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MEDICARE SET ASIDES : Medicare and Personal Injury Settlement Tips

MEDICARE SET ASIDES : Medicare and Personal Injury Settlement Tips. Twin Cities Claims Association November 9, 2010. THE GOOD, THE BAD, AND THE UGLY. 2008 STATISTICS. 45.2 million covered by Medicare; 37.8 million aged 65 and older; 7.4 million disabled;

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MEDICARE SET ASIDES : Medicare and Personal Injury Settlement Tips

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  1. MEDICARE SET ASIDES:Medicare and Personal Injury Settlement Tips Twin Cities Claims Association November 9, 2010

  2. THE GOOD, THE BAD,AND THE UGLY

  3. 2008 STATISTICS • 45.2 million covered by Medicare; • 37.8 million aged 65 and older; • 7.4 million disabled; Total benefits paid in 2008 = $462 billion 2009 Annual Report of The Board of Trustees

  4. THE GOOD

  5. MEDICARE Medicare settlement compliance can involve two obligations: • Discharge of Medicare’s claim from the date of injury through date of settlement. • Evaluation and discharge of Medicare’s interest from the date of settlement forward.

  6. CONSIDER FORSETTLEMENTS Your Goal: To substantially comply, in good faith, with the obligation to reasonably consider Medicare’s future interest* * even though you know Medicare does not currently offer much in the way of guidance!

  7. MEDICARE:CONSIDER FOR SETTLEMENTS • Is Medicare or SSDI involved? • Nature and type of injury; • Previous/subsequent injuries/incidents; • Past reports of treating doctors; • Chart notes of treating doctors; • Obtain report from treating doctor? • Demand letter; • IME; • Past depositions and statements; • Other doctors; • SSDI documents; • Fault; YOUR GOAL: To comply in good faith with the obligation to reasonably consider Medicare’s future interests.

  8. MEDICARE:SETTLEMENT AGREEMENT • Fault; • Causation; • Other accidents; • Supportive Medicals; • Lack of Medicals; • Photographs; • Treating and IME doctor notes; • Supplemental Reports; • “P will not submit…”; • Indemnity, hold harmless ; • “P has asserted…”; • “P’s doctors would testify”; • “In order to consider Medicare we have…”; • Exact Terms of Set Aside; • Cannot use “canned” releases for these cases. • If you thought about it and it explains your position you should • include it in Settlement Agreement.

  9. MEDICARE:SETTLEMENT AGREEMENT • “No federal law or regulations mandate a MSA and the parties agree that Medicare’s interest my be properly considered without one.” • “Nevertheless, the plaintiff agrees to take actions necessary to ensure Medicare’s interests are properly considered.”

  10. MEDICARE:SETTLEMENT AGREEMENT • “The plaintiff and her attorneys agree to satisfy all Medicare interests, claims and liens.” • “Using proceeds from this settlement, past Medicare claims have been satisfied.”

  11. MEDICARE:SETTLEMENT AGREEMENT • “Plaintiff and her attorneys agree to reserve the funds necessary to cover any interest asserted by Medicare related to this settlement.” • “The plaintiff understands that it is her responsibility to properly consider Medicare’s interests.” • List of consequences if plaintiff fails to properly consider Medicare (refusal to pay, recovery claim, etc.).

  12. MEDICARE:SETTLEMENT AGREEMENT • “The plaintiff holds harmless defendant and insurer from any liability associated with Medicare/CMS asserting any right…” • “CMS has not issued guidance for the proper way to consider Medicare’s interests in a liability settlement at this time.”

  13. MEDICARE:SETTLEMENT AGREEMENT • “Nevertheless, the parties have acted in good faith to substantially comply…” • “It is not the purpose of this settlement agreement to shift to Medicare the responsibility for accident-related expenses.”

  14. MEDICARE:SETTLEMENT AGREEMENT • “Plaintiff agrees to ensure that future medical expenses involving Medicare are reasonably addressed.” • Plaintiff understands that this settlement agreement may not be binding on the Federal Government…” • Liability for work-related injuries should not be shifted to Medicare but: THIS IS NOT A WORK-RELATED INJURY

  15. THE BAD

  16. MEDICARE The United States of America v. Harris 2009 W.L. 891931 (N.D.W.V.)

  17. AND THE UGLY

  18. Medicare SecondaryPayer Statute 42 U.S.C. § 1395y(b)(2)(A)(ii): (A) In general Payment under this subchapter may not be made [if]: (ii) payment has been made, or can reasonably be expected to be made [under] an automobile or liability insurance policy or plan (including a self-insured plan) or under no fault insurance.

  19. Medicare SecondaryPayer Statute 42 U.S.C. § 1395y(b)(2)(A)(ii): (b) Medicare as secondary payer (cont.) In this subsection, the term “primary plan” means … an automobile or liability insurance policy or plan (including a self-insured plan) or no fault insurance, …. An entity that engages in a business, trade, or profession shall be deemed to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance, or otherwise) in whole or in part.

  20. CODE OF FEDERAL REGULATIONS 42 CFR § 411.50: (b) Definitions. Liability insurance means insurance (including a self-insured plan) that provides payment based on legal liability for injury or illness or damage to property. It includes, but is not limited to, automobile liability insurance, uninsured motorist insurance, underinsured motorist insurance, homeowners' liability insurance, malpractice insurance, product liability insurance, and general casualty insurance.

  21. CODE OF FEDERAL REGULATIONS 42 CFR § 411.50: (b) Definitions. Self-insured plan means a plan under which an individual, or a private or governmental entity, carries its own risk instead of taking out insurance with a carrier.

  22. Medicare SecondaryPayer Statute 42 U.S.C. § 1395y(b)(2)(A)(ii): (ii) Primary Plans. A primary plan, and an entity that receives payment from a primary plan, shall reimburse [Medicare] for any payment made … if it is demonstrated that such primary plan has or had a responsibility to make payment …. A primary plan's responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon the recipient's compromise, waiver, or release … (whether or not there is a determination or admission of liability)

  23. CODE OF FEDERAL REGULATIONS 42 CFR § 411.24: (g) Recovery from parties that receive primary payment. CMS has a right of action to recover its payments from anyentity, including a beneficiary, provider, supplier, physician, attorney, State agency or private insurer that has received a primary payment.

  24. CODE OF FEDERAL REGULATIONS 42 CFR § 411.24: (i) Special rules.  (1) If Medicare is not reimbursed as required by paragraph (h) of this section, the primary payer must reimburse Medicare even though it has already reimbursed the beneficiary or other party.

  25. Medicare SecondaryPayer Statute (iii) Action by United States (cont.) The United States may, in accordance with paragraph (3)(A) 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.

  26. MEDICARE The United States of America v. Stricker, et al. CV-09-KOB-2423-E (N.D. Ala.)

  27. THE STANDOFF

  28. THREE AMIGOS

  29. Medicare SecondaryPayer Statute

  30. Medicare SecondaryPayer Statute Once a claimant is identified as a Medicare beneficiary: • Create a claim file with Medicare through the Coordination of Benefits Contractor (COBC) by telephone (1-800-999-1118) and letter sent via fax (734-957-9598) and to: MEDICARE - COBCMSP Claims Investigation ProjectP.O. Box 33847Detroit, MI 48232

  31. Medicare SecondaryPayer Statute Once the COBC creates a claim file: • The Medicare Secondary Payer Recovery Contractor (“MSPRC”) sends a Conditional Payment Letter (“CPL”) -itemization of benefits paid by Medicare - within 65 days MSPRC – NGHP P.O. Box 138832 Oklahoma City, OK 73113 1-866-677-7220

  32. Medicare SecondaryPayer Statute Negotiate Conditional Payments with the MSPRC • One-way street v. two-way street • Notice of Representation • Consent to Release • Eliminate Medicare payments not related to the claimed injury • Updated Conditional Payment Letter – 90 days • Final Demand Letter • Pay within 60 days

  33. Medicare SecondaryPayer Statute Mandatory Insurer Reporting – Section 111 • Responsible Reporting Entities (“RRE”) must report claims involving Medicare beneficiaries at the time of settlement, judgment, award or other payment • Electronic reporting https://www.section111.cms.hhs.gov • $1,000 per day penalty for failure to report • First calendar quarter of 2011 (January – March 2011)

  34. THE GOOD, THE BAD,AND THE UGLY

  35. MEDICARE SET ASIDES:Medicare and Personal Injury Settlement Tips Twin Cities Claims Association November 9, 2010

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