COURT RULES THAT THE PARTIES MSA ADEQUATELY PROTECTED MEDICARES INTEREST IN COMPLIANCE WITH THE MEDICARE SECONDARY PAYER ACT

Published on May 16, 2012 in Uncategorized. Closed Tags: , , , .

In Frank v. Gateway Insurance Co., No. 6:11-0121, 2012 U.S. Dist. Lexis 33581 (W.D. La. Mar. 12, 2012), the plaintiff received a settlement in a personal injury action stemming from a workplace accident that required surgery. At the time of the settlement, his future Medicare covered medical expenses, including physician visits and pharmaceutical costs, were estimated to be $3,200. After the settlement, the court set a hearing to determine the need for and amount of a Medicare Set Aside (“MSA”) for purposes of complying with the MSP Act.  The court notified CMS of the hearing.  However, CMS advised the court that it would not participate in the hearing. In a letter to the court, CMS stated that “CMS does not review or verify counsel’s determination of whether or not there is a recovery for future medical services or counsel’s determination of the amount to be held to protect the Medicare Trust Fund except under limited circumstances. In this particular matter, CMS would neither participate nor review the parties’ determination of whether a set aside was needed or the amount of the set-aside.” Therefore, the court was forced to determine whether an MSA was needed.

The court found that the plaintiff was required to reimburse Medicare for all conditional payments, regardless of when they were made. The sum of those payments was $4,352.67. Additionally, the court determined that an MSA was required in the amount of $3,200 to cover the plaintiff’s reasonably foreseeable medical expenses that would otherwise be paid for by Medicare in the future. With respect to unforeseen medical expenses, the court held that the plaintiff must not bill Medicare until the funds he received in the settlement were exhausted.

This case is another example of how CMS will not often intervene to assure compliance with the MSP Act. Litigants are thus forced to request judicial intervention to ensure compliance with the MSP.

Date of Decision: March 12, 2012
Frank v. Gateway Insurance Company, No. 6:11-0121, 2012 U.S. Dist. Lexis 33581 (W.D. La. Mar. 12, 2012)

COURT RULES THAT LEGAL MALPRACTICE INSURER IS NOT AN RRE, AND THEREFORE, NOT SUBJECT TO THE REPORTING REQUIREMENTS UNDER MMSEA

Published on May 15, 2012 in Uncategorized. Closed Tags: , , .

In Oregon State Bar Prof’l. Liab. Fund v. U.S. Dept. of Health and Human Serv’s., No. 03:10-CV-1392-HZ, 2012 U.S. Dist. LEXIS 43790 (D.O.R. Mar. 29, 2012), the court held that a legal malpractice insurance carrier is not a Responsible Reporting Entity (RRE) under the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA). The Oregon State Bar Professional Liability Fund (OSBPL) filed an action against the U.S. Department of Health and Human Services (DHHS), seeking: (1) a declaration that the PLF is not an RRE under the MMSEA; (2) that Secretary Sebelius violated the Administrative Procedure Act by determining that the OSPLF was an RRE; and (3) judicial review of the Secretary’s determination regarding the OSPLF’s reporting requirements. The DHHS countered that the language of the statute is clear and that, because “liability insurance” is included within the definition of an applicable plan, the OSBPLF is an RRE.

The court reviewed the scope and purpose of the MMSEA, noting that “[a]pplicable plan was expressly defined to include liability insurance” and that the OSBPLF is “liability insurance.”
However, the court held that, because the OSBPLF provides “legal malpractice insurance,” it does not cover claims for “bodily or emotional injuries,” such as the claims covered by Medicare. As such, the OSBPLF will never have primary responsibility for paying for “items or services claimed by a Medicare beneficiary,” as required to be an RRE under the MMSEA.

DHHS argued that a malpractice claim involving a personal injury case could involve medical expenses paid conditionally by Medicare. While the court agreed with this assertion, it held that in such a case the OSBPLF would not have primary responsibility to pay for the claimant’s medical injuries. Moreover, the court found that there would be a significant time lag from when an injury occurs to when the OSBPLF pays out a claim. The court stated that although Medicare authorized conditional payments following an accident, it is unlikely that Congress expected reimbursement from legal malpractice insurers. Therefore, the court held that the OSBPLF is not a liability insurance plan upon which Congress imposed reporting requirements under the MMSEA.

This case provides some assistance in deciphering the language of the MMSEA. While this decision represents a bright-line rule and may provide guidance to entities that are unsure of their status as an RRE, it is very limited in scope. Therefore, the decision may not provide substantial direction to certain liability insurers that fall somewhere between a malpractice carrier and one that insures against personal injury.

Date of Decision: March 29, 2012
Oregon State Bar Prof’l. Liab. Fund v. U.S. Dept. of Health and Human Serv’s., No. 03:10-CV-1392-HZ, 2012 U.S. Dist. LEXIS 43790 (D.O.R. Mar. 29, 2012).
 

PETITION FOR A WRIT OF CERTIORARI FILED IN HADDEN v. UNITED STATES

Published on May 14, 2012 in Uncategorized. Closed Tags: , , , .

On March 30, 2012, Medicare Advocacy Recovery Coalition (MARC) filed a petition for a writ of certiorari before the United States Supreme Court in Hadden v. United States, 661 F.3d 298 (6th Cir. 2011). The petition seeks review of whether the government is entitled to a full reimbursement under the Medicare Secondary Payer Act when a beneficiary compromises the tort claim and receives a reduced settlement. In Hadden, the United States Court of Appeals for the Sixth Circuit held that the government is entitled to the complete reimbursement of its conditional payments regardless of the fact that the beneficiary received a reduced recovery based on the fault allocated to the tortfeasor.  Click here to see a discussion of the Sixth Circuit’s decision. In Bradley v. Sebelius, 621 F.3d 1330 (11th Cir. 2010), the United States Court of Appeals for the Eleventh Circuit held that where a beneficiary settles for a percentage of the total tort claim, the government’s reimbursement should be proportionately reduced, similar to the beneficiary’s recovery.

The following organizations have filed amicus briefs in support of the petition: Retail Litigation Center, Inc., Workers’ Compensation Section of the State Bar of Michigan, Property Casualty Insurers Association of America, et al., and DRI – The Voice of the Defense Bar. The government’s response is due on or before June 4, 2012. 

This issue is particularly important because Medicare’s current policy is that CMS is entitled to a full recovery of its conditional payment regardless of the fact that a beneficiary’s settlement can be significantly reduced to reflect the defendant’s exposure under tort liability concepts. Medicare’s current position hampers the settlement process by not only delaying settlements until the parties can obtain the MSP reimbursement figure but also increasing the settlements to fully reimburse the MSP claim.

CMS IMPLEMENTS PROCEDURE TO PROVIDE A FINAL CONDITIONAL PAYMENT BEFORE SETTLEMENT IF CERTAIN CRITERIA ARE MET

Published on May 10, 2012 in Uncategorized. Closed Tags: , , .

On February 21, 2012, CMS implemented an option that allows Medicare, in some cases, to provide a final conditional payment amount before settlement. This option involves beneficiaries and/or their representatives self-calculating the final conditional payment amount. 

In order to use this option, ALL of the following criteria must be met:

1. the liability insurance (including self-insurance) settlement, judgment, award, or other payment must be for a physical trauma based injury (the settlement does not relate to ingestion, exposure, or medical implant);
2. the total liability settlement, judgment, award, or other payment is expected to be and ultimately is $25,000 or less;
3. the Date of Incident occurred at least six months before the beneficiary or his/her representative submits the self- calculated final conditional payment amount to Medicare for review; and
4. the beneficiary demonstrates that treatment has been completed and no further treatment is expected, by:
             a. a written physician attestation, OR
             b. a written certification provided by the beneficiary that

(1) no medical treatment related to his/her case has occurred for at least 90 days prior to submitting the self-calculated final conditional payment amount to Medicare, AND
(2) he/she expects no further care related to his/her case.

The beneficiary will be asked to give up the right to appeal the amount or existence of this debt.  However, the beneficiary will keep the right to pursue waiver of recovery. 

CMS provides instructions on how a beneficiary or his/her representative can calculate the final conditional payment amount.  After the beneficiary submits his/her self-calculated amount, within 60 days, the MSPRC will inform the beneficiary whether it agrees or disagrees with the self-calculated amount.  If the MSPRC agrees with the Self-Calculated Conditional Payment Amount, it will send a letter informing the beneficiary that the amount is considered final, as long as the beneficiary settles within 60 days of the date of the MSPRC’s letter and the settlement is $25,000 or less.  If the MSPRC disagrees with the Self-Calculated Conditional Payment Amount, but the beneficiary is otherwise eligible for the process, the MSPRC will send the beneficiary a Medicare Amended Final Conditional Payment Amount. This letter will inform the beneficiary that the amount it calculated will be considered final, as long as the beneficiary settles within 60 days of the date of the MSPRC’s letter and the settlement is $25,000 or less. 

MSPRC advises that this option is best exercised when the beneficiary has a current conditional payment letter from the MSPRC and is nearing settlement of the case.

Firm Attorney Speaks at Trucking Law Seminar

Published on February 24, 2012 in Uncategorized. Closed

Jay Barry Harris, Esquire of Fineman Krekstein & Harris and Chuck Perry, Corporate Director of Claims of Knight Transportation spoke at the DRI Trucking Law Seminar in Scottsdale, Arizona.  They discussed recent developments in the case law, and recent CMS Alerts and Regulations impacting the primary payer’s ability to settle cases with represented and unrepresented Medicare beneficiaries and frequently encountered settlement scenarios providing practical solutions to these potentially difficult situations.
 
Please click here to view a copy of the paper which was published by DRI for the Trucking Law Seminar and click here to view the Power Point that was used with the presentation at the seminar.  Should you have any questions regarding issues related to settling with a Medicare beneficiary, please feel free to contact Jay Harris at jharris@finemanlawfirm.com or 215-893-8704.