Personal Injury Claims and the Personal Injury Claims and the - - PowerPoint PPT Presentation

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Personal Injury Claims and the Personal Injury Claims and the Medicare Secondary Payer Act

Strategies for Claims Settlement to Mitigate MSP and Section 111 Liability Risks

T d ’ f l f

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific THURS DAY, OCTOBER 27, 2011

Today’s faculty features: Jeremy T . Burton, Partner, Williams, Montgomery & John, Chicago John Randall Whaley, Partner, Neblett Beard & Arsenault, Alexandria, La. S ylvius H. Von S aucken, Chief Compliance Officer, Garretson Resolution Group, Cincinnati

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Today’s Agenda

1 M di

I R ti d MSP C li

2 1 Medicare Insurer Reporting and MSP Compliance

Legislative and Case Law Updates g p

3 Release Language, Strategies and Practice Tips

5

Personal Injury Claims & Medicare Secondary Payer Act j y y y

September 28, 2011 Sylvius H. von Saucken y Garretson Resolution Group svs@garretsongroup.com 513.794.0400

MSP: The Medicare Secondary Payer Act

History… y

• MSP – December 5, 1980
• Medicare in 2003
• MMA 301 (expanded liability)
• MMA 301 (expanded liability)
• Medicare in 2006-07
• Changes in MSPRC
• Medicare Part D
• Medicare in 2008-09
• MMSEA (eff. 7-1-09)

( )

• 10/1/10 – no fault
• 10/1/11 - liability
• New CP procedures (eff 10/1/09)

7

• New CP procedures (eff. 10/1/09)
• MSP Reforms (HR 1063)

2011 MSP Compliance = 2 Obligations

“What do you mean by closing the loop?”  REPORTING OBLIGATION [2010 2011]  REPORTING OBLIGATION [2010-2011]

• Accountable Party is the Defendant

 RESOLUTION OBLIGATION [1980; 1995]

• Accountable party is plaintiff/claimant/counsel.

 Involves both past payments made (conditional payments)  And screening to ensure future costs of care are not shifted over to Medicare. (Medicare Set Asides)

8

s ted o e to ed ca e ( ed ca e Set s des)

2011 MSP Resolution = 2 Obligations “Consider and Protect” Medicare’s interests

 Past Interest (Date of Injury to Date of Settlement)  Past Interest (Date of Injury to Date of Settlement)

• Verify and resolve conditional payments

 Future Interest (Date of Settlement Onward) Future Interest (Date of Settlement Onward)

• Determine IF an MSA is appropriate under the

case/claim specific facts AND document the file p

• By making this determination:
• Medicare’s future interest considered and protected
• Parties are MSP compliant (statute and regs)
• Claimant’s Medicare benefits are protected

9

The Big Shift

All this change is causing…

• …shift away from reliance on “indemnification” clauses alone…
• …to affirmative obligation to address liens before disbursing as

condition of settlement condition of settlement What it means…

• Requires starting much earlier
• Requires formal verification of entitlement

q

10

When Rules Change, So Must the Game Plan Old Post-Settlement Continuum

Medicare / Agreement On Settlement Medicare / Medicaid Preservation (Trusts / Set Amount ( Asides) Disbursement Structured Lien

11

Structured Settlement Paperwork Reimbursement

New Settlement Continuum

Medicare / Medicaid Preservation (Trusts / Set- Asides) Lien Resolution Agreement On Settlement Structured Settlement P k Amount Paperwork

12

Disbursement

Avoiding Confusion & Disruption…

Understanding the Medicare reimbursement system. Understanding the Medicare reimbursement system. What is a conditional payment and how can it disrupt the ordinary settlement process if not accounted for. Focus on injury-related medical expenses conditionally paid by Medicare (personal injury cases). The pre- and post-12/5/80 conundrum. Opening the tort recovery record as a condition precedent to payment by settling party. Proof of payment a condition for settling party Proof of payment a condition for settling party.

13

Collaboration in Practice

6 step process to get money 6 step process to get money flowing after settlement:

1. Settlement agreement contains representations and warranties 2 Pl i tiff h id t t d h b d ith M di 2. Plaintiff shares evidence tort recovery record has been opened with Medicare (i.e. results of entitlement search) 3. Defendant pays settlement proceeds to counsel 4 Counsel agrees to hold back all net proceeds until conditional payment 4. Counsel agrees to hold back all net proceeds until conditional payment amount received from Medicare (not necessary to hold back attorney fees/expenses because Medicare allows offsets for those) 5 Counsel then holds back conditional payment amount plus reasonable buffer 5. Counsel then holds back conditional payment amount plus reasonable buffer and distributes balance 6. After final resolution, plaintiff provides proof of satisfaction back to defendant

14

P l I j Cl i & Th Personal Injury Claims & The Medicare Secondary Payer Act Medicare Secondary Payer Act

d d b Wednesday, September 28, 2011

J.R. Whaley jrwhaley@nbalawfirm.com 1-800-256-1050

Preliminary Questions y

• Has your client been a Medicare beneficiary?

Has your client been a Medicare beneficiary?

• Is your client presently on Medicare?

SS ?

• SSDI?
• Applied for SSDI?

J.R. Whaley jrwhaley@nbalawfirm.com 1-800-256-1050 16

Reporting Obligations of a Liability S ttl t Settlement

• Report to COBC information about the claim

Report to COBC information about the claim (Medicare number, injury, date of injury).

• Consent forms/proof of representation to
• Consent forms/proof of representation to

MSPRC. Ad l d d di li

• Adverse unrelated payments and dispute lien

amounts.

• Report the settlement.

J.R. Whaley jrwhaley@nbalawfirm.com 1-800-256-1050 17

Plaintiff Attorney Should (Must): y ( )

• Report to COBC

Report to COBC.

• Report to MSPRC.

h li

• Pay the lien.

J.R. Whaley jrwhaley@nbalawfirm.com 1-800-256-1050 18

Failure to Make the Appropriate P t Payment

• If Medicare is forced to litigate to receive

If Medicare is forced to litigate to receive reimbursement of conditional payments, double the amount is due plus interest double the amount is due, plus interest.

• Attorney has direct liability for

reimbursement reimbursement.

• Client may lose Medicare coverage and Social

S i ff b fi Security may offset benefits.

J.R. Whaley jrwhaley@nbalawfirm.com 1-800-256-1050 19

Personal Inj ury Claims and the Medicare S econdary Payer Act

Jeremy T. Burton 312.443.3284 jtb@willmont com jtb@willmont.com

21

Reporting Requirements p g q

The new law, Section 111 of the Medicare, Medicaid The new law, Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA Section) “Add d t ti i t ith t “Adds mandatory reporting requirements with respect to Medicare beneficiaries who have coverage under group health plan arrangements as well as for g p p g Medicare beneficiaries who receive settlements, judgments, awards or other payment from liability insurance, no-fault insurance,

• r

workers’ insurance, no fault insurance,

• r

workers compensation.”

22

Reporting Requirements p g q

The administrator of any liability insurance plan must report money paid pursuant to any settlement, p y p p y , judgment, award

• r
• ther

payment. 42 USC 1395y(b)(8)(F). Liability insurance is defined as coverage that indemnifies or pays on behalf of the policyholder or self-insured entity against clams

• f

negligence, inappropriate action, or inaction which results in injury or illness to an individual or damage to j y g property.

23

Reporting Requirements - Timeline p g q

Implementation dates for the new law were originally January 1 2009 for group health plans to register and January 1, 2009 for group health plans to register and July 1, 2009 for liability insurers to register. Insurers must report all claims with settlement dates

• n or after October 1, 2011.

In certain cases where an insurer has

• ngoing

responsibility for medical claims claims arising after responsibility for medical claims, claims arising after January 1, 2010 must be reported.

24

Reporting Requirements - Timeline p g q

Medicare beneficiaries who receive a liability settlement judgment award or other payment settlement, judgment, award or other payment have an obligation to refund associated conditional payments within 60 days

• f receipt
• f such

payments within 60 days

• f receipt
• f such

settlement, judgment, award, or other payment. If Medicare is not reimbursed by the beneficiary, payment becomes the responsibility of the primary payer.

25

Reporting Requirements - Penalties p g q

The CMS has a right of action to recover its payments from any entity including a beneficiary payments from any entity, including a beneficiary, provider, supplier, physician, attorney, State agency or private insurer that has received a agency or private insurer that has received a primary payment. 42 CFR Sec. 411.24(g)

26

Reporting Requirements - Penalties p g q

If Medicare is not reimbursed as required by paragraph (h) of this section the primary payer paragraph (h) of this section, the primary payer must reimburse Medicare even though it has already reimbursed the beneficiary or other party. already reimbursed the beneficiary or other party. 42 CFR Sec. 411.24(i) 4 4 4( )

27

Reporting Requirements - Penalties p g q

The United States can collect double damages and attorneys fees against any entity not paying under the y g y y p y g new statute. F rthermore Furthermore, An applicable plan that fails to comply with the pp p p y Medicare reporting requirements is subject to a civil money penalty

• f

$1,000 for each day

• f

noncompliance with respect to each claimant 42 USC noncompliance with respect to each claimant. 42 USC

• Sec. 1395y(b)(8)(E)(i)

28

Medicare Query – Form A y

Create a Medicare Query Form and make it part of the Create a Medicare Query Form and make it part of the discovery process. A Medicare Query form allows you to determine whether Medicare is seeking recovery of a lien for the plaintiff beneficiary a lien for the plaintiff beneficiary. The A-1 form used in Illinois simply asks if the p y plaintiff has ever been enrolled in Medicare Part A or B, and contains sections for the plaintiff’s full name, Medicare Claim Number, Date

• f

Birth, Social Medicare Claim Number, Date

• f

Birth, Social Security Number and Sex.

29

Medicare Query – Form B y

At the time settlement is finalized, you should submit an additional form to Medicare (Form B). submit an additional form to Medicare (Form B). Medicare Form B requires all

• f

the same information contained in the A-1 form as well as i f ti th t M di i h th information that Medicare requires such as the diagnosis code for the plaintiff’s illness, the name

• f the settling defendant, the date of settlement,
• f the settling defendant, the date of settlement,

the amount of settlement and information on the funding of settlement. By court order, Form B is q i d t b k t fid ti l b th l i tiff required to be kept confidential by the plaintiffs, defendants and their clients.

30

S ettlement Agreements g

(1) Defendant will not include any agency of the U.S. Government or its designee as a payee on the settlement h k check. (2) PLAINTIFF'S FIRM agrees to hold in its trust account sufficient funds to pay all Medicare claims or liens account sufficient funds to pay all Medicare claims or liens relating to such settlement, claim and legal action or has in fact satisfied all Medicare claims

• r

liens in full. PLAINTIFF'S FIRM will notify the U S Government or its PLAINTIFF S FIRM will notify the U.S. Government or its designee, including CMS, of any settlement which this Agreement governs and will work to satisfy or otherwise

• btain discharge or release of any Medicare claim or lien

l d d f g y including "set asides," if any.

31

S ettlement Agreements g

(3) If defendant receives a claim for any unsatisfied Medicare claim or lien by lawsuit or

• therwise, relating to the above-described settlements, claims and legal actions, defendant will

notify PLAINTIFF'S FIRM by regular mail and request from them any evidence that the claim

• r lien has been satisfied in full which defendant will provide to the governmental authority or
• r lien has been satisfied in full which defendant will provide to the governmental authority or

its designee. If such evidence is not forthcoming or fails to resolve the claim in full without payment by defendant, defendant may by regular mail notify PLAINTIFF'S FIRM to undertake the principal response to the matter or to arrange payment or other resolution. If the U.S. government or its designee including CMS brings suit, PLAINTIFF'S FIRM will undertake the principal defense of such matter whether joined by the U.S. government or its p p j y g designee including CMS or joined by defendant through third party claim or

• therwise.

PLAINTIFF'S FIRM will not undertake to represent defendant as its client. PLAINTIFF'S FIRM will be liable to defendant for the amount owed or paid by such defendant to the United States Government or its designee including CMS for the allegedly unsatisfied Medicare claim

• r lien plus all attorney fees and out of pocket expenses reasonably necessary and incurred to

bt i j d t ttl t f PLAINTIFF'S FIRM f th t d h d B

• btain judgment or settlement from PLAINTIFF'S FIRM for the amount due hereunder. By

consenting to entry of judgment for any amounts due to defendant pursuant to this agreement, PLAINTIFF'S FIRM may cut off liability to defendant for any attorney fees and out

• f pocket expenses incurred after the date of such judgment. PLAINTIFF'S FIRM will not be

liable to defendant for any attorney fees and out of pocket expenses to defend the claim brought by the U S government or its designee including CMS brought by the U.S. government or its designee including CMS.

P l I j Cl i & Th Personal Injury Claims & The Medicare Secondary Payer Act Medicare Secondary Payer Act

d d b Wednesday, September 28, 2011

J.R. Whaley jrwhaley@nbalawfirm.com 1-800-256-1050

Section 111 Cases

• Section 111 Requires extensive information including beneficiary SSN or

HICN for Defense to report claim HICN, for Defense to report claim

• Seger v. Tank Connection, LLC, Docket No. 8:08CV75, 2010 U.S. Dist.

LEXIS 49013 (D Neb Apr 22 2010) LEXIS 49013 (D. Neb. Apr. 22, 2010) – Court finds discovery requests for SSN and Medicare card reasonable based on Section 111 reporting requirements, and specifically the “query process”

• Hackley v. Garofano, 2010 Conn. Super. LEXIS 1669 (Sup. Ct. Ct. July 1,

2010) – Carrier allowed to withhold settlement payment until Plaintiff provides – Carrier allowed to withhold settlement payment until Plaintiff provides SSN and other data needed for Section 111 Reporting

Sylvius von Saucken svs@garretsongroup.com 1-888-556-7526

J.R. Whaley jrwhaley@nbalawfirm.com 1-800-256-1050 33

U.S. v. Stricker

• United States of America v. Stricker, et al., No. 09-2423 (N.D. Ala. September

30 2010) 30, 2010) – Government sued plaintiffs lawyers, defendants and insurers. – Court grants Motions to Dismiss on basis of 42 U.S.C. 2415 – Federal Claim Collection Act Limitations Periods – Court adopts three year period against Defendants and Insurers, based upon 28 U.S.C. 2415(b) and tort nature of the underlying claim – Court adopts six year period against Plaintiffs’ lawyers, based upon 28 U.S.C. 2415(c) and contract nature of the underlying relationship

• Motion for Reconsideration for later claims and later settlement payments –

p y recently decided against government

Sylvius von Saucken svs@garretsongroup.com 1-888-556-7526

J.R. Whaley jrwhaley@nbalawfirm.com 1-800-256-1050 34

New Concerns for Defendants: U S St i k U.S. v. Stricker

• Why all the fuss? (Medicare’s SOL)

Why all the fuss? (Medicare s SOL)

• Case Overview (8‐2003 ‐ 12/1/09 ‐ 9/30/10)
• Effect:

Effect:

• United States Government seeks recovery from the

insurers and the other settling parties for funds insurers and the other settling parties for funds paid as settlement proceeds in a mass tort liability settlement

Sylvius von Saucken svs@garretsongroup.com 1-888-556-7526

J.R. Whaley jrwhaley@nbalawfirm.com 1-800-256-1050 35

New Concerns for Settling Parties: Eff t f U S St i k Effects of U.S. v. Stricker

• Raises timing concerns re: Medicare compliance in

Raises timing concerns re: Medicare compliance in light of this recent complaint/dismissal, especially when coupled with new MMSEA “settlement reporting” requirements for insurers

• So, does putting Medicare’s name on the check fix

this problem?

• If not, who should resolve the liens?

Sylvius von Saucken svs@garretsongroup.com 1-888-556-7526

J.R. Whaley jrwhaley@nbalawfirm.com 1-800-256-1050 36

MSA Case Law – MSA Appropriate Schexnayder (2011 LEXIS 83687) Schexnayder (2011 LEXIS 83687)

• Court found LMSA for $239,253.84 was

Cou t ou d S

• $ 39, 53.8

as

• reasonable. Why?
• Parties agreed to set funds aside for MSA; created allocation;

g submitted to CMS for review/approval as condition of settlement.

• No response from CMS

Why?

• No response from CMS – Why?
• Joint motion for declaratory judgment to approve settlement.
• Court ratified what parties had already determined Therefore
• Court ratified what parties had already determined. Therefore,

MSA was created by the parties themselves, not the court.

Sylvius von Saucken svs@garretsongroup.com 1-888-556-7526

J.R. Whaley jrwhaley@nbalawfirm.com 1-800-256-1050 37

37

MSA Case Law – CMS Review/Approval Smith (2011 LEXIS 90428) Smith (2011 LEXIS 90428)

• Court found WCMSA for $14,647 was reasonable.

Cou t ou d C S

• $

,6 as easo ab e. Why?

• Parties agreed to set funds aside for MSA; created allocation;

g submitted to CMS for review/approval as condition of settlement.

• CMS declines opportunity to review

Why?

• CMS declines opportunity to review – Why?
• Joint motion for declaratory judgment to approve settlement.
• Court ratified what parties had already determined Therefore
• Court ratified what parties had already determined. Therefore,

CMS future interests protected without requiring CMS approval.

Sylvius von Saucken svs@garretsongroup.com 1-888-556-7526

J.R. Whaley jrwhaley@nbalawfirm.com 1-800-256-1050 38

38

MSA Case Law – MSA Not Appropriate Finke (2009 WL 6326944) Finke (2009 WL 6326944)

• Liability settlement where Court found no

y LMSA needed to properly consider and protect Medicare’s future interest. Why?

• Plaintiff identified/satisfied Medicare conditional payment
• bligation.
• Plaintiff covered by private insurance going forward

(spouse’s policy).

• Therefore, no LMSA needed to reasonably consider and

protect Medicare’s future interest.

Sylvius von Saucken svs@garretsongroup.com 1-888-556-7526

J.R. Whaley jrwhaley@nbalawfirm.com 1-800-256-1050 39

39

H.R. 1063 – The SMART Act

Goal = Improve the current MSP system  Issues

• Parties hesitant to resolve claims without knowing

conditional payment reimbursement amount

• The current system involves significant delays

 Following the MSP Enhancement Act (which died in cmmte), the SMART Act would: the SMART Act would:

• Permit pre-settlement Cond Payment reports from Mcare;
• Establish a timeline for receipt of those reports;

p p ;

• Change the admin. remedies (appeals to fed d. ct);
• Provide reporting safe harbors & reimb. thresholds;

40

• Change the SSN requirements for MMSEA; and
• Set a 3 year SOL.

MSP and Congress – One step closer to reform

Hearing on the Hill – June 22, 2011  House Sub Committee hears from stakeholders on all side  House Sub-Committee hears from stakeholders on all side

• CMS (CFO, D. Taylor)
• Self-insureds & insurers (Publixx, Cin. Insur. Co.)
• Self insureds & insurers (Publixx, Cin. Insur. Co.)
• Plaintiff’s counsel (Pennsylvania atty)

 Questions addressed

• Is the MSP system working for the taxpayers?
• Does Congress need to provide additional MSP tools?
• What is the current scope & capacity of the MSPRC?
• What is the current scope & capacity of the MSPRC?
• Are there amounts CMS will not chase?
• Should there be a minimum threshold?

41

• Should there be a minimum threshold?

The Takeaways

1. Improve Case / Claims Intake Process 2. Internal Education – Attorneys and Staff 3. Educate Your Clients 4 U d t F A t What can I do now to implement a comprehensive strategy for 4. Update Fee Agreement 5. Seek Third Party Assistance p gy healthcare compliance in my firm

• r company?

42

Improve Case / Claims Intake Process In every case, the parties must… In every case, the parties must…

Determine the parties’ affirmative obligations (verify, notify, p g ( y, y, resolve, report, satisfy, etc.); Assess third party recovery rights (Medicare, Medicaid, private, ERISA, etc.); Audit and analyze all reimbursement claims to “carve out” items unrelated to claims; Decide who should pursue relevant administrative or legal p g remedies, such as damage allocation, waivers, and compromises, to ensure the appropriate “net” recovery for the injured individual; and Address other healthcare-related settlement issues, such as the propriety of Medicare Set Asides (MSAs).

43