Medicare in Personal Injury Claims: Conditional Payments and Medicare Advantage Plan Reconciliation ProcessesTechniques to Minimize Repayment Obligations and Maximize Medicare Refunds After a Liability Settlement

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TUESDAY, JANUARY 8, 2019

Presenting a live 90-minute webinar with interactive Q&A

David L. Place, JD, Vice President, Director of Lien Resolution Services, Synergy Settlement Services, Culpeper, Va.

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ALLOWING TRIAL LAWYERS TO FOCUS ON WHAT THEY DO BEST®

EXPERTISE - RESULTS - PLAINTIFF ONLY PARTNER

David Placedave@synergysettlements.com

THE SYNERGY DIFFERENCE

MEDICARE CONDITIONAL PAYMENTS

Repayment Obligation

“When an attorney fails to reimburse Medicare, the United States can recover from the attorney—even if the attorney already transmitted the proceeds to the client,”

“Congress enacted these rules to ensure timely repayment from responsible parties, and we intend to hold attorneys accountable for failing to make good on their obligations.”

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Step 1 - Forms

▪ Have your client sign two necessary forms to allow access to his/her Medicare information.

▪ Form A: Proof of Representation https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Beneficiary-Services/Medicares-Recovery-Process/Downloads/Proof-of-Representation-Model-Language.pdf

Form B: Consent to Release http://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview/Non-Group-Health-Plan-Recovery/Downloads/ConsenttoRelease.pdf▪ The Proof of Representation allows the attorney to act on behalf of the

beneficiary. For example, this allows the attorney to negotiate the lien.

▪ The Consent to Release allows Medicare to provide information to the attorney. For example, this allows Medicare to send the attorney the payout log.

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Step 2 - Notice

▪ Report your claim to the Benefits Coordination & Recovery Center (BCRC) for Medicare. You can report one of two ways, by telephone 1-855-798-2627 where you can report up to eight claims at a time or by mail to:

MEDICARE-MSP General Correspondence

P.O. Box 138897

Oklahoma City, OK 73113-8897

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Step 3-Rights and Responsibilities Letter

▪ Medicare will respond to notice within 14 days.

▪ You will need to make sure all the information contained in this letter is correct. If it is not, you will need to fill it out accordingly, and send it back to the address on the letter.

▪ If you do not receive this letter, then you will need to re-submit your documentation.

▪ From this point on, you will need to send a Correspondence Cover Sheet with any correspondence to Medicare.

▪ The Correspondence Cover Sheet can be found here: https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview/Non-Group-Health-Plan-Recovery/Downloads/MSPRC-NGHP-Correspondence-Cover-Sheet.pdf

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Step 4 – Conditional Payment Summary

▪ Sent within 65 days of receiving your Rights and Responsibilities Letter. This letter will list all the claims related to the injuries.

▪ Conduct an audit of the Conditional Payment Summary

▪ Provider Name

▪ Diagnosis Codes

▪ From-To Dates

▪ Total Charges

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Step 5 – Dispute

▪ If unrelated charges are on the Conditional Payment Summary you can request that BCRC remove them.

▪ Contact Medicare noting which claims are not related and why.

▪ If the injury claimed is complex in nature, provide medical records to support your dispute

▪ Do not use a highlighter as Medicare scans their documents in and thus highlighting does not show up.

▪ Don't forget to send your Correspondence Cover Sheet

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Optional Process –Final Conditional Payment Process

Medicare Secondary Payer Recovery Portal“MSPRP”

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Final Conditional Payment Proces

MSPRPFlowchart

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Final Conditional Payment Process

Final Conditional Payment Letter

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Step 6 – Final Demand Letter

▪ Once you settle your case advise Medicare.

▪ Download the "Final Settlement Detail Document“

▪ http://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview/Non-Group-Health-Plan Recovery/Downloads/Final_Settlement_Detail.pdf

▪ Provide the information on company letterhead

▪ Total amount of the settlement

▪ Total Amount of Med-Pay or PIP

▪ Attorney Fee Amount paid by the beneficiary

▪ Additional Procurement Expenses Paid by the Beneficiary

▪ Attached itemized list of these expenses

▪ Date the Case was Settled

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Calculations

▪ C.F.R. 411.37(c)▪ Medicare payments are less than the judgment or settlement.

▪ Add (Attorney’s Fees) and (Costs) = Total Procurement Costs

▪ (Total Procurement Costs) / (Gross Settlement Amount) = Ratio

▪ Multiply (Lien Amount) by (Ratio) = Reduction Amount

▪ (Lien Amount) - (Reduction Amount) = Medicare Demand Amount

▪ C.F.R. 411.37(d)▪ Medicare payments are equal to or exceed the judgment or settlement.

▪ Add (Attorney’s Fees) and (Costs) = Total Procurement Costs

▪ (Gross Settlement Amount) - (Total Procurement Costs) = Medicare Demand Amount

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Pay or Else!

▪ You must pay this demand amount within 60 days or the lien will accrue interest.

▪ Request for Appeal or Waiver does not toll interest.

▪ Interest is due and payable for each full 30 day period the debt remains unresolved.

▪ By law all payments are applied to interest first, principal second.

▪ 42 C.F.R.411.24(m)

▪ After receiving payment, Medicare will send a letter stating the lien has been reduced to zero and the case is closed.

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Medicare Advantage Plans MAO

Medicare Advantage

• Medicare Advantage Plans, sometimes called “Part C” or “MAO,” areoffered by private companies approved by Medicare. The MAO Planprovides all of Part A (Hospital Insurance) and Part B (Medical Insurance)coverage. MAO Plans may offer extra coverage, such as vision, hearing,dental, and/or health and wellness programs. Medicare pays a fixedamount for your care every month to the companies offering MAO Plans.These companies must follow rules set by Medicare.

• As Medicare Advantage plans are administered by private insurancecompanies many of the difficulties that dealing with BCRC or CMS can entailare avoided. Though these plans arguably have the same recovery rights astraditional Medicare, they are often much more open to agreements basedupon equity and fairness

• MAO Plans use the Medicare Secondary Payer Act as their recovery vehicle.

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Medicare Advantage Recovery Rights

• The Medicare Secondary Payer Act (MSP) provides for a private cause of action whena primary plan fails to reimburse a secondary plan for conditional payments it hasmade.

“there is established a private cause of action for damages (which shall be inan amount double the amount otherwise provided) in the case of a primaryplan 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).

• 42 C.F.R. §422.108(f) extends the private cause of action to Medicare AdvantagePlans.

“MAOs will exercise the same rights to recover from a primary plan, entity, orindividual that the Secretary exercises under the MSP regulations in subparts Bthrough D of part 411 of this chapter.”

• Additionally, CMS directors have issued memorandum asserting that:

“notwithstanding recent court decisions, CMS maintains that the existing MSPregulations are legally valid and an integral part of Medicare Part C and Dprograms.” - CMS, HHS Memorandum: Medicare Secondary PaymentSubrogation Rights (Dec. 5, 2011). 23

Medicare Advantage Repayment Formula• Medicare Advantage Plans will use the same statutory formula to calculate their

repayment as CMS (Centers for Medicare and Medicaid Services).*

• C.F.R. 411.37(c)• Medicare payments are less than the judgment or settlement.

• Add (Attorney’s Fees) and (Costs) = Total Procurement Costs• (Total Procurement Costs) / (Gross Settlement Amount) = Ratio• Multiply (Lien Amount) by (Ratio) = Reduction Amount• (Lien Amount) - (Reduction Amount) = Medicare Demand Amount

• C.F.R. 411.37(d)• Medicare payments are equal to or exceed the judgment or settlement.

• Add (Attorney’s Fees) and (Costs) = Total Procurement Costs• (Gross Settlement Amount) - (Total Procurement Costs) = Medicare

Demand Amount

* Not all Medicare Advantage Plans agree that they are subject to these reduction regulations. Rawlings advocates this position.

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Medicare Advantage – Attorney Liability

• 42 U.S.C. § 1395y(b)(2)(B)(iii)

“In order to recover payment made under this subchapter for an item or service, the

United States may bring an action against any or all entities that are or were required or

responsible … to make payment with respect to the same item or service … under a

primary plan. The United States may … collect double damages against any such entity. In

addition, the United States may recover under this clause from any entity that has received

payment from a primary plan or from the proceeds of a primary plan’s payment to any

entity.”

• 42 C.F.R. §411.24(g)

“CMS has a right of action to recover its payments from any entity, including a beneficiary,

provider, supplier, physician, attorney, State agency or private insurer that has received a

primary payment.”

– United States v. Weinberg, 2002 U.S. Dist. LEXIS 12289 (E.E. Pa. July 1, 2002).

– United States v. Harris, 2009 U.S. Dist. LEXIS 23956 (N.D. W. Va. March 26, 2009) affirmed, 334 F. App’x 569 (4th Cir. 2009).

– Denekas v. Shalala, 943 F. Supp. 1073 (S.D. Iowa 1996). 25

Medicare AdvantagePrivate Cause of Action

• In Humana Medical Plan, Inc. v. Western Heritage Ins. Co., No. 15-11436 (11th Cir. Aug. 8, 2016), the 11th Circuit Court of Appealsaffirmed the U.S. District Court for the Southern District of Floridagranting of Humana's Motion for Summary Judgment and held thatHumana's right to reimbursement for the conditional payments it madeon behalf of plan beneficiary under a Medicare Advantage Plan wasenforceable. Additionally, Humana was entitled to double damagespursuant to 42 U.S.C. § 1395y(b)(3)(A).

• Western Heritage had an obligation to independently reimburseHumana. Because it didn’t, the Court rule that as a matter of law,Humana is entitled to maintain a private cause of action for doubledamages pursuant to 42 U.S.C. § 1395y(b)(3)(A) and is therefore entitledto $38,310.82 in damages.

• The Eleventh Circuit said that placing the $19,155.41 in trust was not thesame as paying the MAO and that the damages “SHALL” be double. 26

• Attorneys are increasingly becoming the target

of direct claims from Medicare Adv. plans.

• How SLRS can help• In 2016 Dave was expert in widely publicized case where a law

firm was sued directly for $400k as a result of not repaying a

Medicare Advantage lien.

• In 2016 SLRS obtained a full waiver from CMS of a $125k

claim where the trial attorney was personally responsible for

payment.

• SLRS has internal practices and processes designed to alert our

client if we believe an unidentified Medicare Adv. plan may be

involved.

Targeting Attorneys

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Medicare Waive & Compromise

• Appeal

• Financial Hardship Waiver

• Compromise

• “Best Interest of the Program” Waiver

Medicare Conditional Payments Post Final Demand Options

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Medicare Does Issue Refunds

• Current Success Rate: 81%

• Total Refunds in 2018: $978,726.28

• Largest Medicare Refund 2018 $93,990.55

• Total Refunds 2013-2018: $5,220,730.1030

Appeals

APPEAL LEVEL TIME LIMIT FOR FILING REQUEST MONETARY THRESHOLD TO

BE MET

I. Redetermination 120 days from date of receipt of

the notice initial determination

None

2. Reconsideration 180 days from date of receipt of

the redetermination

None

3. Administrative Law Judge

(ALJ) Hearing60 days from the date of receipt of

the reconsideration

At least $130 remains in

controversy.

4. Departmental Appeals Board (DAB) Review/Appeals Council

60 days from the date of receipt of

the ALJ hearing decision

None

5. Federal Court Review 60 days from date of receipt of the

Appeals Council decision or

declination of review by DAB

At least $1 ,260 remains in

controversy.

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• Involves application for a compromise or waiver to both the Benefits Coordination and Recovery Center (BCRC) as well as the Center for Medicare and Medicaid Services (CMS)

• There are three statutory authorities under which Medicare may accept less than the full amount of its claim:1. §1870(c) of the Social Security Act – BCRC (Financial Hardship)

2. §1862(b) of the Social Security Act – CMS (Best Interest of the Program)

3. The Federal Claims Collection Act (FCCA) – CMS (Compromise)

• If successful, a refund is issued by Medicare

Post Payment of Final Demand Waiver/Compromise

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“There shall be no recovery if such recovery would defeat the purposes of this chapter or would be against equity and good conscience.”

• The Medicare Secondary Payer Manual does provide example situations of financial hardship that would justify a full or partial waiver consideration.

• “The beneficiary has spent the settlement proceeds and the only remaining income from which the beneficiary could attempt to satisfy Medicare’s claim would be from the money that is needed for the beneficiary’s monthly living expenses;

• Beneficiary income and resources are at a poverty level standard

• An unforeseen severe financial circumstance- For example, waiver would be appropriate if the beneficiary became legally responsible for their grandchildren.”

Financial Hardship Waiver

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A Medicare beneficiary seeking a waiver or compromise of Medicare’s interest is required tosubmit a Hardship Letter to CMS for use in their evaluation process. Whenever possible thisletter should be written by the beneficiary. The letter needs to express to CMS why repayingMedicare the amount of their Final Demand is “against equity and good conscience” andhas/will create(d) an “undue hardship.”

1. Facts of Accident2. Injuries – Physical, psychological, emotional3. Current Physical, Mental, Emotional state4. Unrecorded out of pocket expense

a) House Renovationb) Adult diapersc) Prescriptionsd) Private nurse or custodial care not paid by Medicaree) Co-insurance and deductiblef) Accident related dental workg) Other financial obligations

5. Status of settlement proceeds. Exhausted?6. Unforeseen financial circumstances---ex. become legally responsible for grandchildren.7. Degree to which repayment would cause undue hardship8. Reason why repayment is not justified.

Hardship Letter

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• The Federal Claims Collection Act (FCCA)

• CMS may suspend or end collection action on a claim when it appears that no person liable on the claim has the present or prospective ability to pay a significant amount of the claim or the cost of collecting the claim is likely to be more than the amount recovered.

• The cost of collection does not justify the enforced collection of the full amount of the claim;

• There is an inability to pay within a reasonable time on the part of the individual against whom the claim is made; or

• The chances of successful litigation are questionable, making it advisable to seek a compromise settlement.”

Post-Settlement Compromise

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• § 1862(b) of the Social Security Act;

• A separate and distinct evaluation than a request under §1870(c) of the Social Security Act (Financial Hardship Wavier) and a request for a Compromise under the Federal Claims Collection Act (FCCA)

• The Secretary may waive (in whole or in part) the provisions of this subparagraph in the case of an individual claim if the Secretary determines that the waiver is in the best interests of the program established under this title

“Best Interest of the Program” Waiver

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Learn More Today

Call us at (877) 242-0022or visit synergysettlements.com