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CLASSIC LIST

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19/Dec/2020

The Centers for Medicare & Medicaid Services provided an alert on November 25, 2020 that it reviewed the costs related to collecting Medicare’s conditional payments and compared the cost to CMS recovery amounts, and decided to leave the threshold for physical trauma-based liability insurance settlements (including self-insurance settlements) at $750.  Additionally, CMS indicated it will keep the $750 threshold for No-Fault insurance and Workers’ Compensation settlements, where the No-Fault insurer or Workers’ Compensation entity does not otherwise have ongoing responsibility for medicals (ORM).  Otherwise, once ORM reaches $750 for either No Fault or Workers’ Compensation plan claims, those payments need to be reported for Medicare beneficiaries via Section 111 Reporting.  These described reporting thresholds do not apply to settlements for alleged ingestion, implantation, or exposure cases.

Take Aways:

Those settlements falling under any of the above described categories of insurance or self-insurance commonly referred to as Non-Group Health Plans (NGHP) will not need to be reported under the Medicare Secondary Payer Act (MSP) via Section 111 and will also not be subject to recovery claims by Medicare under the MSP.  https://www.medivest.com/update-on-medicare-conditional-payment-enforcement-actions/ 

See this web link for the CMS Alert regarding these NGHP reporting thresholds:  https://www.cms.gov/files/document/2021-recovery-thresholds-certain-liability-insurance-no-fault-insurance-and-workers-compensation.pdf

 


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12/Nov/2019

A. How and When Medicare Liens Arise

Under the Medicare Secondary Payer Act, found at 42 U.S.C. §1395y(b) (MSP), Medicare has a right to be reimbursed for payments it has made for a Medicare beneficiary’s medical treatment when the Medicare beneficiary is compensated for the treated injury by a third-party source. While Medicare’s rights to recovery under the MSP are so strong that they have been described as a super lien, that does not mean that your client has to always pay the full amount requested by Medicare.

The MSP right to reimbursement includes both a direct statutory right and a subrogation right, with a variety of recovery remedies available to the U.S. Government. In some jurisdictions, similar MSP recovery rights extend to privately administered Medicare benefits under Part C (Medicare Advantage Organizations or MAO’s) and Part D Prescription Drug Plans via the MSP’s private cause of action provision. The recovery rights described exist without regard to the date of service for the medical items, services, or expenses (medicals). Most attorneys know that they should check to see if traditional Medicare or a MAO has paid for medicals related to a compensated injury and address paying the amount or negotiating payment for same from the settlement proceeds. This article will explore ways to secure satisfactory lien resolution, focusing on traditional Medicare liens.

It should be noted that if a Medicare beneficiary begins billing Medicare or a MAO for injury related medicals after the settlement date/date compensated for the tort claim, recovery rights associated with those post settlement medicals exist in the same way that recovery rights exist for pre-settlement injury related Medicare covered medicals. Under such a post settlement scenario, the need for a Medicare lien investigation and resolution could essentially start all again.

B. Medicare Secondary Payer statute, 42 U.S.C. § 1395y(b) (MSP)

1. History of the Medicare Act and the Medicare Secondary Payer Act.

a. Background and Scope – Both arise from the Social Security Act of 1935. Medicare is a federally funded single payer national healthcare insurance administered by the U.S. federal government, through the Department of Health & Human Services (HHS) under authority of the Social Security Act of 1935. Medicare is funded by a payroll tax, premiums and surtaxes from beneficiaries, and general revenue. HHS delegates running the Medicare program and interpreting Medicare law and implementing regulations to the law to the Centers for Medicare & Medicaid Services (CMS). Medicare covers medical expenses not on the list of exclusions found in 42 U.S.C. §1395y(a)(1) typically for U.S. Citizens (although exceptions exist allowing eligibility for some non-US Citizens as well), who are 65 and older, or younger than 65 with disability status determined by the Social Security Administration as well as people with end stage renal disease (ESRD) and amyotrophic lateral sclerosis (ALS or Lou Gehrig’s Disease). It is made up of parts such as Part A (mainly inpatient hospital insurance and skilled nursing care) and Part B (doctor visits, durable medical equipment, outpatient hospital care and some physical and occupational therapy and some home health care), the two together are known as traditional Medicare; Part C, covering Part A and B services but administered by private insurers; and Part D, covering Prescription Drug Plans (PDPs) that are also administered by private insurers.

b. SSDI is for people who qualify under the Social Security Administration’s definition of disability. SSDI payments start about 5-6 months after SSDI eligibility is determined depending on the date eligibility is first established. Individuals approved for SSDI also become eligible and qualify for Medicare two years after they begin receiving the SSDI payments. Both SSDI and Medicare are entitlement-based in contrast with Medicaid and SSI, that are largely needs-based.

c. Since the Medicare law’s inception in 1965, Medicare has been secondary to Workers’ Compensation. Therefore, if an injury occurred while at work, the Workers’ Compensation carrier would take responsibility for payment of those injury related medicals in accordance with the applicable state statutory rates and procedures. However, in 1965, there was no provision in the law pertaining to payment of medical bills related to liability claims for injured Medicare beneficiaries. Therefore, Medicare would (most often) pay for all medical treatment within its scope, leaving private insurers (other insurance) to work out who would cover non-Medicare covered services.

2. The Medicare Secondary Payer Act (MSP) was Enacted in 1980.

a. In 1980, the Medicare Secondary Payer Statute (MSP) was enacted. 42 U.S.C. §1395y(b) et seq. is commonly called the MSP Act or MSP Statute and is also referred to as the Medicare Secondary Payer provisions of the Social Security Act (SSA). While it has different statutory references, it is the same law and has parallel sequences of each number and letter after the section 1395y or 1862 as follows: 42 U.S.C. § 1395y(b) = 42 U.S.C. §1862(b) of the SSA.

b. The MSP mandates Medicare to be a secondary payer to other forms of health insurance such as group health plans (GHPs), as well as other payment sources such as non-group health plans (NGHPs) when these primary plans are responsible for payment.

c. A “primary plan” is defined in 42 U.S.C. §1395y(b)(2)(A) to mean “a group health plan or large group health plan to the extent that clause (i) applies, and – a workers’ compensation law or plan, – an automobile or liability insurance policy or plan (including a self-insured plan) – or no fault insurance, to the extent that clause (ii) applies. An entity that engages in a business, trade or profession shall be deemed to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance, or otherwise) in whole or in part. 42 U.S.C. 1395y(b)(2)(A)(ii).”

d. All plans other than the group health or large group health plans are categorized by the Centers for Medicare & Medicaid Services (CMS) as Non Group Health Plans (NGHPs). While the MSP applies to Group Health matters, it is in the NGHP area that the MSP compliance industry focuses its attention. NGHPs are those entities that demonstrate obligations of payment as primary payers by either statute (think workers’ compensation or no fault insurance) or by virtue of resolution of claims through settlement, judgment, award or other payment (think liability matters), regardless of whether liability is admitted. Most liability releases specifically deny liability for alleged liability claims. The payment obligation that triggers the MSP arises in the tort scenario when payment is made. There are no defenses listed in the MSP associated with how the demonstration of the obligation arises; when a party begins to make payments under a statute or contract for insurance such as workers’ compensation or under the state’s no fault law under terms of an insurance contract, or when a party settles a liability case, the payment obligation is “demonstrated” and the party responsible for payment is by the MSP, primary to Medicare.

e. The MSP was enacted to curb the rising costs of Medicare and designed to make insurers responsible for payment of injury related treatment primary payers and Medicare, the secondary payer. See Humana Medical Plan, Inc. v. Western Heritage Insurance Company, 832 F.3d 1229, 1234 (11th Cir. 2016). Regulations interpreting the MSP are found at 42 C.F.R. §411 et. seq.

f. To accomplish the goal of curbing Medicare costs, the MSP general rule – 42 U.S.C. §1395y(b)(2)(A) – prohibits Medicare from making payment when a primary plan should make the payment. Specifically, a Medicare payment may not be made
“to the extent that –
(i) payment has been made, or can reasonably be expected to be made, with respect to the item or service as required under paragraph (1) [pertaining to GHPs], or
(ii) payment has been made or can reasonably be expected to be made under a workmen’s compensation law or plan of the United States or a State or under an automobile or liability insurance policy or plan (including a self-insured plan) or under no-fault insurance.”

g. There is only one exception to the prohibition of Medicare making payment when there is a primary payer that should make the payment. The exception authorizes Medicare to make payments called conditional payments if a primary plan “has not made or cannot reasonably be expected to make payment with respect to such item or service promptly.” 42 U.S.C. §1395y(b)(2)(B)(i).

  • Prompt or promptly, when used in connection with primary payments, except as provided in § 411.50, for payments by liability insurers, means payment within 120 days after receipt of the claim. 42 C.F.R. § 411.21.
  • Under 42 C.F.R. §411.50, prompt or promptly, when used in connection with payment by a liability insurer means payment within 120 days after the earlier of the following:
    (1) The date a claim is filed with an insurer or a lien is filed against a potential liability settlement.
    (2) The date the service was furnished or, in the case of inpatient hospital services, the date of discharge. 42 C.F.R. § 411.50

The payments allowed to be made by Medicare are considered “conditioned on reimbursement” to Medicare by the primary plan. These payments could occur either before a settlement or after a settlement so settling parties should always address and make sure to resolve conditional payments a/k/a Medicare liens that arose prior to settlement from the settlement proceeds (even if negotiated to a compromised/reduced number) and additionally, due to the MSP, settling parties should also consider how to avoid conditional Medicare payments after a settlement.

h. Congress enacted the MSP provisions to address enforcement of Medicare as a secondary payer to WC and included the various other types of insurance as primary plans at that time.

i. Between 1980 and 2001, there was very little enforcement of the MSP.

j. CMS Memos of note. In July 2001, CMS issued the Patel memo which mentioned Medicare Set-Asides (MSAs) for the first time. In 2011 – the Stalcup Memo from the Dallas CMS Regional Office was the first time liability MSAs (LMSA’s) were mentioned in a CMS memo with the most detailed guidance on CMS’s position of a need to consider and protect Medicare’s interests for liability as well as Workers’ Compensation settlements to protect the Medicare Trust Funds in a manner consistent with the MSP.

k. The MSP gives Medicare both direct “lien rights” (42 U.S.C. §1395y(b)(2)(B)(iii)) to be able to collect its conditional payments as well as subrogation rights whereby the MSP subrogates the United States to “any right under this subsection of an individual or any other entity to payment with respect to such item or service under a primary plan.” 42 U.S.C. §1395y(b)(2)(B)(iv). This can be an important distinction when it comes to how CMS and courts interpret whether and to what extent an apportionment calculation may be performed to the outstanding conditional payment amount by discounting procurement costs including attorney’s fees and costs in securing the settlement, judgment or award. Actions by the U.S. on behalf of HHS/CMS via the MSP’s direct right of recovery (through the Department of Treasury or potentially the Department of Justice) against entities responsible for payment or those that have received some of the settlement proceeds is separate from its right of subrogation to recover reimbursement of Medicare conditional payments. The MSP’s direct right of recovery has in some cases been interpreted to not be limited by the equitable principle of apportionment stemming from the subrogation right. See Social Security Act, § 1862(b)(1), (b)(2)(B)(ii), as amended, 42 U.S.C.A. § 1395y(b)(1), (b)(2)(B)(ii); 42 C.F.R. § 411.24(c). Zinman v. Shalala, 67 F.3d 841 C.A.9 (Cal.1995).

l. Considering Medicare’s future interests. Without a plan for future care, CMS’s policy regarding settlements has been to presume that the entire settlement amount is designed to compensate the injured party for future medical expenses. While CMS has not yet promulgated regulations regarding how Medicare beneficiaries should ideally protect Medicare’s future interests, because the MSP liability extends to the primary payer as well as any entity or person that receives payment from a primary payer, it is common for settling parties to discuss and consider and sometimes estimate Medicare’s potential future exposure (and therefore the potential recovery that could result from said exposure) on a case prior to settlement. This analysis may involve the use of a MSA allocation report.

m. Having an injured party agree to use other insurance or to agree not to bill Medicare is not adequate according to CMS’s Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide. This Reference Guide focuses on the voluntary submission process for MSA’s in the Workers’ Compensation realm that meet certain workload review threshold dollar/time frame criteria. In the absence of a corollary guide for liability settlements, the WCMSA Reference Guide stands as the current CMS policy for all NGHP matters such as liability (including self-insurance), automobile, Workers’ Compensation, and No Fault settlements. With respect to any matter or settlement inside or outside the WCMSA Reference Guide workload review thresholds, CMS has indicated that without a plan for future care, CMS could deny injury related medicals up to the entire amount of the settlement. (See discussion on pages 8-9, under Section 8.1, titled Review Thresholds).

n. Keep in mind that there is no reference to a MSA in the MSP or any of its corresponding regulations. While Liability MSA allocation reports (LMSA’s) are not currently being reviewed by CMS Regional Offices or the Workers Compensation Review Contractor (WCRC), the current contract that started in 2018 that the WCRC operates under, contemplated some level of review for LMSAs. While regulations or at least notification of regulations, are expected as early as October 2019 regarding protection of future interests for liability settlements, parties in the liability field (and Workers’ Compensation settlements outside of workload review threshold time periods/amounts) have generally been left to “read between the lines” as to what is an adequate consideration and protection of Medicare’s future interests. For those Medicare beneficiaries that are more risk adverse, an option exists to request the respective Regional Office (RO) to update the common working file of any Section 111 reported settlement with an agreed LMSA amount in an effort to help provide a ceiling to the amount of money that would need to be exhausted before Medicare should begin paying for the injured plaintiff’s injury related Medicare covered medicals. Attorneys should counsel their clients to explain these sensitive issues and document their files in a way that will help show how Medicare’s interests were considered in the settlement.

o. In conjunction with considering a Life Care Plan and possible consultation with an economist, plaintiffs’ counsel may also choose to obtain a LMSA to learn of potential future medical expenses (whether Medicare allowable and reimbursable or not) as an aid to understanding and articulating some of these important economic damages for his or her injured client. Defense counsel will typically want to do their own calculations according to the standards set by CMS policy to get a grasp on the Medicare exposure issue regarding future medicals. This article will not address the protection of Medicare’s future interests further, or the intricacies of equitable apportionment, as it relates to LMSA’s. However, evaluating a plan for future care such as setting aside a reasonable amount of funds for Medicare allowable and reimbursable future medicals, and restricting the spending of those funds to injury related Medicare allowable medicals, can often be a wise MSP compliance procedure. The balance of this article will focus on protecting Medicare’s past interests by investigating and addressing a variety of Medicare based conditional payment reimbursement claims (commonly referred to as liens) at or near the time of settlement.


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22/Mar/2019

Medicare Advantage Plan MSP Private Cause of Action Lawsuit Update

1. MSPA Claims 1, LLC v. Tenet Florida, Inc. — F.3d —- 2019 WL 1233207 18-11816 (11th Cir. March 18, 2019).

On March 18, 2019, in MSPA Claims 1, LLC v. Tenet Florida, Inc., the 11th Circuit Court of Appeals made it clear that while Medicare law as a whole and the Medicare Secondary Payer Act (MSP)[1] provisions in particular may be confusing, the MSP’s private cause of action provision [2] is clear[3]. MSPA Claims 1 (MSPA) appealed its dismissal by Defendant Tenet at the district court level in the Southern District of Florida. Because some changes had taken place since the dismissal, the appellate court indicated that MSPA was on solid legal footing if it had sued a primary plan instead of a medical provider. The take away of the Tenet case is that Medicare beneficiaries or entities such as Medicare Advantage Plans/Medicare Advantage Organizations (MAOs) that wish to bring private cause of action claims under the MSP may not bring those claims against medical providers and must only bring those MSP private cause of action double damages (MSP PCOA) claims against primary plans that fail to timely pay or reimburse the aggrieved party.

As a reminder, the MSP makes Medicare secondary to all primary plans including both Group Health Plans and Non Group Health Plans. Non Group Health Plan primary plans include Automobile Insurers, Liability Insurance (including Self Insurance),Workers’ Compensation (WC) Plans or Insurance, and No Fault Insurance.

In many other MSP PCOA MAO cases that have been reported, MAO’s have typically sued primary plans that failed to pay. Most courts that have evaluated the issue of the right of the MAO’s to bring MSP PCOA claims have acknowledged the right of MAO’s or their assigns to bring MSP PCOA claims against primary plans. By contrast, the Tenet case involved an assignee of a MAO that sued a medical provider. The dismissal of MSPA at the district court level for this case focused on deficiencies in MSPA’s assignment chain and not on which entity could be sued under the MSP private cause of action. The key MSP PCOA language that was analyzed in the Tenet case is as follows:

There is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).

42 U.S.C. § 1395y(b)(3)(A).

Comparing the limitations associated with the private cause of action with the public cause of action granted by the U.S. government in the MSP, the Eleventh Circuit clarified in Tenet that “[u]nlike the private cause of action, the government’s cause of action broadly permits lawsuits against ‘any entity that has received a payment from a primary plan’ – a grant that includes medical providers.” Id. (citing 42 U.S.C. § 1395y(b)(2)(B)(iii)(the MSP direct cause of action by the U.S.); Haro v. Sebelius, 747 F. 3d 1099, 1116 and U.S. v. Stricker, 524 F. App’x 500, 504 (11th Circ. 2013)(unpublished)). This means that while providers, attorneys, Medicare beneficiaries, or other entities that receive payment from a primary plan can be sued by the U.S. under the MSP for double damages, only primary plans themselves can be sued under the MSP PCOA.

Before reaching its decision, the Tenet court went through an analysis to confirm subject matter jurisdiction by determining whether MSPA had standing to pursue the claim. To that end, MSPA would need to show that it suffered an injury-in-fact, that was fairly traceable to the defendant’s conduct, and which was redressable by a favorable judicial decision. Id. at 2. The underlying federal claim revolved around the failure of the provider, Tenet, to pay a $286 medical bill on time. The bill was eventually paid approximately seven months late. Interestingly, the Eleventh Circuit explained that late payment was enough to show a concrete “injury-in-fact”. The Tenet court also explained why the assignment hurdles that had stopped MSPA at the district court level had been overcome at the time of the court’s decision. The district court evaluated the two-level assignment chain when the assignment chain was weak because the assignor, Florida Healthcare Plus (FHCP), had entered receivership proceedings and previously repudiated its assignment to La Ley, the entity that assigned the MSP PCOA claim to MSPA. The Eleventh Circuit in Tenet explained that just one week before its decision, FHCP entered into a settlement agreement with La Ley and MSPA that confirmed La Ley’s assignment of FHCP’s claim to MSPA and fully resolved the MSP Act assignment. Id. at 4. The court also dispelled Defendant/Appellee Tenet’s notion that an anti-assignment clause in a Hospital Services Agreement with assignee FHCP concerning the prohibition to assign hospital services would apply to the right of FHCP to assign its right (it received from the MAO) to La Ley that in turn assigned to MSPA the right to bring the MSP PCOA claim.

The Eleventh Circuit used established statutory interpretation rules to reach its final decision. MSPA argued that because paragraph (2)(A) that the private cause of action references makes a cross-reference to paragraph (2)(B), which establishes MSP conditional payment reimbursement and recovery (see MSP recovery actions by the U.S. and information on Medicare lien resolution and the new electronic payment functionality of the Medicare Secondary Payer Recovery Portal) rights, those recovery right concepts from paragraph (2)(B) should be incorporated back into the private cause of action. Essentially, MSPA was arguing that because other entities that receive payments from primary plans had obligations to reimburse Medicare for conditional payments and (2)(B) applies those recovery rights to this larger number of entities (“any entity that receives payment from a primary plan”), that the MSP PCOA could also be brought against any such entity that received a payment from a primary plan. This cross reference within a cross reference argument was shot down by the Tenet court as a “stretch.” Id. at 6. Alternatively, MSPA asked the court to rule in its favor based on authority from CMS promulgated regulations that afford MAOs the same MSP recovery rights as Medicare including the right to sue medical providers. Id. at 6 (citing 42 C.F.R.§§411.24(g), 422.108(f)). However, the Tenet court found the MSP statute to be clear and unambiguous and therefore, determined it unnecessary to look to the less authoritative CMS regulations for help with its interpretation of the MSP. Id. at 6. Because neither defendant was a primary plan, MSPA’s claim was dismissed.

2. MSPA Claims 1, LLC v. Infinity Property & Casualty Group, 2019 WL 1238852 (N.D. Al. March 18, 2019).

This second case was decided on the same day as the Tenet case but was heard at the federal trial level in the U.S. District Court in the Northern District of Alabama. This court falls within the same appellate jurisdiction (Eleventh Circuit) that decided the Tenet case. The same MSPA plaintiff discussed in the Tenet case above filed suit as an assignee of two different MAO’s on behalf of Medicare beneficiaries identified with their initials as representative examples (exemplars) for each of the two MAO’s. The asserted claims were MSP PCOA claims against insurance company, Infinity Property & Casualty Group, an undisputed primary payer. If the facts in this Infinity case were the same as those in the Tenet case except that the Defendant in this Infinity case was a primary payer instead of a medical provider, the case would have not been dismissed. However, the facts in this case were distinguishable from those of the Tenet case beyond who was sued. In the first claim of the Infinity case, MSPA was found by the court to have failed to show that Florida Healthcare Plus (FHCP – the same entity that was involved in a chain of assignments in the Tenet case), a MAO, had paid any medical bill connected to a claim of the exemplar Medicare beneficiary identified as D.W. The court seemed perturbed in announcing that Plaintiff MSPA knew what the court required but “due to a lack of either diligence or ability” failed to produce it. MSPA Claims 1, LLC v. Infinity Property & Casualty Group, 2019 WL 1238852 at 7 (N.D. Al. March 18, 2019). Without the connection to show that the MAO made a payment on behalf of the Medicare beneficiary, the Infinity court declared MSPA lacked standing to bring the claim.

The second claim of the Infinity case involved a MAO named Simply Healthcare Plans, Inc., its Management Service Organization (MSO) named InterAmerican Medical Center Group, LLC, and an exemplar Medicare beneficiary identified as B.G. The Infinity court pointed out that while the Eleventh Circuit in Western Heritage ruled that MAO’s accrue MSP PCOA recovery rights at the time they make conditional payments, the appellate court had not yet decided if the MSP statute also provides a private cause of action to MSO’s. Id. at 7 (citing Humana Medical Plan Inc. v. Western Heritage Ins., 832 F.3d 1229 (11th Cir. 2016). The Infinity court noted that district courts in the Eleventh Circuit and elsewhere overwhelmingly ruled that it does not. Id. (citing MSPA Claims I, LLC v. Liberty Mut. Fire Ins., 322 F. Supp. 3d 1273, 1283 (S.D. Fla. 2018); MAO-MSO Recovery II, LLC et al. v. State Farm Mut. Auto. Ins., 1:17-CV-1541-JBM-JEH, 2018 WL 2392827, at *7 (C.D. Ill. May 25, 2018). The Infinity court cited one case in which a district court did not rule out the possibility of MSO’s having MSP PCOA rights, citing MAO-MSO Recovery II, LLC v. Mercury General, 17-2525-AB and 17-2557-AB, 2018 WL 3357493, at *7 (C.D. Cal. May 23, 2018). The Infinity court followed the Eleventh Circuit’s Western Heritage reasoning that because the MSP does not provide conditional payment reimbursement authority to MSO’s and does not obligate MSO’s to make secondary payments to be reimbursed, the obligations of a MSO would be contractual as opposed to statutory. Id. at 8. Therefore, the court declined to expand the scope of potential plaintiffs under the MSP PCOA beyond those listed in Western Heritage (a MAO when the MAO makes a conditional payment for healthcare services, by a Medicare beneficiary when the Medicare beneficiary had healthcare services paid by Medicare (or a MAO), or a healthcare provider when that healthcare provider has not been fully paid for services provided to a Medicare beneficiary).

The Infinity court also pointed out some potential flaws in the assignment chain to the MSO from another entity called IMC which by contract, needed to approve the assignment of any purported MSP rights from the MSO to MSPA unless it was “ministerial in nature.” Because the evidence presented that the assignment was ministerial in nature failed to explain how it met the definition of that term in the contract, it failed the preponderance of the evidence standard, and the Infinity court found MSPA failed to show a valid assignment under its potential MSO claim.

Take Aways:

In the Eleventh Circuit (covering Florida, Georgia and Alabama), it is now clear that the following can sue a primary plan (only) under the MSP’s private cause of action:
• (1) a MAO when the MAO makes a conditional payment for healthcare services,
• (2) a Medicare beneficiary when the Medicare beneficiary had healthcare services paid by Medicare (or a MAO), or
• (3) a healthcare provider when that healthcare provider has not been fully paid for services provided to a Medicare beneficiary
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[1] 42 U.S.C. 1395y(b)(2) et seq.

[2] 42 U.S.C. § 1395y(b)(3)(A).

[3] MSPA Claims 1, LLC v. Tenet Florida, Inc. — F.3d —- 2019 WL 1233207 18-11816 (11th Cir. March 18, 2019) (citing The Federalist No. 62, at 421 (James Madison) (Jacob E. Cook ed., 1961) and MSP Recovery, LLC v. Allstate Ins. Co., 835 F. 3d 1351, 1358 (11th Cir. 2016).

 


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13/Mar/2019

During the 21 years between 1980 and 2001, it is no secret that the Centers for Medicare & Medicaid Services (CMS) did very little to enforce the Medicare Secondary Payer statute (a series of provisions beginning at 42 U.S.C. §1395y(b) commonly referred to as the MSP).  This is surprising because the MSP prohibits Medicare from making payment when a primary payer should pay but makes only one exception for Medicare to be able to make payments conditionally provided it gets paid back.  Therefore, in those 21 years, protecting Medicare’s past interests would seem to have been on the minds of all settling parties on either side of Non Group Health Plan (NGHP) claims – Automobile, Liability (including self-insurance), Workers’ Compensation, or No Fault cases involving Medicare beneficiaries.

With enforcement actions by the U.S. becoming a reality, most parties to settlement have come to learn the importance of identifying conditional payments made by Medicare prior to judgments, settlements, awards or other payments. However, early on, many plaintiffs and their attorneys ignored their obligations to consider and protect both Medicare’s past and future interests, most often without consequences. Regarding Medicare’s past interests, they were hoping to never hear from Medicare again. Regarding Medicare’s future interests, they hoped that Medicare would not deny injured Medicare beneficiaries’ injury related treatment. While there still seems to be some clarification on the horizon coming from CMS with respect to the legal obligations to protect Medicare’s future interests, there is no longer doubt regarding parties’ obligations to address Medicare’s past interests and satisfy conditional payments.  However, negotiating the amount that CMS will accept as full payment, often through a process called the Medicare compromise process, may actually help protect the Medicare Trust Funds that the MSP was originally designed to protect[1].

Medicare has two Trust Funds. One for Part A that covers hospital insurance for the aged and disabled and one for both Part B that mainly covers doctors’ visits and Part D that covers prescription medications, for the same population of Medicare enrollees. It was announced in June 2018 that the Part A Hospital Insurance (HI) Trust Fund is projected to be depleted in 2026, three years earlier than predicted just a year ago. The Part B and D Trust Fund is not as bad off due to a financing system with yearly resets for premium and general revenue income and is projected to have adequate funding for the next ten years and beyond.

Total Medicare expenditures were reported to be $710 billion in 2017. Medicare expenditures were projected to increase at a faster pace than either aggregate workers’ earnings or the economy, and to increase from approximately 3.7 percent in 2017 to between 6.2 percent and 8.9 percent as a percentage of Gross Domestic Product (GDP) by 2029, causing substantial strain on our nation’s workers, the economy, Medicare beneficiaries, and the Federal budget.

A 2018 Annual Report of the Boards of Trustees of the two Medicare Trust Funds recommended a legislative response [2] to help protect the Part A Trust Fund. However, instead of waiting years for Congress to act, if parties to third party or workers’ compensation settlements involving Medicare beneficiaries [3], proactively address both past and future interests of Medicare, that could help slow Medicare Trust Fund depletion, in line with the above-described intent of the MSP.

With good reason, many MSP compliance discussions focus on considering and protecting the future interests of Medicare and the allocation and administration tools designed to protect Medicare’s future interests.  Equally, if not more important due to the enforcement mechanisms currently in place, parties should address and protect Medicare’s past interests through Medicare lien resolution.  Because we know the obligation to address Medicare’s past interests exists, doesn’t it make sense to be proactive and seek opportunities to reduce/compromise the amount CMS will accept to fully resolve reimbursement of its conditional payment demands/Medicare liens? While it might seem that CMS would frown upon compromise requests, doesn’t it make more sense for CMS to encourage an open line of communication with settling parties and grant discounts to those who take the time to comply with the law as opposed to those settling parties that shirk their respective MSP responsibilities and ignore Medicare’s past interests?

CMS held a webinar today regarding an April 2019 upgrade to the Medicare Secondary Payer Recovery Portal (MSPRP) scheduled to allow for electronic payment of conditional payments for all NGHP matters. The portal’s payment functionality should speed up the payment of known non-disputed conditional payment amounts. For parties interested in reducing exposure to high interest rates (close to 10% currently) associated with late payment of conditional payment demands, this new electronic payment functionality of the MSPRP should be welcome news. Ideally, there will be an opportunity to reduce the requested conditional payment amounts by the procurement costs associated with obtaining the settlements. However, Medicare lien resolution often involves more than just reducing the injured party’s conditional payment obligation by the procurement costs.  As even better news, the compromise and waiver processes will not be affected by the electronic payments process.  Therefore, even when conditional payment/Medicare lien amounts are paid electronically via this new MSPRP process, CMS will still consider compromise or waiver requests, and issue refunds to the party providing payment (or as directed and authorized in writing by the paying party).

 


[1] The MSP is a series of statutory amendments to the Medicare law from 1965 which in turn amends the Social Security Act of 1935.

[2] Because this is the second consecutive finding that the difference between Medicare’s outlays and its financing sources will exceed 45 percent of Medicare’s outlays within 7 years, a Medicare funding warning was issued, requiring the President to submit proposed legislation to Congress within 15 days after the submission of the Fiscal Year 2020 Budget. Congress would then be required by law to consider the legislation on an expedited basis.

[3] The future interests of Medicare should be considered for any settlement regardless of claim type or Medicare enrollment status because the MSP does not make distinctions regarding Medicare’s payment status as a secondary payer for different claim types or about workload review threshold standards that currently exist in the Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide published by CMS.  Those workload review thresholds allowing review by CMS are triggered for WCMSAs involving Medicare beneficiaries for judgments, settlements, awards, or other payments (“Settlements”) over $25,000, and injured parties with a reasonable expectation of becoming enrolled in Medicare within 30 months of Settlement for Settlements over $250,000.  Section 8.1 of the new WCMSA Reference Guide makes it clear that even for WC cases where the workload review thresholds are not met, Medicare’s future interests should be considered via a future care plan (using “plan for future care” to allow the reader to determine the method by which the plan for the future care of the injured party should be prepared – even if not recommending, certainly implying a method such as commonly seen in Medicare Set-Aside allocation reports), or else the settling parties will be placed “at risk for recovery from care related to the WC injury up to the full value of the settlement.”  The industry is still waiting for regulations in the Code of Federal Regulations by CMS clarifying this issue for liability cases.  This coming fall, there may be further clarification regarding consideration and protection of Medicare’s future interests via new Advanced Notice of Proposed Rulemaking in the NGHP area, with the hope that any resulting regulations will address comparative/contributory negligence, causation, policy limits, non-economic damages, and other factors unique to liability cases.

 


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15/Jan/2019

CMS published the latest version of the WCMSA Reference Guide as Version 2.9 (Reference Guide or Guide) on January 4, 2019. In addition to changes announced in Section 1.1 of the Reference Guide titled Changes in This Version of the Guide, there are several other changes made that were not announced. The announced changes were as follows:

Version 2.9 of the guide includes the following changes:

• To eliminate issues around Development Letter and Alert templates auto populating with individual Regional Office (RO) reviewer names and direct phone numbers, these will now display the generic “Workers’ Compensation Review Contractor (WCRC)” and the WCRC customer service number “(833) 295-3773” (Appendix 5).
• Per CMS’ request, certain references to memoranda on cms.gov have been removed.
• The CDC Life Table has been updated for 2015 (Section 10.3).
• Updates have been provided for spinal cord stimulators and Lyrica (Sections 9.4.5 and 9.4.6.2)

Below, in numerical order, please find some of the main changes made by CMS, many of which were not announced in Section 1.1 quoted above. Sections, titles and additions have been bolded for emphasis and ease of reading.

A change in Section 4.1.1, titled Commutation and Compromise, on page 4, was one of the announced changes, and omits the previous Reference Guide’s reference to the July 2001 WC Regional Office (RO) Memorandum known in the industry as the Patel Memo. This is consistent with the statement in Section 1.0 that the Reference Guide “. . . reflects information compiled from all WCMSA Regional Office (RO) Memoranda issued by CMS, from information provided on the CMS website, from information provided by the Workers Compensation Review Contractor (WCRC), and from the CMS WCMSA Operating Rules. The intent of this reference guide is to consolidate and supplant all historical memoranda in a single point of reference. Please discontinue the reference of prior documents.” The concept is that the Reference Guide is the policy of CMS and prior documents or Memos it has issued should not be referred to or otherwise used to support a party’s position regarding matters addressed in the Reference Guide unless it continues to be referenced in the Reference Guide.

Section 4.2, titled Indications That Medicare’s Interests are Protected, has a new unannounced on page 5 bullet stating:

• CMS’ voluntary, yet recommended, WCMSA amount review process is the only process that offers both Medicare beneficiaries and Workers’ Compensation entities finality, with respect to obligations for medical care required after a settlement, judgment, award, or other payment occurs. When CMS reviews and approves a proposed WCMSA amount, CMS stands behind that amount. Without CMS’ approval, Medicare may deny related medical claims, or pursue recovery for related medical claims that Medicare paid up to the full amount of the settlement, judgment, award, or other payment.

Medivest’s take on the subject: CMS makes it sound enticing for Workers’ Compensation entities by using the word “finality.” Many parties have used the voluntary process to obtain approvals but have felt there has been a lack of consistency in review standards, especially from one contractor to another. Blogs and websites of many other companies that prepare Medicare Set-Aside (MSA) allocations indicate that they have experienced an increase in surprise counter highers over expenses like off-label prescription drug use as well as some other medical services when submitting WCMSAs to CMS for approval. As a result of what may have been perceived as a lack of consistency or perhaps a lack of confidence that the counter highers reflect real-world evidence-based needs of injured parties, many settling parties have seemed less inclined to choose submission as a regular practice, even when WC settlements fall within the CMS workload review thresholds, opting instead to follow the Medicare Secondary Payer Act, 42 U.S.C. § 1395y(b) et. seq. (MSP), and its corresponding regulations, instead of the voluntary policies of CMS.

On pages 8-9, under Section 8.1, titled Review Thresholds, two new unannounced examples have been included as follows:

Example 1: A recent retiree aged 67 and eligible for Medicare benefits under Parts A, B, and D files a WC claim against their former employer for the back injury sustained shortly before retirement that requires future medical care. The claim is offered settlement for a total of $17,000.00. However, this retiree will require the use of an anti-inflammatory drug for the balance of their life. The settling parties must consider CMS’ future interests even though the case would not be eligible for review. Failure to do so could leave settling parties subject to future recoveries for payments related to the injury up to the total value of the settlement
($17,000.00).

 

Example 2: A 47 year old steelworker breaks their ankle in such a manner that leaves the individual permanently disabled. As a result, the worker should become eligible for Medicare benefits in the next 30 months based upon eligibility for Social Security Disability benefits. The steelworker is offered a total settlement of $225,000.00, inclusive of future care. Again, the steelworker [typo fixed] is offered a total settlement of $225,000.00, inclusive of future care. Again, there is a likely need for no less than pain management for this future beneficiary. The case would be ineligible for review under the non-CMS-beneficiary standard requiring a case total settlement to be greater than $250,000.00 for review. Not establishing some plan for future care places settling parties at risk for recovery from care related to the WC injury up to the full value of the
settlement.

Medivest’s take on the subject: These examples illustrate CMS’s position that Medicare’s future interests need to be considered even if the dollar amount of the judgment, settlement, award or other payment does not meet the CMS workload review thresholds. The examples emphasize that CMS considers the establishment of a plan for future care to be a priority and that CMS is serious about protecting Medicare’s future interests. These examples further spell out that CMS reserves the right to request an injured party to fully exhaust the amount of money equal to the entire settlement (not mentioning anything about allowing for a reduction of procurement costs such as attorney’s fees and costs expended to obtain the settlement typically allowed to be deducted under MSP regulations when parties timely request to resolve conditional payment/Medicare liens) when an injured party who is compensated for future medicals, fails to establish a plan for future care.

On page 9 under Section 9.0, titled WCMSA Submission Process Overview, CMS allows for a WCMSA proposal to be submitted either by paper or CD to the Benefits Coordination & Recovery Center or online via the WCMSA Portal (WCMSAP) and clarifies that these are the only acceptable submission delivery methods to be used.

In Section 9.4.5, titled Medical Review Guidelines, under the subsection heading Spinal Cord Stimulators on page 22, the following language was added to change the former policy of not including lead implantation in revision surgeries to the newly adopted policy whereby “Routine replacement of the neurostimulator pulse generator includes the lead implantation up to the number of leads related to the associated code. Revision surgeries should only be used where a historical pattern of a need to relocate leads exists.”

In Section 9.4.5, titled Medical Review Guidelines, under the subsection Pricing for Spinal Cord Stimulator (SCS) Surgery on page 22, the following text was inserted “SCS pricing is based on identification of: 1.) Rechargeable vs. Non-rechargeable and 2.) Single vs. Multiple Arrays (leads). If unknown, CMS will default to non-rechargeable single array.”

In Section 9.4.5, titled Medical Review Guidelines, under the subsection Pricing for Spinal Cord Stimulator (SCS) Surgery on page 22, the following language was deleted: “Preadmission Testing will be included where appropriate.”

In Section 9.4.5, titled Medical Review Guidelines, under the subsection Pricing for Spinal Cord Stimulator (SCS) Surgery, a table titled Table 9-3: Spinal Cord Stimulator Surgery CPT Codes on page 24, was expanded from three procedure (CPT) codes previously listed for Post Placement System Testing to a total of 12 including the same Post Placement System Testing as well as a series of CPT codes for Pre-Placement Psychological Testing, Anesthesia, and various other codes for the implantation procedures, etc. along with detailed descriptions of each.

In Section 9.4.6.2, titled Pharmacy Guidelines and Conditions, under the subsection Medically Accepted Indications and Off-Label Use, on page 28, there are now two detailed examples of off-label use instead of only one off-label use example in the prior version. The additional language appears in bold as follows:

Example 1: Lyrica (Pregabalin) is cited in MicroMedEx for an off-label medication use related to neuropathic pain from spinal cord injury, and a number of scientific studies indicate that Pregabalin shows statistically significant positive results for the treatment of radicular pain (a type of neuropathic pain). Spinal cord neuropathy includes injuries directly to the spinal cord or its supporting structures causing nerve impingement that results in neuropathic pain. Lyrica is considered acceptable for pricing as a treatment for WCMSAs that include diagnoses related to radiculopathy because radiculopathy is a type of neuropathy related to peripheral nerve impingement caused by injury to the supporting structures of the spinal cord.

 

Example 2: Trazodone” – which was previously described as – “Trazodone is approved by the FDA for the treatment of major depressive disorder,
but is commonly given off-label to treat insomnia. So the WCRC would include trazodone in a WCMSA if used to treat insomnia, if it is related to the workers’ compensation injury.”

Medivest’s take on the subject: This seems to be a situation where the new WCRC has been including more off-label drugs in its counter highers than the prior contractor, with the expensive drug Lyrica, gaining the most industry attention. Entities submitting WCMSAs for approval should be aware of the language referred to on page 28 of the Reference Guide that cites the Medicare IOM (Internet Only Manual) rules concerning Medicare covered off-label usage. The standard is as follows, “FDA approved drugs used for indications other than what is indicated on the official label may be covered under Medicare if the carrier determines the use to be medically accepted, taking into consideration the major drug compendia, authoritative medical literature and/or accepted standards of medical practice accepted, taking into consideration the major drug compendia, authoritative medical literature and/or accepted standards of medical practice.” Because this standard is so broad and the CMS and its WCRC seems to be taking an expansive approach to what types of off-label use is determined to be includable, parties seeking to control costs but still interested in CMS submission should consider professional consultations with treating physicians as to whether there are less costly medications and/or alternate treatment/prescription doses that can be utilized, implemented, and confirmed as equally effective, prior to submission.

Under Section 10.4 Section 20 – Life Care / Future Treatment Plan, page 43, a new statement “A Future Treatment Plan is required in the absence of a Life-Care Plan” makes it clear that there is a minimum requirement for future treatment to be listed in a submitted allocation in absence of a Life-Care Plan.

Medivest’s take on the subject: This is not really news because the term Future Treatment Plan existed in the prior Reference Guide’s title for this section. This seems to be a way to bring some consistency to the idea and to tie the term Future Treatment Plan together with the terms Future Treatment and Future Treatment Summary that also appear (and previously appeared) in the section.

In Section 10.5.2, titled Use of WC Fee Schedule vs. Actual Charges for WCMSA, on page 43, the state of Virginia was removed from the list of states that do not have a state Workers’ Compensation (WC) Fee Schedule. The states that do not have a WC fee schedule currently are Indiana, Iowa, Missouri, New Hampshire, New Jersey, and Wisconsin. The Reference Guide instructs, “Do not use a fee schedule in a state that does not have a fee schedule.”

Under Section 16, titled Re-Review, there are three subheadings describing circumstances under which a party may request a Re-Review. Under the subheadings of Mathematical Error and Missing Documentation on page 55, the following unannounced Note was inserted:

Notes:
• Disagreement surrounding the inclusion or exclusion of specific
treatments or medications does not meet the definition of a mathematical error.

• Re-Review requests based upon failure to properly review already submitted records must include only the specific documentation referenced as a basis for the request.

Under the third subheading titled Amended Review, the criteria and information remained the same, but the information was reformatted as follows with a phrase added to last note bullet in bold:

• CMS has issued a conditional approval/approved amount at least 12 but no more than 48 months prior.

• The case has not yet settled as of the date of the request for re-review.

• Projected care has changed so much that the submitter’s new proposed amount would result in a 10% or $10,000 change (whichever is greater) in CMS’ previously approved amount.

• Where a re-review request is reviewed and approved by CMS, the new approved amount will take effect on the date of settlement, regardless of whether the amount increased or decreased.

• This new submission may be delivered in both paper and portal formats. Please see the WCMSAP User Guide for more information.

In order to justify that the projected care would result in a 10% or $10,000 change (whichever is greater), the submitter must return CMS’ Recommendation Sheet that was included in CMS’ conditional approval letter and identify the following:

• Line items that were included in the approved amount, but are for care that has already been provided to the beneficiary. Please identify where references to records indicating that the care has already been provided can be found in the updated proposal.

• Line items for care that is no longer required. Please identify where references to replacement treatment can be found in the updated proposal.

• If additional care is required that was not otherwise included in CMS’ conditional approved amount, please add line items.

Notes:
• In the event that treatment has changed due to a state-specific requirement, a life-care plan showing replacement treatment for denied treatments will be required if medical records do not indicate a change.

• The approval of a new generic version of a medication by the Food and Drug Administration does not constitute a reason to request an amended review for supposed changes in projected pricing.

• CMS will deny the request for re-review if submitters fail to provide the above-referenced justifications with the request for re-review.

• Submitters will not be permitted to supplement the request for re-review, nor will they be developed.

Under Section 17.3 Use of the Account on Page 57, the bolded language replaced prior language on the subject:

“Please note: If payments from the WCMSA account are used to pay for services other than Medicare-allowable medical expenses related to medically necessary services and prescription drug expenses for the WC settled injury or illness, Medicare will deny all WC-injury-related claims until the WCMSA administrator can demonstrate appropriate use equal to the full amount of the WCMSA.”

Medivest’s take on the subject: CMS is indicating that Administrators have the burden to show appropriate use of MSA funds and therefore, must keep accurate records to prevent mistaken denial of injury related Medicare covered claims by Medicare after MSA funds are exhausted.

Under Chapter 18 titled CMS Submission, after the sentence, “Additionally, the contractor must ensure that Medicare makes no payments related to the WC injury until the WCMSA has been used up”, the following language was added on page 60:

This is accomplished by placing an electronic marker in CMS’ systems used to pay or deny claims. That marker is removed once the beneficiary can demonstrate the appropriate exhaustion of an amount equal to the WCMSA plus any accrued interest from the account. For those with structured settlements, the marker is removed in any period where the beneficiary exhausts their available funds; however, it is replaced once the anniversary fund deposit occurs until the entire value of the WCMSA is demonstrated as entirely exhausted.

Medivest’s take on the subject: This is the first indication of an “electronic marker” and gives an idea of how the CMS computer system will be flagging those injury related medicals submitted for payment by Medicare, but that Medicare may deny.

In Appendix 4, WCRC Proposal Review Reference Tools on page 69, the link to CMS Memos and written references to CMS Memos going back to 2001 were removed.

All references in Appendix 5. Sample Letters to Sherri McQueen, as Acting Director, were changed to Sherri McQueen, Director, Financial Services Group Office of Financial Management.

In the Development Letter Sample, the CMS Regional Office Contact reference and contact phone numbers were removed and replaced with “the Workers’ Compensation Review Contractor (WCRC) at (833) 295-3773” on pages 81 and 85.

Medivest’s take on the subject:  The WCRC now has the responsibility to field calls regarding submission of WCMSAs instead of the CMS Regional Offices.

Medivest will continue to follow changes in policy at CMS and in the actions of its Workers’ Compensation Review Contractor, Capitol Bridge, LLC, and will keep our readers up to date on developing trends.

 


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08/Jan/2019

Planning to protect Medicare’s future interests should be part of any diligent Medicare Secondary Payer Act[1] (MSP) compliance analysis.  However, because enforcement actions by the U.S. under the MSP have focused on reimbursement of Medicare for payments occurring prior to settlement, Medicare lien resolution (i.e. investigating and negotiating satisfactory payment of Medicare conditional payment reimbursement demands), should be placed at the top of the MSP compliance list by primary payers and those representing injured parties. We recently wrote about conditional payment correspondence from the Centers for Medicare & Medicaid Services (CMS) through its BCRC and CRC contractors, the updated functionality of the Medicare Secondary Payer Recovery Portal (MSPRP), and the importance of obtaining correct conditional payment amounts so settlements can move forward while protecting Medicare’s past interests. When the U.S. government’s conditional payment reimbursement amount (Medicare lien amount) is larger than a potential settlement amount or the payment of the full lien amount will take up a good portion of a Medicare beneficiary’s net settlement, a beneficiary will be less interested in settling. Enter Medicare lien resolution.

Medicare Lien Resolution Road Map

When we perform Medicare lien resolution, our goal is to get CMS to evaluate the Medicare lien amount compared to the net amount to be received by injured party after fees and costs are deducted. Additionally, we sometimes ask CMS to evaluate the Medicare lien amount compared to the weakened financial position/physical condition of the Medicare beneficiary after an accident. When the net settlement is unfairly low compared to the Medicare lien amount, CMS will often reduce the lien prior to settlement. There are several federal statutes and accompanying regulations that provide authority for CMS to reduce (compromise) or sometimes waive Medicare liens. The statutes and regulations outline standards and factors that may be considered for full or partial reductions of Medicare lien amounts. These factors often focus on the ability of the injured party to pay the lien, costs the government would incur to pursue collecting the lien, as well as the injured party’s financial/physical circumstances.

Medicare Lien Waiver Process

The Medicare lien waiver process is a more involved process than the compromise process. Waiver requests typically focus on the financial position of the injured Medicare beneficiary, who may have higher expenses and/or lower income after sustaining an injury. After settlement occurs and funds are transferred, while the MSP technically still allows the U.S. to pursue the primary payer (entity responsible for payment) when a Medicare beneficiary fails to satisfy a Medicare lien, the Medicare beneficiary is most often considered the debtor and pursued by CMS initially through the Benefits Coordination and Recovery Center (BCRC).  Attorneys for Medicare beneficiaries can also be caught in the MSP cross hairs.  Waiver requests for a Medicare beneficiary are sent to the BCRC. In turn, the BCRC typically asks for a SSA-632 form to be filled out with a variety of financial information about the beneficiary. Waiver determinations may be made by BCRC staff and are usually based on financial hardship.

To speed up the process and increase the likelihood of a positive outcome, it is a best practice when requesting a waiver to provide a full financial picture of the beneficiary, including either a completed SSA-632 form or as much of the information requested by that form as can be obtained, so BCRC staff will have adequate information to reach a fair determination. A waiver may be granted when continuing the collection would be against “equity and good conscience.” The process takes about 120 days from start to finish for a waiver determination to be made. If a conditional payment demand has been paid, a waiver or compromise request may still be made, and a refund will be considered. If the BCRC makes a determination to refund all or part of the prior payment, the refund will typically take an additional 3-4 weeks, depending on whether payment had been made to the BCRC directly or whether it was made to the Department of Treasury after a referral of the debt to Treasury by the BCRC.

Medicare Lien Compromise Process

If there is not a significant financial or physical hardship to the Medicare beneficiary, but the dollar amount of the projected settlement is low compared with the likely settlement value and/or the Medicare lien amount, an alternative to a waiver request is a Medicare lien compromise request. To request a compromise, a third-party representative may offer to pay a specific dollar amount on behalf of the beneficiary to fully compromise the outstanding Medicare debt/lien amount. The requester must include the settlement amount (or settlement offer), the amount they are asking CMS to accept as full payment, and the actual or projected attorney fees and costs associated with procuring the settlement. Attorney fees and costs are omitted when the beneficiary is not represented by counsel. CMS, through the BCRC, either responds by accepting the offer or presenting an alternate proposed amount. At that point, the beneficiary must pay the countered amount or if accepted, pay the accepted amount within 60 days of the BCRC response, or else the offer is no longer valid.

Letting a representative act on your client’s behalf in communicating and negotiating with CMS has helped lawyers save time and put more money in the pockets of their clients, while helping parties to the settlement comply with the MSP with respect to Medicare’s past interests.  Count on Medivest to help you with your Medicare lien resolution needs.


[1] 42 U.S.C. § 1395y(b)(2) et seq.

 


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