Medicare Secondary Payer - Circuit Court of Cook County

Report
Medicare Secondary Payer
and Negligence Lawsuits
an Overview
Patricia J. Foltz
Anderson, Rasor & Partners, LLP
June 21, 2013
Medicare’s Right of Recovery
 Statutory reimbursement right
 Medicare is secondary to all types of liability
insurance, including self-insurance.
 Medicare may make “conditional payments” while a
claim is pending and/or before a claim is filed. If a
claim is pursued and resolved that resolution must
include reimbursement of Medicare for expenses
related to the claim.
 This has been known as a “Medicare Lien”.
The Process for Plaintiff
 The accident/incident happens
 The Medicare Beneficiary gets treatment from
hospitals/doctors
 The hospital/doctor submits claims to Medicare and
is reimbursed
 The Beneficiary makes a negligence claim


Formal Lawsuit
Pre suit claim to insurer
The Process for Plaintiff
 Plaintiff or their representative/lawyer notifies the
Coordination of Benefits Contractor (COBC) of the
injury/incident and the claim.
 MSPRC (Medicare Secondary Payer Recovery
Contractor) issues a Rights and Responsibilities
letter.

Attorney must file proof of representation.
 MSPRC creates a Tort Recovery Record
The Process for Plaintiff
 MSPRC identifies Medicare paid medical claims
related to the case and issues a “Conditional
Payment Letter” (CPL)

This is often simply all payments after date of incident.
 The plaintiff/beneficiary may challenge claims that
are not related to the case. Sometimes called a
relatedness review.
 You can update the CPL every 90 days
The Process for Plaintiff
 Case settles/verdict for plaintiff
 Plaintiff/beneficiary, attorney for plaintiff and/or
authorized representative must notify MSPRC the
settlement information




Settlement amount
Date
Attorney’s fees
Costs
The Process for Plaintiff
 MSPRC identifies final payment amount, calculates
amount owed (crediting procurement costs) and
issues Demand Letter.
 Payment due within 60 days of Demand Letter or
interest accrues
 If not paid within 60 days MSPRC issues an Intent to
Refer Letter
 If not paid within 60 days of Intent letter referred to
Treasury for collection.
The Process for Plaintiff
 After the Demand Letter there is a route to appeal or
request waiver.
Sanctions
 If plaintiff/plaintiff’s representative/plaintiff’s
lawyer does not address the “lien” Medicare can sue
any one of them to recoup the “lien” amount.
 Failure to pay “lien” may result in double damage.
The Process for Defendant’s Insurer
 RRE = Responsible Reporting Entity (aka insurer)
 RRE becomes aware of lawsuit or claim
 RRE obtains baseline information to query
MMSEA (Medicare, Medicaid and SCHIP
Extension Act of 2007) system.
 RRE queries Medicare through MMSEA system to
see if the plaintiff is a beneficiary
 RRE should re query if case is close to trial or
settlement
The Process for Defendant’s Insurer
 If plaintiff is a Medicare recipient the insurer and
defendant’s lawyer should deal with the Medicare
Lien during settlement discussions.
 Plaintiff/Plaintiff’s lawyer must deal with Medicare.
 If the injury is continuing hen plaintiff must deal
with reimbursement of Medicare in the future.
Future Payments by Medicare
 Medicare Set Asides clearly apply to Worker’s
Compensation cases

A formal process applies
 CMS clearly believes that non Worker’s Comp cases
also must address future payment
 Dealing with future medicals for a Medicare
beneficiary is in flux

May resolve outside the formal set aside process
The Process for Defendant’s Insurer
 Insurer must report claim through MMSEA if:
 Plaintiff is a Medicare Recipient at time claim is resolved and
money has been paid
 Claim report includes 130 data fields. Key fields are
ICD9 codes and injury codes


Basis of relatedness analysis
Consider addressing in settlement negotiations
 What is unclear?
 What if plaintiff will become a Medicare recipient and require
care for continuing injury
Responsibility for Medicare “lien”
 Insurer is primarily responsible to Medicare for
reimbursement
 If Insurer pays beneficiary/beneficiary’s attorney
they become responsible to pay Medicare
 This does not relieve insurer of liability for payment.
Medicare can still pursue the insurer.
Sanctions
 Double damages for unpaid lien
 $1000 per day for failure to report claims
 Not dealing with Medicare lien where your client has
provided care for the alleged injuries can lead to
False Claims Act issues which include criminal
sanctions.
Alternatives
 Pay 25 % of settlement of $5000 or less
 Pay nothing if settlement $300 or less
 Self-calculate lien on settlement of $25,000 of less
 All of these have caveats
What About Medicare Part C and D?
 Part C is Medicare Advantage, the Medicare HMO
 Part D is prescription drug coverage
 Both C and D involve a capitated payment by
Medicare to a part C or D provider who assumes the
risk of costs above that capitated payment
 Both C and D work more as true “liens” not statutory
rights of recovery. See, 42 CFR 422.108 and 42 CFR
423.462. The Part C providers bill the third parties
themselves. Part D providers advise the COBC.

similar documents