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UPDATE ON MEDICARE’S REPORTING REQUIREMENTS SC Self-Insurers Association, Inc. General Membership Meeting November 4, 2010 Daniel W. Hayes, Esquire. Updates since April 21-23, 2010 Members Only Forum: Various Alerts issued by CMS

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SC Self-Insurers Association, Inc.

General Membership Meeting

November 4, 2010

Daniel W. Hayes, Esquire


Updates since April 21-23, 2010 Members Only Forum:

    • Various Alerts issued by CMS
    • U.S. v. Stricker decision (filed September 30, 2010)


  • Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007
    • Section 111 of the MMSEA
      • What is the SCHIP?
        • “ State Children’s Health Insurance Program”
    • Purpose?
      • Safeguard against shifting burden for ongoing medical care from primary payer to Medicare
      • Section 111 is in addition to other MSP provisions (MSA allocation, etc.)
    • We’re interested in how it impacts Non-Group Health Plans (NGHPs)

What is reportable?

    • Settlements, judgments, and awards to Medicare recipients:
      • Because Medicare recipient, likelihood of:
        • conditional (past) medical payments and
        • Obligation for future medical payments (must consider MSA allocation, but reviewable by CMS only if amount of settlement > $25,000)
      • Applies if TPOC (Total Payment Obligation to Claimant) exists on or after 10/01/10
        • In general, TPOC = date settlement is signed, award/judgment filed
      • Also applies if ORM (Ongoing Responsibility for Medicals) exists on or after 01/01/10
    • What about mass torts, class actions settlements? (See U.S. v. Stricker)


  • CMS Memo: March 29, 2010
    • “Revised Implementation Timeline”
    • Two categories:
    • (1) Group Health Plan (GHP)
    • (2) Non-GHP, or NGHP
      • Liability Insurance (including Self-Insurance), No-Fault Insurance, and Workers’ Compensation

CMS Memo: March 29, 2010 (cont’d)

    • “Revised Implementation Timeline”
    • “Claim Input File” testing 01/01/10 – 12/31/10
    • System will go “live” 01/01/11
      • All initial claims must be submitted 01/01/11 to 03/31/11 according to assigned timeframes for RRE’s (Responsible Reporting Entities)

CMS Memo: April 6, 2010

    • Collection of HICNs, SSNs, and EINs
    • HICN: Medicare Health Insurance Claim Number
    • SSN: Social Security Number
    • EIN: Tax Identification Number (actually Employer Identification Number)
    • Collection of this information is proper for purposes of compliance with reporting requirements under Section 111


  • New MMSEA 111 Alerts since the Members Only Forum
    • May 27, 2010
    • June 14, 2010

MMSEA 111 Alert: 05/27/10

    • Alert for RRE’s of Liability Insurance (Including Self-Insurance), No-Fault Insurance, and Workers’ Compensation
    • RRE does not report regularly scheduled periodic payments, pursuant to statute, for obligation other than medical expenses
      • (Ex) weekly TTD; weekly payment of permanency award
      • But must separately report ORM (Ongoing Responsibility for Medicals)
      • Periodic “indemnity only” payments raises inference of ORM
      • Periodic payments not reported as TPOC (Total Payment Obligation to Claimant)

MMSEA 111 Alert: 06/14/10

    • RRE ID Accountability and Other Registration Material
      • What to do if RRD creates ID’s unintentionally
      • Each RRE ID requires full compliance
      • Use of agent by RRE
      • Changing information for RRE with COBC (Coordination of Benefits Contractor)


  • New NGHP (Non-Group Health Plan) Alerts since Members Only Forum
    • May 25, 2010
    • May 26, 2010 (x 3)
    • September 16, 2010

NGHP Alert: 05/25/10

    • New Direct Data Entry (DDE) Option for NGHP
    • Available for “Small Reporters”
      • RRE who expects to have only an occasional claim report to make
      • May only submit 500 or less claim reports per calendar year
      • If injured party’s information does not match a Medicare beneficiary, counts toward the 500 claims limit (essentially like a “51” disposition code)
      • DDE reporting may begin 01/03/11
      • No testing will be required

NGHP Alert: 05/26/10 (#1)

    • Revision to 02/24/10 Alert
    • Includes that entities with insurance plan with deductible are no longer required to report
      • Reported by entities’ insurer
      • Self-insured entities must continue to report
      • Whether TPA is considered RRE
        • Generally, NO
          • But see, state’s Assigned Claims Fund
        • Different under GHP arrangements, where TPA is the RRE

NGHP Alert: 05/26/10 (#2)

    • Risk Management Write-Offs for NGHPs
    • “reduction in the amount due as a risk management tool” constitutes liability self-insurance for purposes of Medicare Secondary Payer provisions
    • Intended by risk management to lessen probability of liability claim against it or facilitate/enhance good will
      • Provider reduces or W/O portion of charge to Medicare
      • Provide property of value to Medicare beneficiary where reasonable to expect will seek medical care

NGHP Alert: 05/26/10 (#3)

    • Clinical Trials & NGHPs
    • If payments are made by sponsors of clinical trials for complications or injuries arising out of the trials, considered payment by liability insurance (including self-insurance)
      • Must be reported

NGHP Alert: 09/16/10

    • Further definition of “Small Reporter” for purpose of Direct Data Entry (DDE)
    • Registration overview for DDEs
    • Further considerations for DDEs

United States of America v. James J. Stricker, et al.

    • “Memorandum Opinion Granting Certain Defendants’ Motions to Dismiss”
    • Filed with U.S. District Court N.D. of Alabama, 09/30/10
    • FN 1: “Not all defendants filed motions to dismiss. The court does not presume to know why . . . .”
      • “Accordingly, the decision set forth in this Memorandum Opinion and accompanying Order does not apply to those Defendants.”

U.S. v. Stricker

    • 2003 underlying class action tort settlement
      • Monsanto Company and its predecessors produced PCB’s (Polychlorinated biphenyls) at a chemical manufacturing plant one mile west of downtown Anniston, AL
      • The EPA determined PCB exposure could cause health dangers including cancer, decreased fertility, still births, and birth defects
      • 1000’s of toxic-tort actions filed in Alabama against Monsanto and predecessor companies

U.S. v. Stricker

    • All cases were consolidated in both Alabama state and federal courts
    • Global settlement reached on 08/20/03
      • $300 million
      • Involved combined total of more than 20,500 people
      • $275K placed in Court trust; remainder to be paid in annual installments through 2013
      • Conditions to release:
        • Funds released into attorney-maintained trust once 75% of adult plaintiffs signed releases
        • Could be disbursed to plaintiffs once court approved all minor settlements and 97% of releases signed

U.S. v. Stricker

    • Department of Justice filed suit 12/01/09 against plaintiff attorneys and defendant corporations/insurance carriers under Medicare Secondary Payer statute
    • Alleged 907 unnamed recipients also received Medicare payments for unidentified medical expenses related to PCB contamination
    • (Some) defendants filed Motion to Dismiss based upon statute of limitations

U.S. v. Stricker

    • Issues for Court:
    • (1) What SOL applies to each class of defendants (corporate defendants, plaintiff attorneys)?
    • (2) When did the government’s cause of action accrue for each class of defendants?

U.S. v. Stricker

    • MSPA does not include a SOL
    • Parties agreed SOL under the “Federal Claims Collection Act” would apply
      • 3 years if founded upon tort;
      • 6 years if founded upon contract

U.S. v. Stricker

    • Corporate Defendants:
    • No express contract between government and corporate defendants
    • Any reimbursement duties based solely on MSP statute
    • Liability, if any, arises out of defendants’ liability in tort settlement
      • “But for” the tort liability, no liability for reimbursement
      • So, 3 year statute of limitations applies under tort

U.S. v. Stricker

    • When did government’s cause of action accrue against corporate defendants?
    • Court focused on determining at what point did defendants’ responsibility to pay arise in relation to the underlying class-action settlement
    • For corporate defendants, accrued on date settlement agreement executed and approved by Court on 08/20/03
      • So even if 6 year SOL applied, government lawsuit filed 12/01/09 would have been barred

U.S. v. Stricker

    • Plaintiff Attorneys:
    • Conceded 6-year statute of limitations based upon contractual nature of attorney fees received from their clients
    • So, issue is when did government’s cause of action accrue against plaintiff attorneys?

U.S. v. Stricker

    • Government argued no responsibility to pay arose until 12/02/03, when all minor settlements were approved by court, 97% of plaintiffs had signed releases, and funds could be disbursed
      • DOJ lawsuit filed 12/01/09---one day prior to 6 years later
      • Settlement was “conditional”
    • The Court did not agree
      • 97% certification was “condition subsequent” to contract
      • Did not affect overall enforceability of settlement agreement

U.S. v. Stricker

    • Government’s right to intervene against plaintiff’s attorneys accrued no later than 10/29/03, when funds transferred from Court into attorneys’ escrow account
      • Lawsuit filed against plaintiff attorneys on 12/01/09 barred by 6-year SOL

Why is U.S. v. Stricker important?

    • Provides framework for calculating government’s statute of limitations for filing lawsuits to collect reimbursement
    • When applied in context of mandatory reporting requirements, may be able to calculate either 3-year or 6-year SOL’s based upon date of Total Payment Obligation of Claimant (TPOC), or when settlement agreement is signed (or award/judgment filed)
      • Likely 3-year SOL applicable to corporate defendants/carriers
      • Likely 6-year SOL applicable to plaintiff attorneys
    • Shows the government can be defeated on MSP lawsuits (but not over yet . . . )