Monthly Archive for February, 2011

REVISED IMPLEMENTATION DATE FOR THE DIRECT DATA ENTRY REPORTING OPTION FOR NGHP RREs

Published on February 28, 2011 in Uncategorized. Closed Tags: , .

In a recent alert posted on the Center for Medicare and Medicaid’s (CMS) website, CMS announced that the implementation date for the Direct Data Entry (DDE) reporting option that may be used by Liability Insurance (Including Self-Insurance), No-Fault Insurance and Workers’ Compensation (collectively referred to as Non-Group Health Plan) RREs on the Section 111 Coordination of Benefits Secure Website has been changed from March 1, 2011 to July 11, 2011. The DDE Option is available to “Small Reporters,” which is defined by CMS as an RRE that will submit 500 or fewer NGHP claim reports per calendar year. 

The revised DDE implementation date does not change the retroactive reporting requirements of January 1, 2010 associated with claim reports of ongoing responsibility for medicals (ORM) and October 1, 2010 associated with no-fault insurance and workers’ compensation Total Payment Obligation to the Claimant (TPOC) amounts.  Further, the revised DDE implementation date does not apply to NGHP RREs submitting claim reports via Claim Input Files.

Please click here to see the Alert.

NEBRASKA COURT REDUCES MEDICAID LIEN IN SETTLEMENT

Published on February 14, 2011 in Uncategorized. Closed

In Smalley v. Nebraska Department of Health and Human Services, a Nebraska state court held that the Department’s claim for reimbursement of Medicaid expenses was limited to a percentage of the settlement amount as related to the reasonable value of the plaintiff’s total claim in a personal injury case.  In Smalley, the plaintiff and tortfeasors participated in a mediation, which resulted in an settlement offer in the amount of $805,000.00.  Attorneys for the Department participated in the mediation pursuant to the request of the plaintiff’s attorney.  At the time, the Department, which is responsible for administering Medicaid in Nebraska, had not authorized payment of any of the plaintiff’s medical claims.  The Department took the position that it should be reimbursed in full for the amounts paid through Medicaid.  Nebraska law provides that an application for Medicaid constitutes an automatic assignment of rights to pursue or receive payment from any party liable to the costs of medical care or services arising out of an injury. 

The Department contributed $130,000.00 to the settlement to satisfy the medical claims that had been incurred by the plaintiff, which was deposited with the court clerk pursuant to the stipulation of the parties.  Allegedly, there was an agreement between the plaintiff and the Department that the plaintiff would reimburse the Department for the amounts paid through Medicaid if the Department would help facilitate a settlement by paying the plaintiff’s outstanding medical bills.

The plaintiff subsequently filed an amended complaint adding the Department as a defendant, and requesting the following relief: (1) a judgment declaring that the Department did not have a lien on the proceeds of the plaintiff’s personal injury action and only had a subrogation claim to the portion of the claim that an allocation hearing determined to be the amount of the claim allocated to medical expenses; (2) a judgment that the Nebraska statute as interpreted by the Department was unconstitutional to the extent it allowed the Department to impose a lien on compensation for damages other than medical expenses in violation of the federal anti-lien statute; (3) a judgment enjoining the Department from imposing a lien on the proceeds of the plaintiff’s personal injury action and from enforcing Nebraska statutes in manner that violated federal law.  The Department later filed an answer and counterclaim to the plaintiff’s complaint, requesting a judgment in the amount of $130,000.00 as partial reimbursement from the funds held in escrow by the court. 

The court applied Arkansas Department of Health and Human Services. v. Ahlborn, 547 U.S. 268 (2006), which held that the federal Medicaid law’s anti-lien provision prohibited states from imposing liens “against the property of any individual prior to his death on account of medical assistance paid . . . on his behalf under the state plan” and did not authorize a lien on the settlement in an amount exceeding Medicaid’s pro rata share of the settlement amount.  At the time of trial in Smalley, the only evidence the court received with regard to the total value of the plaintiff’s claim was the testimony of the plaintiff’s attorney, who estimated the value to be between 6 and 20 million dollars.  The court accepted the testimony and valued the total amount of the plaintiff’s claim at 6 million dollars. 

Using the same calculation used by the court in Bradley v. Sebelius, United States Court of Appeals for the Eleventh Circuit, No. 09-13765 (Sept. 29, 2010), to calculate a Medicare lien in a personal injury settlement, the court took the settlement amount ($805,000.00) and divided it by the full claimed value ($6 million) to come up with a percentage of 13.4.  Accordingly, the court found that the Department was entitled to a reimbursement in the amount of $17,420.00.  Additionally, the court held that Nebraska’s third-party liability provisions were unenforceable to the extent that they would impose liens in excess of the Department’s pro rata portion of the settlement.  It enjoined the Department from imposing any claim of lien on the $130,000.00 held by the clerk beyond the $17,420.00 amount.

This is another case that leads to the question of whether a similar approach could be taken with respect to Medicare recovery actions.  A similar argument could be made as to the one made in Smalley to try to persuade a judge to reduce Medicare’s interest.  Currently, Medicare has the right to recover conditional Medicare payments from settlements, judgments, awards, or other payments for funds that are not attributable to past medical expenses.  In order to facilitate settlement with a Medicare beneficiary, Medicare must be willing to adjust the amount it seeks to recover in cases where the parties reach settlement.

Smalley v. Nebraska Department of Health and Human Servs., No. C108-81, District Court of Cass County, Nebraska (Dec. 30, 2010).

Date of Decision: December 30, 2010

MEDICARE ADVANTAGE ORGANIZATIONS HAVE NO RIGHT TO BRING REIMBURSEMENT ACTIONS UNDER THE MEDICARE SECONDARY PAYER ACT

Published on February 13, 2011 in Uncategorized. Closed Tags: , .

Medicare Advantage Plans are health plans administered by Medicare-approved private insurance companies or Medicare Advantage organizations.  Medicare pays a fixed amount to the Medicare Advantage organization for the beneficiary’s care every month.  Title 42 C.F.R. § 422.108(f) granted Medicare Advantage organizations “the same rights to recover from a primary plan, entity, or individual that the Secretary exercises under the MSP regulations.”  Many people assumed this included the right to file a recovery action under 42 U.S.C.
§ 1395y(b)(2)(B)(iii). 

However, the United States District Court for the Southern District of Florida in Humana Medical Plan, Inc. v. Reale recently held that only the United States, through the Department of Justice, is able to bring an action for reimbursement.  No. 10-21493, 2011 U.S. Dist. LEXIS 8909 (S.D. Fla. Jan. 31, 2011).  Only the United States is vested with authority to bring an action for reimbursement, not the Secretary.  See 42 U.S.C. § 1395y(b)(2)(B)(iii).  Under 42 U.S.C. § 1395y(b)(2)(B)(i), the Secretary’s authority is limited to making payments “conditioned on reimbursement to the appropriate Trust Fund.”  Because the Secretary does not have the authority to bring an action for reimbursement, a Medicare Advantage organization cannot claim the right under 42 C.F.R. § 422.108(f).

While the Secretary and Medicare Advantage organizations, pursuant to 42 C.F.R. § 422.108(f), do not have authority to bring actions for reimbursement, they have other rights under the Medicare Secondary Payer Act.  For example, the Secretary and Medicare Advantage organizations can suspend benefits when there is a reasonable expectation of payment by a primary plan related to a medical expense.  Additionally, they both have the right to be repaid conditional payments when a primary plan’s responsibility is demonstrated and the power to demand payment and charge interest beginning 60 days after notice that a primary plan responsibility for such payment.  We can expect Medicare Advantage organizations to take advantage of their rights under the Medicare Secondary Payer Act.  They will mostly likely have to enforce these rights in state court because there is no federal question jurisdiction pursuant to 28 U.S.C. § 1331.   

Should this case be appealed, the 11th Circuit will likely affirm the district court’s decision.