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Complying with the Medicare Secondary Payer (“MSP”) laws and regulations is a difficult task for practitioners (plaintiffs and defense attorneys), claims managers and adjusters. The handling of a personal injury lawsuit has changed significantly with the passage of the Medicare and Medicaid SCHIP Extension Act, and this book not only traces the origins of the MSP Statute but provides bests practices for navigating the maze of contingent liabilities created by the Act.
Enacted on December 5, 1980, the "Medicare Secondary Payer Act" (Act) was without consequence for non-compliance until recently - most notably, when the electronic reporting requirements found in the Medicare & Medicaid SCHIP Extension Act (“MMSEA”) in 2007 became law. A game changer for the liability industry made up of lawyers, claimants, defendants (self insureds), insurance carriers, health care providers, third party administrators and other related parties, there can be no business as usual when resolving the liability case today that involves a Medicare beneficiary. Medicare Secondary Payer Compliance is designed to serve as a resource guide for anyone interested in learning where the potential pitfalls of the Act lay. The authors, highly versed in the complexities and nuisances associated with the Act, provide commentary and analysis based on the law as it is presently known and suggest approaches to consider when attempting to finalize the liability case. Mitigation of exposure to Medicare takes careful planning that must start upon receipt of the case and not after the parties have reached an agreement on a settlement figure.
In the past, defendants customarily assigned responsibility for Medicare reimbursement to the plaintiff and his or her legal representative as an afterthought when resolving the case. Protection for the defendant usually came in the form of an indemnity provision added to a general release. Regrettably, such hasty practices today would offer little in the way of protection from Medicare and in many instances increase exposure to the defendant. Likewise, a plaintiff or his representative would be hesitant today to take on such a responsibility alone when the law equally obligates the defendant and his insurance carrier as well. This is especially true when the amount owed to Medicare is in flux. The Act has been a real game changer for those involved in a liability case where the plaintiff is a Medicare beneficiary. Insurance carriers and self insureds responsible for paying losses must report certain required information about the liability case electronically to Medicare. Before this law, Medicare did not have the perfect knowledge, of all settlements, awards, and judgments involving Medicare beneficiary tort settlements. This new information will be used now to improve collections from the parties by Medicare for items and services it may have paid related to the injury as well as to suspend payment of future benefits. Perfect knowledge on the part of the government will create consternation for the liability industry and a perfect storm is brewing. The ability to promptly deliver the benefits of a settlement, award and judgment to a Medicare beneficiary will be delayed as practitioners today must now take certain steps to notify the government and track the amounts that Medicare has paid as well as resolve it before distribution of the proceeds. How this occurs is not clearly defined because everyone has equal responsibility to Medicare. The only solution is for the parties to cooperate, but it is a difficult challenge given the traditional adversarial relationship of the parties.
Medicare Secondary Payer Compliance is a "must" start to finish guide and commentary for anyone involved in a liability case where the Medicare Secondary Payer Act comes into play. The new requirements of the Act will not be easily absorbed by the liability industry. Practices developed over decades will need to change which will take some getting used to. Mistakes are bound to occur so extra vigilance is necessary to avoid legal liability. This book provides much needed guidance to assist the practitioner in this regard.
TABLE OF CONTENTS
Preface
Acknowledgment
About the Authors
Legal Disclaimer
CHAPTER ONE:
The Hard Facts About Medicare Secondary Payer
A. Entitlements and Reality -There is no free lunch!
1. Entitlement Programs - Social Security and Medicare
2. The Reality Created by Medicare
B. Historical Overview of the Act
1. Medicare Act (Established in 1965, effective July 1, 1966)
2. Omnibus Reconciliation Act (1980)
3. Common Law Development
a. Thompson v. Goetzman.
b. U.S. v. Baxter International
4. Medicare Modernization Act (2003)
5. The Medicare & Medicaid SCHIP Extension Act
(2007)(MMSEA)
C. The Advantage of CMS
1. Repayment Obligations
2. Jurisdiction Over CMS
3. Manuals, Memos, Alerts, Bulletins, Conference Calls, etc.
4. CMS is Given Deference
D. Medicare Benefits
E. The Roadmap for Finality
CHAPTER TWO:
Best Practices to Resolve Medicare Conditional Payments
A. Does the Liability Claim Involve a Medicare Beneficiary
1. Options for the Plaintiff
2. Options for the Defendant
B. How to Notify Medicare
1. Medicare Contractors
i. Coordination of Benefits Contractor
ii. Medicare Secondary Payer Contractor (MSPRC)
C. How to Obtain Conditional Payment Information
1. Notify COBC
2. Transmittal of Request to MSPRC
3. The Conditional Payment Letter
4. Relatedness Request
D. The Demand/Recovery Letter
CHAPTER THREE:
Disposition of the Case
A. Settlement
1. Medicare to be Included as Payee on the Check
2. Disbursement Amount and Timeline
3. Waiver of Medicare Beneficiary Private Cause of
Action Under 42 USC 1395y(b)(3)(A)
4. Identification of Injuries and Associated ICD-9 Codes
5. Disclosure of the Medicare Beneficiary's Rights of
Waiver, Compromise, Appeal and Procurement Costs
and Impact on Future Medicare Benefits
a. Waiver Option #1: §1870(c) Waiver:
Contractor-Based Waiver Decision Based
Upon Two Key Considerations
i. Financial Hardship
ii. Equity and Good Conscience
b. Compromise: Federal Claims Collection
Act - Handled by CMS Regional Offices.
The Medicare beneficiary may attempt at this
point to argue allocation based on fault
c. Waiver Option #2: §1862(b) Waiver: Only
CMS can Consider §1862(b) Waivers. It must
be in best interest of the Medicare Program and
is virtually never used
6. Cooperation Clause and Survival of Consent to
Release Form
7. Statement that the Plan has Exhausted Benefits
8. TPOC Amount and Date
9. Right to any Salvage from the Reimbursement Claim
(used when the claimant is unrepresented)
10. Waiver of Violation of Fair Claims Practices in
Regard to Distribution of Proceeds
B. Judgment or Award
1. Special Verdict Form
2. Post-trial Motions
3. Interpleader
CHAPTER FOUR:
Future Medical Care Considerations
A. The Liability Medicare Set Aside - Myth or Reality?
1. The Act and future medical considerations for
the liability industry
2. Liability settlements must address future medical
B. Suggested procedure for future medical considerations
CHAPTER FIVE:
The Case For The State Court's Role To Manage The
Medicare Secondary Payer Liability Claim
A. CMS as a Party to the Litigation?
B. What Can the Courts Do?
C. Extreme Amount of Communication with the Contractor
D. Scheduling Order
E. Impediments to the Process: How Can the Courts Help?
F. Can Medicare Bend to Consider Fault?
Hadden v. U.S
G. Making the Case for a Court Order Shaping Allocation
H. Without Court Involvement, Medicare Can Suspend Benefits
I. Post-Trial
J. Discovery
CHAPTER SIX:
The MSP Administrative Appeal Process
A. Federal Question Jurisdiction over CMS
B. Due Process of Law
C. Available Administrative Review
1. Waiver under Section 1870(c) of the Social
Security Act
2. Waiver under Section 1862(b) of the Social
Security Act
3. Waiver Request Based Upon Non-Relatedness
4. Compromise
D. Appealing CMS/MSPRC Denials for Request for Waiver
E. Judicial Review of an Agency Determination
CHAPTER SEVEN:
MMSEA Section 111 Reporting
A. Mandatory Insurance Reporting Background
1. Aliases of the Act
2. Who is Responsible for Compliance?
B. Steps of Compliance for Section 111
1. Registration
2. Testing and Claim Data Submission Timeframes
3. General Reporting Considerations under Section 111
a. TPOC Reporting
b. ORM Reporting
C. Section 111 Data
D. CMS Defined Mass Torts
E. What will Medicare do with Section 111 Data?
CHAPTER EIGHT:
Medicare and Technology
A. Mandatory Insurance Reporting
B. Common Working File
C. Confirmation of Medicare Beneficiary (Query Function)
D. MSPRC
E. Conditional Payment Information
F. ReMAS
Roy A. Franco is a principal of Franco Signor LLC, a Liability Medicare Secondary Payer Compliance group with offices located at 2746 Delaware Avenue, Kenmore, New York. Before joining the firm, Mr. Franco worked for Safeway Inc., a Fortune 50 grocery retailer at its corporate offices located in the San Francisco Bay Area. During his 15 year career with Safeway Roy was the Director for the Company's self administered liability claims operation. Having well over 1700 retail facilities in 26 states as well as a complement of distribution centers and manufacturing plants, there was no lack in the variety and type of tort claim that fell within his area of responsibility. Mr. Franco has been engaged with the liability industry to promote awareness and support for reform of the Medicare Secondary Payer Act. Mr. Franco has advocated change on three levels: Legislative, Regulatory and Common Law Advocacy and through the Medicare Advocacy Recovery Coalition (MARC) which was formalized into a coalition as of November of 2008. Mr. Franco is presently co-chairman of MARC, and he assists large companies and insurers with developing protocol for their claims operations.
Jeffrey J. Signor is a principal of Franco Signor LLC, a Liability Medicare Secondary Payer Compliance group with offices located at 2746 Delaware Avenue, Kenmore, New York. Prior to taking on Mr. Signor responsibilities, Mr. Signor was a partner for one of the Northeast's most respected civil litigation defense firms, Goldberg Segalla LLP. At his prior position, Jeff's specialty was in litigation and appellate practice. Mr. Signor has a number of published opinions before the New York Appellate Division that have brought him recognition amongst his peers in the advocacy arena. Over the last year, Mr. Signor has exclusively focused his practice on Medicare Secondary Payer Act Compliance, negotiating the cooperation between the plaintiff and defendant to mitigate exposure under the Act and its related regulations. As a nationally recognized expert, Jeff regularly publishes and speaks on the topic of the Medicare Secondary Payer Compliance.
