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Medicare Secondary Payer and Negligence Lawsuits an Overview Patricia J. Foltz Anderson, Rasor & Partners, LLP June 21, 2013. Medicare’s Right of Recovery. Statutory reimbursement right Medicare is secondary to all types of liability insurance, including self-insurance.

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Medicare Secondary Payerand Negligence Lawsuitsan OverviewPatricia J. FoltzAnderson, Rasor & Partners, LLPJune 21, 2013


Medicare s right of recovery
Medicare’s Right of Recovery

Statutory reimbursement right

Medicare is secondary to all types of liability insurance, including self-insurance.

Medicare may make “conditional payments” while a claim is pending and/or before a claim is filed. If a claim is pursued and resolved that resolution must include reimbursement of Medicare for expenses related to the claim.

This has been known as a “Medicare Lien”.


The process for plaintiff
The Process for Plaintiff

  • The accident/incident happens

  • The Medicare Beneficiary gets treatment from hospitals/doctors

  • The hospital/doctor submits claims to Medicare and is reimbursed

  • The Beneficiary makes a negligence claim

    • Formal Lawsuit

    • Pre suit claim to insurer


The process for plaintiff1
The Process for Plaintiff

  • Plaintiff or their representative/lawyer notifies the Coordination of Benefits Contractor (COBC) of the injury/incident and the claim.

  • MSPRC (Medicare Secondary Payer Recovery Contractor) issues a Rights and Responsibilities letter.

    • Attorney must file proof of representation.

  • MSPRC creates a Tort Recovery Record


The process for plaintiff2
The Process for Plaintiff

  • MSPRC identifies Medicare paid medical claims related to the case and issues a “Conditional Payment Letter” (CPL)

    • This is often simply all payments after date of incident.

  • The plaintiff/beneficiary may challenge claims that are not related to the case. Sometimes called a relatedness review.

  • You can update the CPL every 90 days


The process for plaintiff3
The Process for Plaintiff

  • Case settles/verdict for plaintiff

  • Plaintiff/beneficiary, attorney for plaintiff and/or authorized representative must notify MSPRC the settlement information

    • Settlement amount

    • Date

    • Attorney’s fees

    • Costs


The process for plaintiff4
The Process for Plaintiff

MSPRC identifies final payment amount, calculates amount owed (crediting procurement costs) and issues Demand Letter.

Payment due within 60 days of Demand Letter or interest accrues

If not paid within 60 days MSPRC issues an Intent to Refer Letter

If not paid within 60 days of Intent letter referred to Treasury for collection.


The process for plaintiff5
The Process for Plaintiff

After the Demand Letter there is a route to appeal or request waiver.


Sanctions
Sanctions

If plaintiff/plaintiff’s representative/plaintiff’s lawyer does not address the “lien” Medicare can sue any one of them to recoup the “lien” amount.

Failure to pay “lien” may result in double damage.


The process for defendant s insurer
The Process for Defendant’s Insurer

RRE = Responsible Reporting Entity (aka insurer)

RRE becomes aware of lawsuit or claim

RRE obtains baseline information to query MMSEA (Medicare, Medicaid and SCHIP Extension Act of 2007) system.

RRE queries Medicare through MMSEA system to see if the plaintiff is a beneficiary

RRE should re query if case is close to trial or settlement


The process for defendant s insurer1
The Process for Defendant’s Insurer

If plaintiff is a Medicare recipient the insurer and defendant’s lawyer should deal with the Medicare Lien during settlement discussions.

Plaintiff/Plaintiff’s lawyer must deal with Medicare.

If the injury is continuing hen plaintiff must deal with reimbursement of Medicare in the future.


Future payments by medicare
Future Payments by Medicare

  • Medicare Set Asides clearly apply to Worker’s Compensation cases

    • A formal process applies

  • CMS clearly believes that non Worker’s Comp cases also must address future payment

  • Dealing with future medicals for a Medicare beneficiary is in flux

    • May resolve outside the formal set aside process


The process for defendant s insurer2
The Process for Defendant’s Insurer

  • Insurer must report claim through MMSEA if:

    • Plaintiff is a Medicare Recipient at time claim is resolved and money has been paid

  • Claim report includes 130 data fields. Key fields are ICD9 codes and injury codes

    • Basis of relatedness analysis

    • Consider addressing in settlement negotiations

  • What is unclear?

    • What if plaintiff will become a Medicare recipient and require care for continuing injury


Responsibility for medicare lien
Responsibility for Medicare “lien”

Insurer is primarily responsible to Medicare for reimbursement

If Insurer pays beneficiary/beneficiary’s attorney they become responsible to pay Medicare

This does not relieve insurer of liability for payment. Medicare can still pursue the insurer.


Sanctions1
Sanctions

Double damages for unpaid lien

$1000 per day for failure to report claims

Not dealing with Medicare lien where your client has provided care for the alleged injuries can lead to False Claims Act issues which include criminal sanctions.


Alternatives
Alternatives

Pay 25 % of settlement of $5000 or less

Pay nothing if settlement $300 or less

Self-calculate lien on settlement of $25,000 of less

All of these have caveats


What about medicare part c and d
What About Medicare Part C and D?

Part C is Medicare Advantage, the Medicare HMO

Part D is prescription drug coverage

Both C and D involve a capitated payment by Medicare to a part C or D provider who assumes the risk of costs above that capitated payment

Both C and D work more as true “liens” not statutory rights of recovery. See, 42 CFR 422.108 and 42 CFR 423.462. The Part C providers bill the third parties themselves. Part D providers advise the COBC.


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