e rtific a tio n o r a pro p o se d L MSA fo r re vie w. CMS will no t pro vide the se ttling pa rtie s with c o nfirma tio n tha t Me dic a re ’ s inte re st with re sp e c t to future me dic a ls fo r tha t “se ttle me nt” ha s b e e n sa tisfie d.

 T

he b e ne fic ia ry a nd/ o r the ir re pre se nta tive a re e nc o ura g e d to ma inta in the physic ia n’ s c e rtific a tio n.

80

Me dic a re Se c o nda ry Pa ye r a nd ‘ F uture Me dic a ls’ Pro po se d Rule Ma king

 On Ma y 3 o f 2012, CMS sub mitte d to the Offic e o f

Ma na g e me nt a nd Budg e t a dva nc e d no tic e

• f

pro po se d rule ma king (ANPRM) e ntitle d "Me dic a re Se c o nda ry Pa ye r a nd 'F uture Me dic a ls' (CMS-6047- ANPRM).

 So lic its

c o mme nt

• n
• ptio ns

to “c la rify ho w b e ne fic ia rie s c a n me e t the ir o b lig a tio ns to pro te c t Me dic a re 's inte re st with re spe c t to Me dic a re Se c o nda ry Pa ye r (MSP) c la ims invo lving a uto mo b ile a nd lia b ility insura nc e (inc luding se lf-insura nc e ), no - fa ult insura nc e , a nd wo rke rs' c o mpe nsa tio n whe n future me dic a l c a re is c la ime d o r the se ttle me nt, judg me nt, a wa rd , o r o the r pa yme nt re le a se s (o r ha s the e ffe c t o f re le a sing ) c la ims fo r future me dic a l c a re ."

81

Pro po se d Rule Ma king



T he CMS pro po se d g e ne ra l rule sta te s if a n “individua l o r Me dic a re b e ne fic ia ry” a ntic ipa te s re c e iving Me dic a re c o ve re d se rvic e s a fte r the da te o f the se ttle me nt, the n suc h pe rso n is re q uire d to sa tisfy Me dic a re ’ s inte re st with re spe c t to “future me dic a ls” using a ny o ne o f se ve ra l o ptio ns.

 Optio n 1: T

he Me dic a re b e ne fic ia ry pa ys fo r a ll future injury re la te d e xpe nse s o ut o f the se ttle me nt pro c e e ds until e xha uste d.

 Optio n 2: No MSA is re q uire d if individua l is no t e xpe c te d to b e c o me a

Me dic a re b e ne fic ia ry within 30 mo nths o f the se ttle me nt a nd the injury is no t “c hro nic ” a s de fine d a nd the se ttle me nt a mo unt is b e lo w a c e rta in a mo unt. Co mme nts we re so lic ite d o n wha t the thre sho ld a mo unt sho uld b e . T his wo uld b e simila r to the pro c e dure e mplo ye d in wo rke rs c o mpe nsa tio n c a se s.

 Optio n 3. No MSA is re q uire d if the tre a ting physic ia n c e rtifie s the re a re no

future injury re la te d e xpe nse s to b e inc urre d.

 Optio n 4. A pro po se d MSA is sub mitte d to CMS fo r a ppro va l.  Optio n 5. T

he Me dic a re b e ne fic ia ry pa rtic ipa te s in o ne o f the CMS re c o ve ry o ptio ns. T his o ptio n to c o ve r the sma lle r se ttle me nts.

 Optio n 6. T

he Me dic a re b e ne fic ia ry ma ke s a n upfro nt pa yme nt.

 Optio n 7. T

he individua l re c e ive s a c o mpro mise o r wa ive r fro m CMS a t the time o f the se ttle me nt.

82

Pro po se d Rule Ma king

 T

he pub lic c o mme nt pe rio d e nde d o n Aug ust 14, 2012

 CMS initia te d the MSA rule ma king o n the ir o wn; no funding

b y Co ng re ss

 T

his issue ha s ta ke n a b a c k-se a t to the SMART Ac t imple me nta tio n re q uire me nts.

83

Allo c a tio ns

 Me dic a re is no t b o und b y the pa rtie s’ a llo c a tio n o f se ttle me nt

funds

 T

he c o urt c a n de te rmine whe the r future me dic a l e xpe nse s a re like ly a nd the a mo unt o f the a llo c a tio n ne c e ssa ry fo r a

• MSA. Se e , Big R T
• wing v. Be noit, No . 6:2010c v00538 (W.D. L

a 2010); 2011 WL 43219; F

inke v. Hunte r ’s Vie w, 2009 WL

6326944 (D.Minn.); Sc he xnayde r

• v. Sc ottsdale , No . 6:2009c v01390,

(W.D. L a ); 2011 WL 3273547

84

AL L OCAT I ON DE T E RMI NAT I ON

 Co mpre he nsive Me dic a l Re c o rds Re vie w Pe rfo rme d b y

MSCC (Me dic a re Se t-Aside Ce rtifie d Co nsulta nt)

 Me dic a l Re c o rds (L

a st 2 ye a rs): ide ntify missing me dic a l re c o rds

 Suppo rting Me dic a l Re c o rds (L

a st 2 ye a rs) i.e . T he ra py Se rvic e s, F CE , IME

 Pha rma c y Summa ry (L

a st 2 ye a rs)

 Se ttle me nt (Pro po se d) Do c ume nts

85 In Re : Oil Spill by the Oil Rig “De e pwate r Hor izon” in the Gulf of Me xic o, on Apr il 20, 2010. T his Doc ume nt Re late s T

• : No. 12- 968,

Plaisanc e , e t al. v. BP E xplor ation & Pr

• duc tion Inc ., e t al. and All Ac tions. MDL

2179 SE CT ION J UNIT E D ST AT E S DIST RICT COURT F OR T HE E AST E RN DIST RICT OF L OUISIANA 2013 U.S. Dist. L E XIS 4595  T

he c o urt a c kno wle dg e d no t o nly the re imb urse me nt rig hts fo r re la te d me dic a l e xpe nse s a lre a dy inc urre d , b ut a lso q uo te d the F e de ra l Re g iste r so lic ita tio n la st summe r a s a utho rity suppo rting Me dic a re ’ s a sse rtio n o f a n inte re st in future me dic a l c a re .

 T

he mo st inte re sting se c tio n o f the o rde r c o nta ine d the sta te me nts a b o ut the ne g o tia tio n with CMS to e nsure tha t c la ss me mb e rs wo uld no t b e witho ut c o ve ra g e .

86

Smith v. Ma rine T e rmina ls of Arka nsa s, 2011 WL 3489806, U.S. E .D. AR, Aug . 9, 2011

 Curre ntly e lig ib le Me dic a re pla intiff c a n se ttle

b a se d o n third-pa rty a sse ssme nt o f future me dic a l e xpe nse s to a vo id litig a tio n a nd e nc o ura g e se ttle me nt to a vo id c o st a nd time re la te d to litig a tio n.

 L

itig a tio n wo uld ha ve se t fo rwa rd d e te rmina tio n

• f, a mo ng o the r thing s, future me dic a l e xpe nse s.

87

Co urt invo lve me nt in I ssue s

• f E

q uita b le Allo c a tio n



Ste r r e tt v. Kle ba r t, 2013 Co nn.Supe r. L

E XIS 245 (file d F e b rua ry 5, 2013)



F e b rua ry 5, 2013, the Co urt, g ra nte d the se ttling pa rtie s’ mo tio n to de te rmine tha t the pa rtie s ha ve re a so na b ly c o nside re d Me dic a re ’ s inte re sts a s re q uire d b y the Me dic a re Se c o nda ry Pa ye r (“MSP”) Ac t.



T he pa rtie s ha d c o nc lude d tha t the y ha d re a so na b ly c o nside re d Me dic a re ’ s future inte re st a nd tha t a lia b ility Me dic a re Se t-a side Arra ng e me nt (“L MSA”) wa s no t ne e de d a s pa rt o f se ttling the lia b ility c la im.



T he Co urt, a fte r re vie wing the e vide nc e pre se nte d, a g re e d tha t the pa rtie s ha d re a so na b ly c o nside re d Me dic a re ’ s future inte re st in c o nc lude d tha t no se ttle me nt pro c e e ds ha d b e e n “a llo c a te d” fo r future me dic a l e xpe nse s o the rwise c o ve re d b y Me dic a re within the g ro ss a wa rd.

88

F r ank v. Gate way Insur anc e Company, 2012 WL 868872, U.S. Dist. Ct., W.D. L A, Mar . 13, 2012

 Co urt

• rde rs

tha t de spite Me dic a re no t pa rtic ipa ting in a llo c a tio n o f future me dic a l, c o nditio na l pa yme nts a re o rde re d to b e pa id, future e xpe nse s will b e se t in inte re st-b e a ring a c c o unt a nd b a se d o n third-pa rty e stima te o f future e xpe nse s; o nc e inte re st-b e a ring a c c o unt is de ple te d b y Me dic a id c ha rg e s the n Me dic a re must pa y e ve n if re la te d to suit.

89

Siple r

• v. T

r ans Am T r uc king, Inc ., US Distr ic t Cour t – Ne w Je r se y

 Pla intiff invo lve d in PI

c a se a nd re c e ive s Me dic a re

 Co urt c o nc lude s tha t no Me dic a re a llo c a tio n is ne c e ssa ry.  T

he se ttle me nt in this c a se did no t a rise in the wo rke r's c o mpe nsa tio n c o nte xt a nd it do e s no t indic a te a pa rtic ula r a mo unt to c o mpe nsa te Mr. Siple r fo r future me dic a l e xpe nse s a rising o ut o f the a c c ide nt.

 T

• rt c a se s invo lve no n-e c o no mic da ma g e s a nd no t

de te rmine d b y a spe c ific fo rmula

 T

• re q uire pe rso na l injury se ttle me nts to spe c ific a lly

a ppo rtio n future me dic a l e xpe nse s wo uld pro ve b urde nso me to the se ttle me nt pro c e ss a nd , in turn, disc o ura g e pe rso na l injury se ttle me nts.

90

Bruton v. Ca rniva l Corpora tion, 2012 WL 1627729, US Dist. Ct. S. Dist. F L , Ma y 2, 2012

 Afte r re a c hing se ttle me nt a g re e me nt with g e ne ra l te rm tha t

pla intiff must re le a se d e fe nd a nt fro m future lia b ility fro m Me dic a re c la ims, pla intiff strike s pro visio n fro m re le a se o f lia b ility tha t re q uire s pla intiff to se t up a se p a ra te a c c o unt to ho ld se t-a side a mo unt. De fe nda nt a rg ue s tha t “c o uld ” ma ke the m lia b le to Me dic a re fo r no t pro te c ting Me dic a re ’ s inte re st.

 Co urt ho ld s tha t a c c o unt is no t re q uire d, a g re e me nt d o e s no t

spe c ific a lly re q uire it, a nd de fe nda nt is suffic ie ntly pro te c te d de spite the fa c t tha t Me dic a re ha s no t g ive n suffic ie nt indic a tio n o f wha t pro te c ts the ir inte re st. Pla intiff’ s mo tio n to c o mpe l g ra nte d , a nd d e fe nd a nt re q uire d to pa y se ttle me nt a mo unt.

91

E ar ly v. Car nival Co r po r atio n,

• No. 12- 20478- CIV- Goodman

(S.D. F

• la. F

e br uar y 7, 2013)

 T

he se ttling pa rtie s a ske d the Co urt to de te rmine whe the r a lia b ility Me dic a re Se t-a side Arra ng e me nt (“L MSA”) wa s re q uire d a s pa rt o f se ttling the c la im.

 T

he Co urt c o nc lude d , a fte r re vie wing the e vide nc e , tha t the pa rtie s, in fa c t, did no t ha ve a se ttle me nt a g re e me nt a s the y did no t a g re e to e ve ry e sse ntia l te rm.

92

T ype s o f Arra ng e me nts

Se lf-Administe re d Custo dial Ac c o unts Spe c ial Ne e ds T

rust

Po o le d T

rust

93

Administra tio n

 Distrib utio ns fro m the MSA ma y o nly b e ma de fo r me dic a l

e xpe nse s tha t wo uld b e c o ve re d b y Me dic a re .

 E

a c h MSA must ha ve re a so na b le inve stme nt po lic y rule s a nd pro vide a c c o unting s.

 T

he a c c o unting s must b e ma de o n a n a nnua l b a sis to the Be ne fits Co ntra c to r re spo nsib le fo r mo nito ring the c a se .

 Hinsinge r

• v. Showboat Atlantic City, 2011 N.J. Supe r. L

E XI S 96, (Ja nua ry 21, 2011), a llo we d a tto rne y fe e s to b e pa id fro m the MSA.

94

Se lf-Administra tio n

 Must c o mple te a nnua l a tte sta tio n, inte re st

re po rte d, e lig ib le / c o ve re d ite ms, pa yme nt re c o rds, re la te d to MSA

 Mino r Ca se s (Rx o r Ortho tic s o nly)  Unde rsta nding Me dic a re a llo wa b le ite ms

95

Pro fe ssio na l-Administra tio n

 Allo ws fo r a lic e nse d , insure d a nd b o nde d

insura nc e pro fe ssio na l to a dministe r the funds simila r to a wo rke rs’ c o mpe nsa tio n o r g ro up he a lth pla n

 Administra to r is a c usto dia n o f a n a c c o unt, tha t is

e sta b lishe d o n b e ha lf o f the c la ima nt

 Co mple tio n o f the a nnua l a tte sta tio n file d with

CMS

96

F unding

L

ump sum

Struc ture d Se ttle me nts

97

Struc turing a n MSA

 Pa ye r re c e ive s o ut-o f-po c ke t disc o unt b y

purc ha sing a n a nnuity to fund to ta l a mo unt

 I

f funds a re e xha uste d b e fo re ye a r-e nd, Me dic a re c o ve rs funding

98

De a th

 Onc e CMS de te rmine s tha t the c la ims

ha ve b e e n pa id, a ny a mo unts re ma ining in the MSA ma y b e distrib ute d pursua nt to sta te la w.

99

Ve te ra n’ s Administra tio n

 U.S. De pt. o f Ve te rans Affairs v Bo re si, No . SC 92541 (Mo .

2013); 2013 MO L e xis 25 (le xis.c o m), 2013 MO L e xis 25 (L e xis Adva nc e ) (April 30, 2013); a llo ws the VA to inte rve ne in a wo rke rs c o mp c a se to re c o ve r the ir me dic a l tre a tme nt c o sts fro m the injury.

 T

he c o urt c o nc lude d tha t fe de ra l la w wa s c o ntro lling a nd tha t 38 U.S.C. § 1729 a llo we d a n une q uivo c a l rig ht to inte rve ne in a ny a c tio n b ro ug ht a ve te ra n c o ve re d unde r a wo rke r’ s c o mpe nsa tio n la w o r pla n. T he Supre ma c y Cla use trumpe d a ny sta te c o mp la w. T he Misso uri c o mp la w ha d no pro visio n fo r inte rve ntio n in the se c irc umsta nc e s, a nd the c ivil rule s fo r inte rve ntio n unde r Rule 52.12 did no t a pply.

100

ME DI CAI D L I E NS: MORE COMPL I CAT I ON

101

Othe r Be ne fits tha t Must b e Co nside re d

SSI Me dic a id

T he se “me a ns-te ste d” b e ne fits c o uld b e je o pa rdize d b y the re c e ipt o f a se ttle me nt. Ma ny re c ipie nts o f Me dic a id ha ve no o the r fo rm o f he a lth insura nc e . T he lo ss o f Me dic a id c o uld b e de va sta ting .

102

Pro te c ting Othe r Me a ns T e ste d Be ne fits

 An MSA do e s no t pro te c t o the r “me a ns te ste d

b e ne fits” a nd will impa c t o ng o ing e lig ib ility.

 An MSA sho uld b e a sub -trust in a Spe c ia l Ne e ds

T rust.

 Summa ry

 T

wo issue s; ma inta ining “me a ns te ste d b e ne fits”

 De a ling with – RSMo . 208.215 - Me dic a id L

ie n;

 Ma inta ining “me a ns te ste d b e ne fits”

 Spe c ia l Ne e ds T

rusts

 Othe r o ptio ns

103

Se lf-Se ttle d o r Pa y Ba c k – Spe c ia l Ne e ds T rusts 42 U.S.C. 1396(d)(4)(A)

 T

he individua l must b e unde r a g e 65 a t the time the trust is c re a te d a nd funde d

 T

he trust ma y b e e sta b lishe d b y a pa re nt, g ra ndpa re nt, le g a l g ua rdia n, o r a c o urt

 Se e RSMo . §475.092 a nd RSMo . §511.030  T

he individua l must b e disa b le d (sa me de finitio n fo r disa b ility a s use d fo r SSDI

• r SSI

)

 T

he T rust must c o nta in pa y-b a c k pro visio ns

 Misso uri ha s spe c ia l re q uire me nts Se e RSMo . §475.092  T

he trust must b e irre vo c a b le

104

Me dic a id Re imb urse me nt a t Se ttle me nt

 T

he fe de ra l Me dic a id sta tute , 42 U.S.C. § 1396 e t. se q ., e sse ntia lly fo rc e s sta te s to sub ro g a te pe rso na l injury c la ims whe re the sta te a g e nc y ha s pa id c la ims o n the pla intiff-b e ne fic ia ry’ s b e ha lf.

105

Ar

• k. De p't of He alth & Hum. Se r

vs.

• v. Ahlbor

n, 126 S. Ct. 1752 (2006)

 T

he US Supre me Co urt rule d una nimo usly to limit sta te Me dic a id a g e nc ie s' c la ims fo r re imb urse me nt to the po rtio n o f a ny to rt se ttle me nt a ttrib uta b le to pa st me dic a l e xpe nse s.

 T

he a g e nc ie s ma y no t c la im a ny pa rt o f a pla intiff's re c o ve ry fo r lo st wa g e s, pa in a nd suffe ring , o r

• the r no nme dic a l da ma g e s.

106

WOS v. E MA, U.S. Supre me Co urt, No . 12-98

 No rth Ca ro lina c la ime d o ve r $900,000 o f a le g a l me dic a l

ma lpra c tic e se ttle me nt wo n b y the p a re nts o f a 13-ye a r-o ld g irl b o rn with se rio us injurie s tha t le ft he r una b le to live o r wo rk inde pe nde ntly.

 Anti-lie n pro visio n in fe de ra l Me dic a id sta tute pre e mpte d No rth

Ca ro lina 's irre b utta b le sta tuto ry pre sumptio n tha t o ne -third o f to rt re c o ve ry wa s a ttrib uta b le to me dic a l e xpe nse s

 T

he c o urt sta te d tha t whe n “the re ha s b e e n a judic ia l finding

• r

a ppro va l

• f

a n a llo c a tio n b e twe e n me dic a l a nd no nme dic a l da ma g e s—in the fo rm o f e ithe r a jury ve rdic t, c o urt de -c re e , o r stipula tio n b inding o n a ll p a rtie s—tha t is the e nd o f the ma tte r.” “With a stipula tio n o r judg me nt und e r this pro c e dure , the a nti-lie n pro visio n pro te c ts fro m sta te de ma nd the p o rtio n o f a b e ne fic ia ry’ s to rt re c o ve ry tha t the stipula tio n

• r judg me nt do e s no t a ttrib ute to me dic a l e xpe nse s.”

107

Se c tio n 202 o f the Bipa rtisa n Budg e t Ac t o f 2013

 Co ng re ss ha s de la ye d b y two ye a rs a pro visio n in la st

De c e mb e r's b udg e t b ill tha t g ive s sta te s the a b ility to re c o ve r Me dic a id c o sts fro m a b e ne fic ia ry's full pe rso na l injury se ttle me nt o r a wa rd.

 T

he la w, whic h a me nds the So c ia l Se c urity Ac t to ne g a te the U.S. Supre me Co urt's de c isio ns in Arkansas De partme nt o f He alth and Human S e rvic e s v. Ahlb o rn a nd Wo s v. E .M.A., wa s se t to ta ke e ffe c t Oc to b e r 1, 2014.

NEGOTIATING LIENS AND CLAIMS FOR REIMBURSEMENT WITH PRIVATE HEALTH INSURERS

AUGUST 26, 2014

A F T E R M C C U TC H E N P R AC T I C E A P P ROAC HE S

Presented by:

Attorney Andrew D. Myers Law Offices of Andrew D. Myers

89 Main St., North Andover, MA 4 Birch St., Derry, NH andrew@attorney-myers.com

109

US AIRWAYS V. MCCUTCHEN

Facts: James McCutchen was injured seriously in a car accident. His health insurance plan administered by US Airways paid $66,866 to cover medical bills. Mr. McCutchen recovered over $100,000 from third

• parties. The plan required Mr. McCutchen to pay back medicals paid by

the plan out of any amount recovered by third parties. The plan demanded full reimbursement of the $66,866 paid. McCutchen argued that that US Airways failed to take into account his legal fees. US Airways filed suit for “appropriate equitable relief” under provisions of the Employment Retirement Security Income Act. (ERISA)

110

US AIRWAYS V. MCCUTCHEN

Procedure: (1) The District Court ordered McCutchen to pay the full amount of the medical bills paid: $66,866. (2) The U.S. Court of Appeals for the Third Circuit reversed, holding that ERISA is subject to equitable defenses. To determine appropriate equitable relief, the District Court must take into account the distribution of the amount recovered from third parties between McCutchen and his attorneys. Issue for SCOTUS: Does ERISA § 502(a)(3) authorize the court to use equitable principles to determine appropriate equitable relief?

111

US AIRWAYS V. MCCUTCHEN

Held: The terms of the ERISA plan govern. Neither general unjust enrichment principles nor specific doctrines such as the double recovery rule or the common fund rule can override specific language of the contract. The plan is paramount, Court will hold parties to the terms of the contract.

112

US AIRWAYS V. MCCUTCHEN

Effect: 1. Application of Double Recovery Rule precluded by plan. 2. BUT: Where plan language is silent as to a particular issue, participant may be able to apply equitable defenses. 3. Plan was silent on allocation of attorney fees and the common fund doctrine provides appropriate default rule. 4. “The plan is silent on the allocation of attorney’s fees, and in those circumstances, the common-fund doctrine provides the appropriate

• default. In other words, if US Airways wished to depart from the well-

established common-fund rule, it had to draft its contract to say so— and here it did not.”

113

FIRST DOLLAR RECOVERY No One G ne Gets Paid aid U Unt ntil il H Heal ealth Pl Plan G an Gets Paid aid Heal ealth Pl Plan an Fir First

114

GOING FORWARD AFTER MCCUTCHEN

Effect:

• Application of Double Recovery Rule precluded by plan.
• BUT: Where plan language is silent as to a particular issue, participant

may be able to apply equitable defenses.

• Plan was silent on allocation of attorney fees and the Common Fund

Doctrine provides appropriate default rule.

115

STATE LAW

Some States prohibit Subrogation

• By state statute, some states prohibit insurance companies from

placing subrogation clauses into health insurance policies. Look to statute and case law

• Example: Massachusetts statute and case law held to enforce full

recovery to health care plan, rejecting payment of attorney fees or costs. Pierce v. Christmas Tree Shops, Inc. , 706 N.E.2d 633 (1999)

116

PIERCE V. CHRISTMAS TREE SHOPS

ISSUE: Whether Health Care Plan, a lienholder under the medical lien statute [MGL c. 111, § 70a-70b] may be ordered to contribute to the attorney fees and costs incurred by the plaintiff in pursuing a tortfeasor. FACTS: Donna Pierce was injured on the premises of the Christmas Tree Shops store. The HPHC plan paid medical expenses of $10,165. Pierce brought suit in Superior

• Court. Settled before trial. Pierce brought motion in court to determine her
• bligations to HPHC seeking a compromise to the lien amount and an order

requiring the plan to share attorney fees and costs. HELD: The statute does not require the lienholder to pay any portion of the plaintiff’s fees and costs.

117

PRACTICE STRATEGIES

1. INTAKE INTERVIEW All health insurance cards [Medicare-Medicaid-private-other?] Summary Plan Description If no SPD: Signed authorization for copy Alternative: client obtains Copy of coverage selections page all other insurance Auto Insurance Umbrella insurance? Homeowners?

118

PRACTICE STRATEGIES

• 2. EXHAUST ALL OTHER MEDICAL INS. BENEFITS

Car Insurance:

• No-Fault Benefits [“PIP”]
• Med-Pay Benefits

Premises Liability:

• Med pay
• Get med pay info ASAP – often early submission deadlines

Use these to “pay down” Health Ins Lien

119

PRACTICE STRATEGIES

• 3. OBTAINING THE LIEN
• Letter of representation and request
• Briefly describe type of injury & date of loss
• HIPAA compliant authorization

120

PRACTICE STRATEGIES

• 4. PARSING THE LIEN

After receipt:  Mail/email otherwise provide copy to client  Read lien itemization with client  Review line by line in person or at least on telephone  Is each item on lien solely related to injuries caused by accident or

• ther medical issues.

 Send query/challenge to Health Ins.

121

PRACTICE STRATEGIES

• 5. NEGOTIATING LIEN

 Contest unrelated items : Insist unrelated items deleted  Challenge questionable items, multiple reasons for visits  Dispute excessive costs [3,000 for x-ray?]  Speak to decision makers  Use cool calm professional approach – belligerence never helps  Account for comparative fault – likelihood of success at trial  Tell “war stories” about losses. (Only time in career to discuss cases lost)

122

PRACTICE STRATEGIES

• 6. PRELITIGATION AGREEMENT
• Based on uncertainty of trial
• Attorney fee
• Costs
• Experts required
• Delay
• Signed writing acknowledging agreement by Health Plan

123

RESOLVE LIEN BEFORE SETTLEMENT

FI FIRS RST OFFE FFER

• Duty to communicate with client
• Show lienholder actual 3D party analysis

STATUS O OF F NEGOTI TIATION

• Notify lienholder with incremental offer increases

NEGOTI TIATE TE F FINAL LIEN RESOLUTION B BEFORE RE THI HIRD P PART RTY SETTL TLEMENT

• After client signs release – no leverage against lienholder
• Before settlement everything is contingent: leverage rests with client and attorney
• ver whether or not they should accept onerous demands of lienholder

124

125

WHAT IS IT

 Right of subrogation  Right of reimbursement  Enforcement of statutory lien  “Letter of Protection”  Other contractual right

126

LETTERS OF PROTECTION

• “By signing a letter of protection the lawyer is taking a position that is

potentially in conflict with the client’s stated interest.” Another Look at Letters of Protection, Minnesota Lawyer, Aug 5. 2002.

• For thorough treatment of “ethical and legal pitfalls when asked to

assist clients in dealing with their difficult economic and medical issues in personal injury cases” see: Florida Bar Board of Governors, Opinion 02-4, April 2, 2004.

127

“MAKE WHOLE DOCTRINE”

• The make whole doctrine , generated by common law, holds that health

insurers should be reimbursed only where the injured plaintiff has been “made whole” in a settlement or judgment, and only to the extent that the settlement or judgment exceeds the “make whole amount”.

• EXAMPLE: Injury victim would be “made whole” by judgment or

settlement of $50,000. This injured party would only have to pay back the health insurer to the extent that the recovery exceeds $50,000.

128

NEGOTIATION POINTS

 Follow “Practice Strategies” in previous materials.  Notify health insurer of key events including trial , pretrial, mediation or

• ther ADR. Invite to participate.

 Alternative Dispute Resolution.  Interpleader of Health Ins. or Motion but only if case is clear.

129

CLIENT INVOLVEMENT

 Notify client of existence of language in health insurance contracts giving right of reimbursement if they are injured by a defendant and if they recover money from that defendant.  Make sure client understands up front – early in case. Bad surprises blamed on the attorney.  Paint insurer or plan as entity wearing “black hat”. Attorney is only explaining client‘s obligation to insurer.  Point out refusal to satisfy valid lien endangers client’s future health benefits and risks litigation by lienholder

130

CLIENT INVOLVEMENT

 Keep client informed as to possible outcomes. Encourage realistic

• expectations. If lien is adequately sizeable to endanger most or all of

settlement/judgment, client should know. May effect incentive to pursue case. Lienholder should be notified.  Provide literature regarding legal obligation underlying liens / rights of

• recovery. Provides third party authority for counterintuitive idea they

have to pay an insurance company back.  Here’s mine, feel free to print and use: [next page]

131

CLIENT INVOLVEMENT

LIENS O ON PERSO SONAL AL INJURY C CASE ASES Lik ike l locks on a n a gate, liens ns p prevent nt f fina nal set ettl tlemen ement o t of personal inj njur ury c y cases unti until th they y are re a addre resse ssed. http: p://w /www.att ttorney- myers.com/2 m/2013/0 /01/l /li ens ns-on-personal nal-injury- cases/

132