Resolving ERISA Liens and Reimbursement Claims in Personal Injury - - PowerPoint PPT Presentation

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

Resolving ERISA Liens and Reimbursement Claims in Personal Injury Cases

Maximizing Settlement Awards by Narrowing Claims and Challenging Unreasonable Charges; Effect of Montanile on ERISA Plan Rights

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific WEDNESDAY, SEPTEMBER 7, 2016

Franklin P . Solomon, Founding Partner, Solomon Law Firm, Cherry Hill, N.J. David L. Place, JD, Vice President, Director of Lien Resolution Services, Synergy Settlement Services, Culpeper, Va.

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RESOLVING ERISA LIENS AND REIMBURSEMENT CLAIMS IN PERSONAL INJURY CASES

STRAFFORD WEBINARS SEPTEMBER 7, 2016

Franklin P. Solomon • Cherry Hill, NJ

Employee Retirement Income Security Act of 1974

ERISA

6

ERISA Liens?

THERE IS NO SUCH THING AS AN “ERISA LIEN”

• ERISA is silent on liens and creates no

reimbursement rights for employee benefits plans

• Almost every health plan issued as an employee

benefit is subject to ERISA – but some are not.

7

ERISA Coverage

ERISA applies to:

 any employee benefit plan if it is established or maintained--

(1) by any employer engaged in commerce or in any industry or activity affecting commerce; or (2) by any employee organization or organizations representing employees engaged in commerce or in any industry or activity affecting commerce; or (3) by both.

29 USC Sec. 1003(a)

8

ERISA Exclusions

ERISA specifically excludes from coverage:

 any employee benefit plan if--

(1) such plan is a governmental plan .... (2) such plan is a church plan .... (3) such plan is maintained solely for the purpose of complying with applicable workmen's compensation laws or unemployment compensation or disability insurance laws; (4) such plan is maintained outside of the United States primarily for the benefit of persons substantially all of whom are nonresident aliens; or (5) such plan is an excess benefit plan and is unfunded.

29 USC Sec. 1003(b)

9

“Governmental Plan”

 Federal government (e.g., FEHBA, Tri-Care)  State & municipal government  Railroad Retirement Act  Indian tribal government  where substantially all work is in essential governmental

functions, not in commercial activities

29 USC Sec. 1002 (32)

10

“Church Plan”

 “Church plan” is a plan maintained by an organization

to provide employee benefits if such organization is controlled by or associated with a church.

 “Employee of a church” includes an employee of an

• rganization which is exempt from tax under section

501 of the IRC and which is controlled by or associated with a church. 29 USC Sec. 1002 (33) May include hospitals, nursing homes, schools, colleges, etc.

11

ERISA PREEMPTION

EXPRESS PREEMPTION: ERISA §514 COMPLETE PREEMPTION: ERISA §502

12

ERISA § 514(a): Preemption clause

... [T]he provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan ...

13

ERISA § 514(b)(A): “Savings” clause

... [N]othing in this subchapter shall be construed to exempt or relieve any person from any law of any State which regulates insurance, banking, or securities

14

ERISA § 514(b)(B): “Deemer” clause

Neither an employee benefit plan ... nor any trust established under such a plan, shall be deemed to be an insurance company or other insurer, bank, trust company, or investment company or to be engaged in the business of insurance or banking for purposes of any law of any State purporting to regulate insurance companies, insurance contracts, banks, trust companies, or investment companies.

15

FMC Corp. v. Holliday, 498 U.S. 52 (1990)

 Insured plans indirectly regulated by state law

regulating the plans’ insurers

 Self-funded plans exempt from state insurance

regulation; not altered by state law What’s a self-funded plan?

 Look at each plan component  Stop-loss insurance?

16

ERISA § 502: Civil enforcement

A civil action may be brought by:

 502(a)(1)(B): a participant or beneficiary to recover

benefits due under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify rights to future benefits under the terms of the plan;

 502(a)(3): by a participant, beneficiary, or fiduciary (A) to

enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms

• f the plan

17

Actions Under ERISA 502(a)(1)(b)

 Concurrent federal and state jurisdiction  Allows action only by a plan participant or

beneficiary

 “to recover benefits due to him under the terms of

his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan”

18

PLAN SUBROGATION & REIMBURSEMENT RIGHTS

19

The Insured Plan

 Most states have adopted anti-subrogation rules or

doctrines precluding reimbursement

 Extent of prohibitions varies state to state

 MT constitutional protection  NJ prohibited as a function of collateral source statute  NY statute prohibits claims by insurers  PA presumes settlement is full recovery  Many states allow for contracting out of anti-subro doctrines

 A few states have not adopted made-whole or other

anti-subrogation law

20

The Self-Funded Plan

 Form 5500 and Schedule A  Plan Document v. SPD

 Cigna v. Amara, 563 U.S. ___, 131 S.Ct. 1866 (2011)

 Subrogation v. Reimbursement  Interpreting the contract clause

 Plan year and date of injury  Conditional language  Abrogating the made-whole doctrine

 6th, 9th & 11th Circuits require explicit language

21

Actions Under ERISA 502(a)(3)

 Federal jurisdiction is exclusive  Claims by a participant, beneficiary or fiduciary  Allows only “appropriate equitable relief” to

enforce plan terms

 US Airways v. McCutchen, 133 S.Ct. 1537 (2013)

 Unjust enrichment not a defense to plan contract term  “Background equitable rules” apply if not expressly

contradicted by contract term

 Made-whole doctrine  Common-fund doctrine

22

“Appropriate equitable relief”

23

 Montanile v. Bd. of Trustees, Nat’l. Elevator Industry

Health Benefit Plan, 577 U.S. ___ (2016)

 Equitable claim and equitable relief  Equitable liens enforceable only against a specifically

identified fund in the defendant’s possession

 Expenditure of identifiable fund on non-traceable items

destroys equitable lien.

What public policy is promoted? What are the practical consequences?

Requesting Plan Documents

 Request must be to Plan Administrator/Sponsor

 Statutory responsibility to provide within 30 days  $110/day civil penalty available for non-compliance

29 U.S.C. § 1024(b)(4); 29 CFR § 2575.502c-3

24

What to request?



Plan Document (written instrument pursuant to 29 U.S.C. § 1102) in effect on date of injury;

 Any document amending, supplementing, or otherwise modifying the Plan Document;



Summary Plan Description and employee benefits booklet in effect at the time of injury

 All documents issued subsequently during any year in which benefits were paid



SPD Wrap Documents



Bargaining Agreement, Trust Agreement, Contract etc. under which Health Plan is established



Trust Agreement or other document establishing funding for the Plan



Annual Return/Report (IRS/DOL Form 5500), including all attached Financial Schedules



Administrative Services Agreement with any Third-Party Administrator for the Plan



An affidavit from the Plan Administrator attesting to self-funded status of the Plan



Complete statement of benefits paid to or on behalf of claimant/beneficiary



Specific plan component(s) paying benefits (e.g., health, dental, vision, AD&D, disability, etc.)



“Stop-loss” or excess/re-insurance coverage (insurer, policy numbers and attachment points)

25

SPD as Plan Document?

 Named fiduciary/ies with authority to control and

manage operation and administration of the plan

 Procedure for establishing and carrying out a funding

policy and method

 Procedure for allocation of responsibilities for the

• peration and administration of the plan

 Procedure for amending the plan, and for identifying

persons who have authority to amend

 Basis on which payments are made to and from the

plan

29 USC § 1102 - ERISA § 402

26

Issues

 Can SPD function as a § 402 Plan Document?  Can SPD include enforceable “terms of the plan”?  Can a Plan Document delegate authority to claims

administrator or SPD?

 Do plan amendments affect subro/reimbursement?

27

Third-Party Recovery Clause

 subrogation right  reimbursement right  first-priority claim  first-dollar recovery  lien  constructive trust  identified fund/amount  abrogate made-whole  abrogate common fund  conditional language

28

Thank You

FRANKLIN SOLOMON SOLOMON LAW FIRM, LLC 801 Kings Highway North Cherry Hill, NJ 08034 856-910-4311 fsolomon@franklinsolomonlaw.com

29

Dave Place, J.D. Vice President, Synergy Settlement Services Director Synergy Lien Resolution Services

ERISA Tips, Medicare Advantage Nightmare, and How To Obtain Medicare Refunds

ERISA: Practice Tips

31

Get What You Are Owed!

• 29 U.S.C §1024(b)(4) provides list of what the ERISA Plan Administrator must

provide upon request.

• Copy of the latest updated Summary Plan Description (SPD)
• The latest annual report
• Any terminal report
• The bargaining agreement
• The trust agreement, contract, or other instruments under which the plan is

established or operated.

• Administrative Services Agreement was subject to the ERISA disclosure

requirements as it is a document “that restrict[s] or govern[s] a plan's operation.” Shaver v. Operating Eng'rs Local 428 Pension Trust Fund, 332 F.3d 1198, 1202 (9th Cir. 2003), Hughes Salaried Retirees Action Comm. v. Administrator of the Hughes Non- Bargaining Retirement Plan, 72 F.3d 686, 690 (9th Cir. 1995); Grant v. Eaton, S.D. Miss, Civil Action No. 3:10CV164TSL-FKB; Fisher v. Metropolitan Life Ins. Co., 895 F.2d 1073, 1077 (5th Cir. 1990) Heffner v. Blue Cross and Blue Shield of Alabama, Inc., 443 F.3d 1330, 1343 (11th Cir. 2006).

32

Ask the Correct Party

29 U.S.C §1024(b)(4) is a requirement placed upon the “plan administrator”.

• Named on administrative page in SPD. If not named then default is plan

sponsor who will be employer or possibly a union.

• The Third Party Claims Administrator (TPA) is NOT the “plan administrator”.
• The recovery vendor or agent is NOT the “plan administrator”.
• Rawlings, Trover, Optum, Xerox, etc. will NEVER be the “plan administrator”.

33

Don’t Take Yes for an Answer!

• Often the plan administrator is unsophisticated and relies on their

TPA or recovery vendors to handle these matters.

• The TPA or recovery vendor may provide some of the required

documents, but they almost never provide all that is required by 29 U.S.C §1024(b)(4).

• Documents supplied by bill collectors are entirely self-serving, and

there is no penalty for providing misleading or inaccurate information to attorneys.

• Accept documents provided, most often the SPD and claims

summary.

• The demand for documents itself is burdensome to the plan

administrator, their TPA and recovery vendors. Do not let them off the hook.

• They have thirty (30) days to comply or face penalties.

34

Track Penalties

• 29 U.S.C. § 1132(c)(1)(b)
• Establish $100.00 per day penalty for failure to comply
• 29 CFR § 2575.502c-1
• Allows for this penalty to be increased to $110.00 per day
• Harris-Frye v. United of Omaha, (E.D. Tenn. Sept. 21, 2015) - Penalty $61,380.00
• Leister v. Dovetail, Inc., No. 05-2115, (C. Dis. Oct. 22, 2009) – Penalty $377,600.00
• Huss v. IBM Medical & Dental Plan, No. 07 C 7028, (N.D Dis.Ill. Nov. 4, 2009)–Penalty $11,440.00
• Law v. Ernst & Young, 956 F.2d 364, 375 (1st Cir. 1992)(affirming penalty of $100 per day)
• Gorini, 94 Fed. Appx. 913 (3rd Cir. 2004)(affirming an award totaling $160,780)
• Kollman v. Hewitt Assoc., 2005 WL 2746659 (E.D. Pa. 2005)($100 per day)
• Freitag v. Pan Am. World Airways, Inc., 702 F.Supp. 128, 132 (E.D. Vir. 1988)($100 per day)
• Tait v. Barbknecht & Tait Profit Sharing Plan, 997 F.Supp. 763 (N.D. Tex. 1998)($100 per day)
• Gatlin v. Nat. Healthcare Corp., 16 Fed. Appx. 283 (6th Cir. 2001)($100 per day)
• Kreuger Intl v. Blank, 225 F.3d 806, 811 (7th Cir. 2000)(affirming $100 per day)
• Brown v. Aventis Pharma., 342 F.3d 822, 825-826 (8th Cir. 2003)(affirming maximum penalty)
• Koegan v. Towers, Perrin, Forster & Crosby, 2003 WL 21058167 (D. Minn. 2003)($100 per day)
• Conger v. Univ. Marketing, Inc., 2000 WL 1818521 (D. Or. 2000)(($100 per day).

35

McCutchen – The “common fund” argument

36

“Common Fund” Abrogated? U.S. Airways v. McCutchen

“[If] the plan is silent on the allocation of attorney’s fees, []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 …” U.S. Airways v. McCutchen, 133 S. Ct. 1537, at 12 (2013) In explaining why the lower courts should be so unwilling to find unclear plan language abrogating this longstanding tradition in American jurisprudence the Court wrote: “The rationale for the common-fund rule reinforces [the] conclusion [that] [t]hird-party recoveries do not often come free: To get one, an insured must incur lawyer’s fees and expenses. Without cost sharing, the insurer free rides on its beneficiary’s efforts—taking the fruits while contributing nothing to the labor.” U.S. Airways v. McCutchen, 133 S.Ct. 1537 (2013)

37

“Common Fund” Abrogated? U.S. Airways v. McCutchen

Scalia’s dissent to McCutchen references the fact that at a lower court level all the parties conceded that the Plan language addressed attorney fees. “In their brief in opposition to the petition they conceded that, under the contract, ‘a beneficiary is required to reimburse the Plan for any amounts it has paid out of any monies the beneficiary recovers from a third-party, without any contribution to attorney’s fees and expenses.’” U.S. Airways v. McCutchen, 133 S.Ct. 1537(2013) Scalia’s dissent citing Brief in Opposition 5 (emphasis added); See Brief for Petitioner 18, and n. 6; Brief for Respondents 29; Brief for United State as Amicus Curiae 21.

38

“Common Fund” Abrogated? The Remand!

“Under the common-fund doctrine ‘a litigant or a lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney’s fee from the fund as a whole.’ US Airways, Inc. v. McCutchen, 133 S. Ct. at 1551 (quoting Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980)). ‘[I]f . . . injured persons could not charge legal costs against recoveries, people like [McCutchen] would in the future have every reason’ to make different judgments about bringing suit, ‘throwing on plans the burden and expense of collection.’ Accordingly, McCutchen is entitled to deduct his proportional fees and expenses that resulted in the recovery of the $10,000.00. U.S. Airways v. McCutchen, Case 2:08-cv-01593-DSC (emphasis added) (W .D. PA. March 16, 2016).

39

Montanile

40

Turbo Charged Subrogation

Montanile v. Bd. Of Trustees of the Nat. Elev., 577 U.S. ____ (2016)

• Holding

“We hold that, when a participant dissipates the whole settlement on nontraceable items, the fiduciary

cannot bring a suit to attach the participant’s general assets under §502(a)(3) because the suit is not one for ‘appropriate equitable relief’.”

• ERISA Plan moved too slow.

“The Board had sufficient notice of Montanile’s settlement to have taken various steps to preserve those

• funds. Most notably, when negotiations broke down and Montanile’s lawyer expressed his intent to

disburse the remaining settlement funds to Montanile unless the plan objected within 14 days, the Board could have—but did not—object. Moreover, the Board could have filed suit immediately, rather than waiting half a year.”

• Turbo Subro!

“[T]he nature of the Board’s underlying remedy would have been equitable had it immediately sued to enforce the lien against the settlement fund then in Montanile’s possession.”

41

Cooperate, don’t Capitulate!

Montanile v. Bd. Of Trustees of the Nat. Elev., 577 U.S. ____ (2016)

• Montanile executed a “reaffirmation” of the reimbursement language contained with

the ERISA Master Plan.

• Counsel placed the ERISA Plan on notice, both of the ongoing claim and the

eventual settlement.

• Counsel attempted goodfaith negotiations with the ERISA Plan to resolve their

repayment demand.

• When negotiations reached an impasse counsel provided written notice to the

ERISA Plan that funds would be disburse.

• Counsel provided the ERISA Plan with fourteen (14) days to object to the disbursal.
• There is no indication that an objection by the ERISA Plan should be treated as

veto to disbursal.

• “Even though the defendant’s conduct was wrongful, the plaintiff could not attach the

defendant’s general assets instead. … “[W]here a person wrongfully dispose[d] of the property of another but the property cannot be traced into any product, the other . . . cannot enforce a constructive trust or lien upon any part of the wrongdoer’s property.”.”

42

MAO Plans

43

Medicare Advantage

• Medicare Advantage Plans, sometimes called “Part C” or “MAO,” are offered by

private companies approved by Medicare. The MAO Plan provides all of Part A (Hospital Insurance) and Part B (Medical Insurance) coverage. MAO Plans may offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs. Medicare pays a fixed amount for your care every month to the companies offering MAO Plans. These companies must follow rules set by Medicare.

• As Medicare Advantage plans are administered by private insurance companies many
• f the difficulties that dealing with BCRC or CMS can entail are avoided. Though

these plans arguably have the same recovery rights as traditional Medicare, they are

• ften much more open to agreements based upon equity and fairness
• MAO Plans use the Medicare Secondary Payer Act as their recovery vehicle. That has

been a hot topic in lien resolution over the past few years but it seems the tide has turned in favor of the plans after In re Avandia Marketing, Sales Practices and Product Liability Litigation, 685 F.3d 353 (3d Cir. 2012), called Avandia II.

44

Medicare Advantage – Recovery Rights

• The Medicare Secondary Payer Act (MSP) provides for a private cause of action when a

primary plan fails to reimburse a secondary plan for conditional payments it has made. “there is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).” - 42 U.S.C. § 1395y(b)(3)(A).

• 42 C.F.R. §422.108(f) arguably extends the private cause of action to Medicare

Advantage Plans. “MAOs will exercise the same rights to recover from a primary plan, entity, or individual that the Secretary exercises under the MSP regulations in subparts B through D of part 411 of this chapter.”

• Additionally, CMS directors have issued memorandum asserting that:

“notwithstanding recent court decisions, CMS maintains that the existing MSP regulations are legally valid and an integral part of Medicare Part C and D programs.” - CMS, HHS Memorandum: Medicare Secondary Payment Subrogation Rights (Dec. 5, 2011).

45

Medicare Advantage – Lien Resolution

• Medicare Advantage Plans will use the same statutory formula to calculate their

repayment as CMS (Centers for Medicare and Medicaid Services).

• C.F.R. 411.37(c)
• Medicare payments are less than the judgment or settlement.
• Add (Attorney’s Fees) and (Costs) = Total Procurement Costs
• (Total Procurement Costs) / (Gross Settlement Amount) = Ratio
• Multiply (Lien Amount) by (Ratio) = Reduction Amount
• (Lien Amount) - (Reduction Amount) = Medicare Demand Amount
• C.F.R. 411.37(d)
• Medicare payments are equal to or exceed the judgment or settlement.
• Add (Attorney’s Fees) and (Costs) = Total Procurement Costs
• (Gross Settlement Amount) - (Total Procurement Costs) = Medicare

Demand Amount

46

Medicare Advantage – Attorney Liability

“In order to recover payment made under this subchapter for an item or service, the United States may bring an action against any or all entities that are or were required or responsible … to make payment with respect to the same item or service … under a primary plan. The United States may … collect double damages against any such entity. In addition, the United States may recover under this clause from any entity that has received payment from a primary plan or from the proceeds of a primary plan’s payment to any entity.” 42 U.S.C. § 1395y(b)(2)(B)(iii) “CMS has a right of action to recover its payments from any entity, including a beneficiary, provider, supplier, physician, attorney, State agency or private insurer that has received a primary payment.” 42 C.F.R. §411.24(g)

• United States v. Weinberg, 2002 U.S. Dist. LEXIS 12289 (E.E. Pa. July 1, 2002).
• United States v. Harris, 2009 U.S. Dist. LEXIS 23956 (N.D. W. Va. March 26, 2009) affirmed,

334 F. App’x 569 (4th Cir. 2009).

• Denekas v. Shalala, 943 F. Supp. 1073 (S.D. Iowa 1996).

47

Medicare Advantage - All Eyes on Florida

• In Humana Medical Plan, Inc. v. Western Heritage Ins. Co., No. 15-

11436 (11th Cir. Aug. 8, 2016), the 11th Circuit Court of Appeals affirmed

the U.S. District Court for the Southern District of Florida granting of Humana's Motion for Summary Judgment and held that Humana's right to reimbursement for the conditional payments it made on behalf of plan beneficiary under a Medicare Advantage Plan was enforceable. Additionally, Humana was entitled to double damages pursuant to 42 U.S.C. § 1395y(b)(3)(A).

• Western Heritage had an obligation to independently reimburse Humana.

Because it didn’t, the Court rule that as a matter of law, Humana is entitled to maintain a private cause of action for double damages pursuant to 42 U.S.C. § 1395y(b)(3)(A) and is therefore entitled to $38,310.82 in damages.

• The Eleventh Circuit said that placing the $19,155.41 in trust was not the

same as paying the MAO and that the damages “SHALL” be double.

48

Medicare Conditional Payments Post Final Demand Options

• Appeal
• Financial Hardship Waiver
• Compromise
• “Best Interest of the Program” Waiver

49

2016 Current Success Rate: 80% To date, Synergy has obtained: $3,007,902.00 in refunds back from Medicare since we began the service in 2014

2016 average refund is $27,946.22

50

Appeals

APPEAL LEVEL TIME LIMIT FOR FILING REQUEST MONETARY THRESHOLD TO BE MET

• I. Redetermination

120 days from date of receipt of the notice initial determination None

• 2. Reconsideration

180 days from date of receipt of the redetermination None

• 3. Administrative Law Judge

(ALJ) Hearing 60 days from the date of receipt

• f the reconsideration

At least $130 remains in controversy.

• 4. Departmental Appeals Board

(DAB) Review/Appeals Council 60 days from the date of receipt

• f the ALJ hearing decision

None

• 5. Federal Court Review

60 days from date of receipt of the Appeals Council decision or declination of review by DAB At least $1 ,260 remains in controversy.

51

Waiver & Compromise

52

Post Payment of Final Demand Waiver/Compromise

Involves application for a compromise or waiver to both the Benefits Coordination and Recovery Center (BCRC) as well as the Center for Medicare and Medicaid Services (CMS) There are three statutory authorities under which Medicare may accept less than the full amount of its claim: 1. §1870(c) of the Social Security Act – done by BCRC (Financial Hardship Waiver) 2. §1862(b) of the Social Security Act – done by CMS (Best Interest of the Program Wavier) 3. The Federal Claims Collection Act (FCCA) – done by CMS (Compromise) **If successful, a refund is issued by Medicare**

53

Financial Hardship Waiver

• §1870(c) of the Social Security Act;
• Pay the Final Demand amount and then attempt to obtain a partial
• r full waiver.
• Waiver of recovery should not be requested until the case is settled

and Medicare has issued a demand for repayment letter.

• Requests for waiver must be submitted in writing
• Medicare may grant a full or partial waiver if recovery would

negatively affect the beneficiary's standard of living compared to how it was before the accident/injury/illness.

54

Financial Hardship Waiver

“There shall be no recovery if such recovery would defeat the purposes of this chapter or would be against equity and good conscience.”

The Medicare Secondary Payer Manual does provide example situations of financial hardship that would justify a full or partial waiver consideration.

• “The beneficiary has spent the settlement proceeds and the only remaining

income from which the beneficiary could attempt to satisfy Medicare’s claim would be from the money that is needed for the beneficiary’s monthly living expenses;

• Beneficiary income and resources are at a poverty level standard
• An unforeseen severe financial circumstance- For example, waiver would be

appropriate if the beneficiary became legally responsible for their grandchildren.”

55

Hardship Letter

A Medicare beneficiary seeking a waiver or compromise of Medicare’s interest is required to submit a Hardship Letter to CMS for use in their evaluation process. Whenever possible this letter should be written by the beneficiary. The letter needs to express to CMS why repaying Medicare the amount of their Final Demand is “against equity and good conscience” and has/will create(d) an “undue hardship”.

1. Facts of Accident 2. Injuries – Physical, psychological, emotional 3. Current Physical, Mental, Emotional state 4. Unrecorded out of pocket expense a. House Renovation b. Adult diapers c. Prescriptions d. Private nurse or custodial care not paid by Medicare e. Co-insurance and deductible f. Accident related dental work g. Other financial obligations 5. Status of settlement proceeds. Exhausted? 6. Unforeseen financial circumstances---ex. become legally responsible for grandchildren. 7. Degree to which repayment would cause undue hardship 8. Reason why repayment is not justified.

56

Post-Settlement Compromise

• The Federal Claims Collection Act (FCCA)

CMS may suspend or end collection action on a claim when it appears that no person liable on the claim has the present or prospective ability to pay a significant amount of the claim or the cost of collecting the claim is likely to be more than the amount recovered.

• The cost of collection does not justify the enforced collection of

the full amount of the claim;

• There is an inability to pay within a reasonable time on the part of

the individual against whom the claim is made; or

• The chances of successful litigation are questionable, making it

advisable to seek a compromise settlement.”

57

“Best Interest of the Program” Waiver

• § 1862(b) of the Social Security Act;
• A separate and distinct evaluation than a request under §1870(c)
• f the Social Security Act (Financial Hardship Wavier) and a

request for a Compromise under the Federal Claims Collection Act (FCCA)

• The Secretary may waive (in whole or in part) the provisions of

this subparagraph in the case of an individual claim if the Secretary determines that the waiver is in the best interests of the program established under this title

58

Dave L. Place, J.D. Vice President, Director of Synergy Lien Resolution Services 911 Outer Road Orlando, FL 32814 dave@synergysettlements.com 407-279-4811

59