Monthly Archive for October, 2011

CMS TO IMPLEMENT NEW FIXED PERCENTAGE PAYMENT OPTION TO RESOLVE MEDICARE LIENS IN CERTAIN LIABILITY SETTLEMENTS

Published on October 31, 2011 in Uncategorized. Closed Tags: , , .

The MSPRC recently announced that CMS will implement a new payment option for beneficiaries who receive certain types of liability insurance settlements of $5,000 or less to resolve Medicare’s recovery claim.  A beneficiary who elects this option will be able to resolve Medicare’s lien by paying Medicare 25% of his/her total liability insurance settlement instead of using the traditional recovery process.  In order to quality for this option, the following criteria must be met:
1. The liability insurance (including self-insurance) settlement is for a physical trauma based injury. (This means that it does not relate to ingestion, exposure, or medical implant); and
2. The total liability settlement, judgment, award, or other payment is $5000 or less; and
3. The beneficiary elects the option within the required timeframe and Medicare has not issued a demand letter or other request for reimbursement related to the incident, and
4. The beneficiary has not received and does not expect to receive any other settlements, judgments, awards, or other payments related to the incident.
The new option will be available on November 7, 2011.  A full explanation, including instructions on how and when to elect the option, will be available on MSPRC’s website on November 7, 2011.

Beneficiaries may not be willing to pay a quarter of a small settlement to Medicare, especially where the beneficiary is represented by an attorney and will have to pay attorney’s fees from those settlement proceeds.  It does not appear that this option provides a reduction for procurement costs.

Click here to see the MSPRC announcement.

DISTRICT COURT REVIEWS AND APPROVES PARTIES' LMSA

Published on October 6, 2011 in Uncategorized. Closed Tags: , , , , , .

In a recent order by the United States District Court for the Eastern District of Arkansas, the court approved the parties’ Liability Medicare Set Aside (“LMSA”) amount to cover the plaintiff’s future medical treatment for accident-related injuries that would otherwise be covered by Medicare.  The plaintiff had sued seeking damages associated with a permanent and disabling injury to his right hand while working as a truck driver aboard a floating barge.  The parties reached a settlement agreement where plaintiff agreed to compromise and discharge all claims against defendant in the liability suit and all claims under the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. § 901 et seq., against the employer and workers’ compensation carrier in exchange for a total payment of $1,000,000.00. 

The plaintiff was a current recipient of Social Security Disability benefits, and therefore, he was Medicare eligible.  To protect Medicare’s interest in the settlement, the parties agreed to establish an LMSA and retained the Garretson Resolution Group to determine an LMSA amount to cover the future cost of plaintiff’s accident-related medical treatment.  The proposed LMSA was submitted to CMS for approval, but CMS refused to review it due to “workload issues.”  Instead, the parties filed a motion with the court to review and approve the proposed LMSA.  The court approved the proposed LMSA finding that the parties had reasonably considered and protected Medicare’s interest in the settlement and that the LMSA amount fairly and reasonably took Medicare’s interest into account. 

It seems likely that CMS will refuse to review the majority of LMSA’s submitted for third-party liability settlements.  By having a court review and approve a proposed LMSA, parties can obtain some assurance that the amount set aside is sufficient and meet their good faith obligations.

Date of Decision: August 9, 2011
Smith v. Marine Terminals of Arkansas et al., No. 3:09-CV-00027 (E.D. Ark. Aug. 9, 2011).

MEDICARE CONSIDERS ITS FUTURE INTEREST SATISFIED WHERE TREATING PHYSICIAN CERTIFIES TREATMENT IS COMPLETED AND FUTURE MEDICAL SERVICES WILL NOT BE REQUIRED

Published on October 4, 2011 in Uncategorized. Closed Tags: , , , , , .

In a recent memorandum, CMS issued its first guidance with respect to the use of Liability Medicare Set-Aside Arrangements (LMSA) amounts related to liability insurance settlements, judgments, awards, or other payments (“settlements”).  CMS advises that where the beneficiary’s treating physician certifies in writing that treatment for the alleged injury related to the liability insurance settlement has been completed as of the date of the settlement and that future medical items and/or services for that injury will not be required, Medicare considers its interest, with respect to future medicals for that particular settlement, satisfied.  Further, CMS provides that when the treating physician makes such a certification, there is no need for the parties to submit the certification for review and approval.  Therefore, the parties can rely on such certifications to demonstrate that Medicare’s future interest has been considered and satisfied. 

While the scope of the memorandum is limited to cases where a treating physician is able to opine that no future injury-related care is needed, the memorandum serves as the first official notice regarding CMS’s position on the use of LMSAs.

Click here to view the memorandum.

CMS DELAYS IMPLEMENTATION DATE FOR REPORTING BASED ON TPOC AMOUNT

Published on October 4, 2011 in Uncategorized. Closed Tags: , , , .

In a recent alert, CMS announced that it has delayed Section 111 reporting dates for certain liability insurance settlements, judgments, awards, or other payments. The implementation date for reporting will be based on the Total Payment Obligation to Claimant (TPOC) amount. The schedule of the new dates is as follows:

For TPOCs over $100,000, where the TPOC date* remains on or after October 1, 2011, mandatory reporting begins the first quarter of 2012;

For TPOCs between $50,001 and $100,000, where the TPOC date is on or after April 1, 2012, mandatory reporting begins the third quarter of 2012;

For TPOCs between $25,001 and $50,000, where the TPOC date is on or after July 1, 2012, mandatory reporting begins the fourth quarter of 2012; and

For TPOCs between $5,000 and $25,000, where the TPOC date is on or after October 2012, mandatory reporting begins the first quarter of 2013.

Click here to view the alert.

*The TPOC Date is the date the payment obligation was established. This is the date the obligation is signed if there is a written agreement unless court approval is required.