Partnering with Lien Resolution Experts for Enhanced Law Firm Efficiency

April 5, 2023

Jason D. Lazarus, , J.D., LL.M., CSSC, MSCC

In today’s fast-paced legal landscape, personal injury law firms face a multitude of challenges, from tracking liens to navigating the complexities of subrogation, reimbursement, and medical debts. The pressure to provide exceptional results to their clients while maintaining a competitive edge has prompted an increasing number of firms to consider developing strategic partnerships with expert lien resolution groups. In this blog post, we explore the advantages of working with an expert lien resolution group to enhance law firm efficiency and deliver optimal results for injury victims.

Efficiency and Results: The Key to Success

Partnering with an expert lien resolution group offers several compelling benefits, most notably in terms of efficiency and results. Personal injury law firms often find themselves at a disadvantage when dealing with government benefit health plans or aggressive recovery vendors, such as Medicare, Medicaid, FEHBA, and private recovery contractor groups like Rawlings, Equian, Optum, and Conduent. These massive corporations have vast resources and a singular focus: to collect as much money as possible from personal injury recoveries.

By partnering with an expert lien resolution group, a law firm can level the playing field, gaining access to a deep team of experts capable of challenging these sophisticated recovery vendors. The benefits of outsourcing lien resolution can be summarized in three key points:

Enhance law firm efficiency by reducing operating expenses.
Gain access to a deep team of experts to fight massive recovery vendors.
Achieve the best possible resolution for the injury victim in terms of lien repayment!

Unraveling the Complexities of Lien Resolution

The world of lien resolution is far from simple, with each type of lien presenting unique challenges, nuances, and legal requirements. Health insurers have long recognized these complexities, turning to lien resolution and recovery contractor vendors to secure reimbursement on behalf of their plans. Personal injury attorneys often struggle to keep up with the ever-changing legal landscape, leaving them ill-equipped to fight back against these formidable opponents.

Outsourcing lien resolution to a specialized group provides law firms with a powerful ally, one that understands the inside baseball, capable of navigating the intricacies of various lien types as well as being adept with the latest rules and strategies associated with healthcare liens. This partnership minimizes operating expenses, frees up valuable time, and allows attorneys to focus on moving cases towards settlement or trial, instead of being bogged down in the frustrating red tape of hospital/provider, government, and private health plan lien resolution.

Delivering Outstanding Results for Injury Victims

Ultimately, the goal of any personal injury law firm is to secure the best possible outcome for their clients. By partnering with a lien resolution group, law firms can ensure that their clients get the steepest reduction when resolving liens and accordingly maximizing their net recovery. In turn, this leaves clients with a positive, lasting impression at the conclusion of their case. This client satisfaction can translate into repeat business and increased referrals, boosting the law firm’s reputation within the community.

The Ethical Aspect: A Win-Win Solution

Outsourcing lien resolution not only enhances efficiency and delivers optimal results, but also aligns with the ethical responsibilities of personal injury attorneys. By partnering with a well-qualified lien resolution group, law firms can ensure they are upholding their duty to provide the best possible representation to their clients, while also remaining compliant with the myriad of legal obligations and regulations governing lien resolution.

Conclusion

The decision to outsource lien resolution offers a win-win solution for law firms and their clients. By partnering with an expert lien resolution group, personal injury law firms can enhance efficiency, reduce operating expenses, gain access to a team of specialists, and secure the best possible results for their clients. The benefits of this strategic partnership cannot be overstated, providing a competitive edge, and ensuring the long-term success of the law firm as well as the satisfaction of the injury victims they represent.

Partner with Synergy here.

Joey Coleman on TLV Podcast

In this episode of Trial Lawyer View, host Jason D. Lazarus engages in a conversation with Joey Coleman, an accomplished author and professional speaker, to explore the intersection of law and entrepreneurship. Joey shares his valuable insights from his best-selling book, “Never Lose a Customer Again” which is highly acclaimed for its innovative approach to building stronger empathy with clients. The book outlines an eight-phase framework for customer experience, which can be revolutionary in the way law firms approach customer service and business practices.

Joey delves into the importance of personal injury lawyers using his framework to build a more robust connection with their clients. He emphasizes that understanding the client’s needs, desires, and preferences is crucial in providing them with the best experience possible. Joey’s approach is based on his belief that the client’s experience is everything in any business, including the legal industry. His framework is designed to ensure that each phase of the client’s experience is a positive one, leading to greater client retention and loyalty.

In addition to discussing the eight phases of customer experience, Jason and Joey also explore the role of technology in enhancing customer experience in the legal industry. They discuss how the use of technology can help law firms improve client retention and loyalty by streamlining processes, automating mundane tasks, and providing clients with a more personalized experience.

Moreover, Joey shares his new book, “Never Lose an Employee Again” which provides strategies for creating a more engaged and committed team. Jason and Joey discuss how law firms can implement these strategies to create a more positive work environment for employees, leading to increased productivity, job satisfaction, and overall success.

By tuning in to this episode, listeners can learn from Joey’s extensive experience and expertise in customer experience and employee engagement. They will gain valuable insights on how to transform their law firm’s customer experience and create a more engaged and committed team. Don’t miss this opportunity to learn from one of the industry’s most innovative and successful entrepreneurs.

Thanks for listening!

Learn more here.

What Gives Hospitals and Government Health Benefit Plans the Right to Recover

March 9, 2023

Teresa Kenyon, Esq.

Introduction

Navigating the complex world of healthcare liens can be overwhelming, especially for cases involving military personnel, Veterans, Medicaid recipients and the uninsured who need hospital care. However, understanding the intricacies of programs like the Federal Medical Care Recovery Act (FMCRA), Medicaid, and hospital lien laws is crucial to ensure that those who are injured pay back as little as possible. This article explores the FMCRA, Medicaid, and hospital liens, and highlights important laws and applicable court cases that have shaped how these programs recover. By understanding the nuances of these programs, a trial lawyer can be better prepared to decide whether to partner with lien resolution experts to get the best results.

Military

The Federal Medical Care Recovery Act (FMCRA) [1] is designed to ensure that the person or entity responsible for a Veteran’s injury pays for their medical care, rather than the taxpayers. The Act grants the United States the right to recover the reasonable value of medical care and treatment from the party responsible for the injury. This applies to TRICARE beneficiaries and covers care provided by Uniformed Services facilities, care paid for by TRICARE, or both. The funds recovered by the program are used to supplement the budget allocated by Congress, enabling each VA medical facility to provide exceptional care and services to Veterans.

The FMCRA empowers the federal government to recover the costs of medical care in cases where the United States is authorized or required to provide or pay for medical care for someone suffering from a disease or injury caused by the intentional conduct or negligence of a third party. To recover the cost, the government relies on 10 U.S.C. § 1095 and expects beneficiaries to pursue the case to protect the government’s interests. Many military branches require the attorney hired by the injured party to sign an Attorney Protection Agreement, acknowledging their responsibility to protect those interests. However, the government does not provide attorneys representing injured parties with fees or reductions for their interests, specifically for attorney fees and costs associated with effectuating the settlement. [2]

The government has a lien on any proceeds of recovery for medical and hospital care provided by Veterans’ Administration hospitals or private health care providers. The government has three ways to recover medical and hospital care costs in cases of tort liability by a third party: subrogation, intervening or joining in any action brought by the injured person, or initiating such an action in conjunction with the injured or deceased person. None of these procedures is mandatory, and the head of the department or agency furnishing care has the discretion to choose the method.

Medicaid

Medicaid is a public benefit program that provides essential healthcare coverage to individuals who meet financial eligibility criteria. The program is funded by both the federal and state governments, with administration at the state level.

In the landmark case of Ahlborn[3], the US Supreme Court limited the amount of funds that Medicaid can recover when a beneficiary receives a settlement in a third-party liability situation. Under federal law, Medicaid is only entitled to recover funds that are attributable to medical expenses, rather than the entire settlement or judgment. State statutes that mandate full reimbursement of Medicaid expenditures are unenforceable, as far as they do not exempt from recovery the non-medical portions of the settlement, such as damages for pain and suffering or lost wages.

In Wos v. E.M.A. [4], the US Supreme Court held that North Carolina’s statute, which allocated up to one-third of personal injury awards to medical expenses, was preempted by the anti-lien provision of the Medicaid Act. This decision rendered arbitrary allocations in state statutes unenforceable, and the Medicaid anti-lien rule from Ahlborn prevented North Carolina’s statue from being enforced as written.

However, the recent case of Gallardo v. Marstiller[5] potentially changes the analysis set forth in Ahlborn. The US Supreme Court ruled that Florida can seek reimbursement from settlement amounts that represent “payment for medical care,” whether past or future. This decision may have implications for certain cases, and the circumstances of each case will need to be considered to determine whether the Ahlborn analysis applies or is modified now by Gallardo’s inclusion of future care.

Hospital Liens

Hospital lien laws are established by state statutes, and their interpretation through case law varies significantly from state to state. Consequently, there is no single pivotal case or statute that forms the legal basis for a hospital lien.

The key to reducing the amount owed under a hospital lien is to focus on the actual reasonable value of the services provided. Rather than attempting to negotiate down from the full billed charges presented by the hospital, it is essential to assess the fair cost of care and negotiate accordingly. Hospital bills are often inflated, bearing little relation to what should be paid for the services provided.

Those familiar with health insurance may have noticed the vast difference between billed charges and the amount paid to a provider based on contractual agreements between facilities and insurance carriers. For example, a bill could be presented for $45,000, while a health insurance carrier may have a contract to pay only $16,000. Facilities also offer uninsured discounts. It is unfair to require an injured party who receives a settlement to pay the full amount. Moreover, if there are insufficient funds to cover the bill, it is inequitable to attach a lien to the whole settlement and then assert a debt for the remaining amount, which is often significantly more than what would have been paid by Medicare, Medicaid, or a private insurer.

So, what is the reasonable cost for services? It varies depending on the location, facility, and procedure. Obtaining this information is not easy. Hospitals that receive payments from Medicare are required to submit a Hospital Cost Report (CMS Form 2552-110), which provides detailed information about the costs incurred in each department.

Conclusion

In conclusion, even though military medical care, Medicaid and hospital liens third party liability recovery all involve the reimbursement of the cost of medical treatment, how they are handled in the legal system varies. The Federal Medical Care Recovery Act ensures that those responsible for a veteran’s injury pay for their medical care, and the funds recovered supplement the budget allocated by Congress to provide exceptional care and services to veterans. Medicaid provides essential healthcare coverage to financially eligible individuals, with a recent Supreme Court decision potentially changing how reimbursement from settlements is handled. Hospital liens, which vary by state, can be reduced by focusing on the actual reasonable value of services and negotiating accordingly. It is essential to consider the fair cost of care rather than the inflated billed charges presented by hospitals, and obtain detailed information about costs incurred in each department. Ultimately, these topics highlight the importance of ensuring that those in need of medical care receive fair and just treatment in the legal system.

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Are you tired of dealing with the headache of lien resolution on your own? Look no further than Synergy – your ultimate lien resolution partner! With hundreds of years of combined experience, our team of expert negotiators has the skills and knowledge to handle even the most complex liens, dealing with insurance carrier recovery departments and subrogation vendors like no other. By partnering with Synergy today, you’ll gain access to our unparalleled team of lien resolution specialists who will work tirelessly to maximize the reduction of liens. Don’t waste any more time struggling with troublesome and time-consuming liens. Let Synergy’s subrogation-busting team take care of it for you, so you can focus on what you do best – help other clients. Trust us, now is the time to make the smart move and partner with Synergy.

[1] 42 USC 2651-2653

[2] 5 USC 3106

[3] Arkansas Dept. of Health and Human Servs. V Ahlborn, 547 U.S. 268 (2006)

[4] Wos v E.M.A., 568 U.S. 627 (2013)

[5] 596 US ___(2022)

Take Stock of Your Firm’s MSP Compliance Protocol Before it is Too Late

March 1, 2023

Rasa Fumagalli, , JD, MSCC, CMSP-F

It is absolutely crucial that trial lawyers don’t neglect their obligation to address Medicare’s conditional payment recovery claims at settlement. While trial lawyers in a liability settlement usually address this responsibility, it’s essential to remember that Medicare has the right to recover payments from providers, suppliers, physicians, attorneys, state agencies, or private insurers that have received a primary payment (as per 42 CFR Sections 411.24). If Medicare is required to pursue legal action to recover conditional payments, it may end up recovering twice the amount of the primary payment, which can be a hefty sum.

The United States government has shown a willingness to investigate and pursue personal injury law firms that fail to reimburse conditional payments for even relatively small amounts. In fact, a recent investigation into the Baltimore-based law firm, Kandel & Associates, P.A., resulted in a settlement agreement with the United States Attorney for the District of Maryland. The US Attorney alleged that the firm failed to resolve at least 12 Medicare Secondary Payer conditional payment debts and simply disbursed the settlement proceeds. As a result, the Kandel firm had to pay the United States nearly $40,000 to resolve the government’s claims. Additionally, the firm had to designate and train an employee to pay MSP debts and commit to periodic reviews of any outstanding MSP debts with the designated employee. To read more, click HERE

It’s clear that ignoring Medicare Secondary Payer compliance issues at settlement is not an option. As personal injury lawyers, you must have a well-established process to audit/verify an individual’s Medicare status and identify the type of Medicare coverage in place from the date of the injury until settlement. Furthermore, it’s important to document discussions regarding the potential impact of the Medicare Secondary Payer Act on post-settlement injury-related care and add them to the client’s file.

If you’re looking to establish your firm’s MSP compliance protocol, reach out to Synergy’s team of MSP compliance experts for help. By taking the necessary steps, you can avoid this type of government legal action and ensure that your client’s obligations with Medicare are compliantly resolved. Don’t let Medicare Secondary Payer compliance issues derail your settlements—work with Synergy’s team of MSP compliance experts to protect your clients and your practice.

Stephanie Everett on TLV Podcast

Welcome to Trial Lawyer View, your go-to podcast for the latest insights into legal trends and strategies, presented by some of the brightest trial attorneys in the nation. Our most recent episode is a true game-changer for trial lawyers!

In this enlightening episode, our host, Jason D. Lazarus, J.D., LL.M, CSSC, MSCC, CEO of Synergy, engages in a dynamic conversation with Stephanie Everett, the CEO of Lawyerist and the lead coach of the Lawyerist Lab coaching program. Together, they delve into the essential aspects of building and managing a law firm with a business-oriented mindset.

Stephanie generously shares her invaluable strategies for crafting an exceptional client experience and effectively establishing boundaries to manage client expectations. They explore the critical role of hiring a professional or business coach to elevate your law firm’s performance and the evolving concept of non-lawyer ownership of law firms.

If you’re a legal professional seeking to elevate your game, this episode is an absolute must-listen. Prepare to take your law firm to new heights by gaining insights from two industry leaders who are at the forefront of innovation and excellence.

Join us on this transformative journey of knowledge and inspiration by tuning in now. Trust us, you won’t want to miss this extraordinary episode.

Thank you for being a valued part of our Trial Lawyer View community. Your commitment to excellence in the legal field is deeply appreciated!

Learn more here.

Synergy’s Workers’ Compensation Medicare Secondary Payer Advice

February 14, 2023

Rasa Fumagalli, JD, MSCC, CMSP-F

Oftentimes an attorney representing an injured worker may simply scan the defense’s Medicare Set-Aside and assume all the future medical issues have been addressed in the MSA. This month’s “Since You Asked” column addresses the need to understand the projections in a Medicare Set-Aside report and the importance of considering the non-Medicare covered injury-related expenses the injured worker may incur post settlement.

Question:

My client has been receiving workers’ compensation benefits for years. He is now on Medicare and the carrier wants to settle out future medical rights by funding a Workers’ Compensation Medicare Set-Aside (WCMSA). I haven’t seen many WCMSA proposals and am wondering what I should be looking for in the WCMSA. Can you help?

Answer:

In order to evaluate a WCMSA proposal, you first need to identify all of the medical conditions that are related to the industrial accident. Since your file may not necessarily have all the current medical and pharmacy information, it is important to have a discussion with your client about the nature of his ongoing injury-related treatment. A decision may then be made as to the need for obtaining updated medical and pharmacy records.

Once you have identified the injury-related conditions and are aware of the current medical and drug treatment, you should make sure that the WCMSA report correctly identifies the injury-related conditions as accepted conditions. The conditions will also have corresponding ICD-10 diagnosis codes associated with them. It may be beneficial to confirm their accuracy since these codes will likely be used for the Section 111 reporting of the settlement. If a condition was initially accepted, but was then subsequently disputed, the WCMSA report may also reflect this.

The WCMSA medical treatment projections should be reviewed to ensure that they include projections for the recommended future procedures or treatments that are reflected by the last two years of injury-related medical records. If a procedure is missing because it is not covered by Medicare, it may be funded outside of the WCMSA proposal for non-Medicare covered expenses. The drug projections should be scrutinized in the same way. If a drug is missing because it is not covered by Medicare, it should be funded outside of the WCMSA proposal for non-Medicare covered expenses. Since a workers’ compensation carrier’s responsibility for future medical costs in a workers’ compensation case is not limited to treatment that is covered by Medicare, the injury-related non-Medicare treatments should be accounted for in the settlement as well and you should obtain a non-Medicare expense report to detail the expenses that will not be covered for the injured worker as part of the WCMSA. Treatment projections are priced based on the state’s workers’ compensation medical fee schedule. Drugs are priced based on the Average Wholesale Price (AWP) listed in the current Red Book Drug Reference, with generic drugs priced at the lowest non-repackaged AWP.

When parties are discussing a settlement figure that is inclusive of the WCMSA, the injured worker may want to take steps to mitigate the WCMSA projections. For example, a physician’s switch from a brand name drug to a generic version of the drug may result in significant cost savings, thereby leaving more of the settlement funds as unrestricted.

It is also important to consider whether the WCMSA proposal will be submitted to CMS for review. Although CMS review is voluntary, CMS recommends this review in order for Medicare to become the primary payer after proper exhaustion of the CMS-determined WCMSA. The most recent version of the WCMSA Reference Guide (Guide) (Version 3.8, November 14, 2022) includes Section 4.3 that again cautions parties of the risks associated with a non-submitted WCMSA. It states as follows:

“As a matter of policy and practice, CMS may at its sole discretion deny payment for medical services related to the WC injuries or illness, requiring attestation of appropriate exhaustion equal to the total settlement as defined in Section 10.5.3 of this reference guide, less procurement costs and paid conditional payments, before CMS will resume primary payment obligation for settled injuries or illnesses, unless it is shown, at the time of exhaustion of the MSA funds, that both the initial funding of the MSA was sufficient and utilization of MSA funds was appropriate. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS approved WCMSA amount.”

A note was added to this section as well. It states:

“Notes: This official policy shall apply to all notifications of settlement that include the use of a non-CMS-approved product received on, or after, January 11, 2022; however, flags in the Common Working File for notifications received prior to that date will be set to ensure Medicare does not make payment during the spend-down period.

CMS does not intend for this policy to affect any settlement that would not otherwise meet review thresholds. This comment does not relieve the settling parties of an obligation to consider Medicare’s interests as part of the settlement; however, CMS does not expect notification or submission where thresholds are not met.”

The review of a WCMSA proposal should be more than cursory since it will impact the injured worker’s post settlement medical issues. A detailed analysis of the WCMSA and non-Medicare covered expenses is the gold standard to protect your practice and the injured worker.

Synergy Settlement Services team of MSP compliance attorneys can assist you with this type of analysis and guide you through the MSP compliance process. Don’t ever rely upon the carrier to do the necessary work to protect your client, engage your own MSP compliance experts like Synergy here!

How Does Medicare Decide Which Payments Are Conditional?

February 9, 2023

Rasa Fumagalli, JD, MSCC, CMSP-F

Settlements involving Medicare beneficiaries require additional scrutiny to ensure compliance with the MSP Act. While the Act generally prohibits Medicare from making payment when payment is expected from a primary payer (workers’ compensation plan, liability insurance plan or no-fault insurance), an exception is made when payment is not expected to be made promptly or within 120 days of receipt of the claim. In such cases, Medicare will make payment, but it is conditioned upon the reimbursement of the payment to the Medicare Trust Fund. Compliance with the MSP Act is essential to ensure that Medicare is not making payments for which it is not responsible for.

Primary payers have an obligation to reimburse the Medicare Trust Fund for any payments made on behalf of a Medicare beneficiary. This obligation is demonstrated by a judgment, payment conditioned upon release of liability, or other means, as enumerated in 42 C.F.R. §411.22. Failure to reimburse may result in Medicare filing suit directly for double damages according to 42 U.S.C. §1395y(b)(2)(B)(iii) and 42 U.S.C. §1395y(b)(3). The Centers for Medicare & Medicaid Services (CMS) Memo from December 5, 2011, further notes that Medicare Advantage Organizations (MAOs) and Prescription Drug Plans (PDPs) have the same rights of recovery as Medicare under the MSP Act. This article will discuss the interplay between annual reporting and recovery thresholds, Section 111 Mandatory Insurer Reporting, and conditional payment recovery. A subsequent article will address Medicare’s interest when it comes to post-settlement injury-related treatment.

Annual Reporting and Recovery Thresholds

Prior to 2014, CMS often spent more money pursuing a conditional payment recovery claim than the claim was worth. To address this issue, the Strengthening Medicare and Repaying Taxpayers Act of 2012 (“SMART Act”) was signed into law in January of 2013. The SMART Act requires CMS to publish annual “settlement threshold” figures as of November of 2014. If a settlement falls below the annual threshold, the settling parties are exempt from MSP compliance obligations. This amendment has helped to streamline the conditional payment recovery process and save CMS resources.

On December of 2022, CMS published the 2023 recovery thresholds for liability, no-fault insurance, and workers’ compensation settlements, judgments, award, or other payments. Effective January 1, 2023, CMS’s threshold for physical trauma-based liability insurance settlements is $750.00, meaning settlements of $750 or less do not need to be reported and Medicare’s conditional payments related to the cases do not need to be repaid. The same threshold applies to no-fault insurance and workers’ compensation settlements, provided the insurers do not have an ongoing responsibility for medicals.

Section 111 Mandatory Insurer Reporting

To effectively implement the Medicare Secondary Payer (MSP) framework, Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) was enacted, establishing the Mandatory Insurer Reporting requirement. This enforcement mechanism notifies Medicare of settlements involving Medicare beneficiaries and began in January of 2011. According to CMS, the Section 111 MSP reporting process is designed to ensure Medicare is properly reimbursed for items and services provided to beneficiaries.

Section 111 reporting is the responsibility of a Responsible Reporting Entity (RRE) to Medicare for liability, no-fault, and workers’ compensation plans and insurers. The RRE must report to Medicare if the plan has an Ongoing Responsibility for Medical (ORM) or if the Total Payment Obligation to the Claimant (TPOC) is greater than the threshold of $750.00. Additionally, the RRE must query the Medicare system regularly to identify when a claimant becomes eligible for benefits while the claim is still open.

Under the Section 111 reporting requirements, the RRE must provide the injury victim’s first name, last name, date of birth, gender, Medicare Beneficiary Identifier (MBI), and Social Security Number (or the last five digits). Additionally, the RRE must report International Classification of Diseases (“ICD”)-10 diagnosis codes for the illnesses/injuries alleged, claimed or released in the Total Payment Obligation to Claimant (TPOC) settlement, judgment, award, or other payment. CMS encourages RREs to supply as many valid ICD-9/ICD-10 Diagnosis Codes as possible for the most accurate coordination of benefits. However, in CMS’s recent webinar on Section 111 reporting, it was cautioned against submitting diagnosis codes for pre-existing or unrelated conditions, even if included in the initial medical records. The TPOC report must also include the date and amount of the settlement.

If the RRE fails to comply with Section 111 reporting obligations, they may face a penalty of up to $1,000 per day per claim. As of January 2023, this penalty has yet to be enforced although the imminent arrival of final regulations on Civil Monetary Penalties for Section 111 violations will likely change this. A scenario where CMS may impose penalties is when the RRE submits information that conflicts with their later position when CMS attempts to recover conditional payments.

The Role of ICD-10 Diagnosis Codes in Conditional Payment Recovery

ICD codes are maintained by the World Health Organization (“WHO”) and are designed as an international health care classification system used to collect morbidity and mortality statistics, develop claim reimbursement systems, and conduct disease-related surveillance. To ensure greater accuracy, the Centers for Medicare and Medicaid Services (CMS) adopted ICD-10 codes for Section 111 Mandatory Insurer Reporting for all claim reports with an accident date on or after April 1, 2015. This switch offered five times more diagnosis codes than those found in the ICD-9 system.

The conditional payment recovery process may begin either with the Medicare beneficiary self-reporting the accident or the RRE fulfilling its Section 111 Mandatory Insurer Reporting obligation. When reporting the accident to Medicare, the beneficiary or their representative must provide diagnosis codes for the injured body part. If the beneficiary or representative self-reports through the Medicare Secondary Payer Recovery portal, they can select a specific code, a range of codes, a list of codes, or enter a text description of the diagnosis. The RRE’s Section 111 Mandatory Insurer report will also include ICD-10 diagnosis codes claimed or released in the Total Payment Obligation to Claimant (TPOC) settlement, judgment, award, or other payment. Medicare will use these codes to determine the amount of conditional payment recovery.

Medicare uses the ICD-10 code information to search their database and identify related payments. However, at times, their conditional payment letters will seek reimbursement for services unrelated to the injuries suffered by the beneficiary. This could be due to an algorithmic error or improper bundling of treatments for both unrelated and related conditions. Therefore, it is essential to review the payment summary form carefully to identify and dispute any erroneous payments. When enrolled in a Medicare Advantage plan (Part C or Part D), the plan must be contacted directly to resolve any reimbursement claims, and the itemized Explanation of Benefits should be carefully examined to dispute any inappropriate recovery attempts.

Conclusion

The MSP Act provides a comprehensive framework for Medicare to protect itself from overpayments and ensure that applicable settlements are reported. With the help of Section 111 Mandatory Insurer Reporting and ICD-10 codes, Medicare has the tools to identify and recover funds when a primary payer is available. Considering the significant role that ICD-10 codes play in the conditional recovery process, parties should be aligned in their selection of codes as well as the accident dates.

The Synergy Settlement Services team of MSP compliance attorneys and lien resolution specialists have the expertise to advise you on these matters, so that you are compliant with the intricacies of the Medicare Secondary Payer Act. Contact us for more information.

John Blumberg on TLV Podcast

Welcome to Trial Lawyer View a podcast designed to bring you insights on the latest legal trends and strategies from some of the best trial attorneys in the country. In this episode, Host Jason D. Lazarus, J.D., LL.M., MSCC, CSSC sits down with John Blumberg of Blumberg Law Offices and the author of Persuasion Science for Trial Lawyers. John is a master of the courtroom, and he will provide us an in-depth look at how persuasion science can help trial lawyers get successful jury verdicts. He shares how his study of the psychology of decision science has helped him understand decision making and opinion formation. Plus, he explains the importance of the Rule of Threes and how his book can help other trial lawyers. Join us for an engaging and informative conversation that you won’t want to miss!

Learn more here.

What Gives Health Care Plans The Right To Recover?

January 12, 2023

Teresa Kenyon, Esq.

Dealing with medical liens is the dreaded case after the case for most personal injury attorneys. As a personal injury attorney, you’ve worked hard to prove the tortfeasor has liability for the damages incurred by your injured client and secure a recovery.

When settlement is reached and the funds are received, ERISA plans, FEHBA plans, hospitals, and providers as well as government benefit programs like Medicaid, Medicare and Military agencies are standing in wait with their greedy eyes on the prize –your client’s settlement money. What gives these plans the right to seek repayment from an injured party’s settlement?

This article focuses on ERISA, FEHBA, Medicare, and Medicare Advantage plan recovery rights. A future article will focus on Military, Hospital/Provider, and Medicaid recovery rights.

ERISA

When an injured party receives their health insurance through an employer provider health insurance, it is more often than not an ERISA plan. The primary exceptions are for government and religious employers. ERISA plans come in two forms: Self-funded and fully insured. These ERISA plans’ recovery rights are subject to different laws based on their funding status. So, when dealing with these plans, understanding and confirming the funding status is the first step to knowing whether the injured party needs to reimburse and for how much.

The seminal case for ERISA plans was the McCutchen[1] decision by the US Supreme Court. This case provides that the ERISA plan policy language is supremely important to the ERISA plan’s recovery right. Because of this, it is vital to obtain the right documents and obtain them from the right place – this starts with the Master Plan Document and a request directly to the employer group.

FEHBA

FEHBA plans are for federal employees. The seminal decision by the US Supreme Court in Nevils[2] occurred in 2017 where it was held that insurance carriers operating under FEHBA can assert subrogation and reimbursement rights despite any state laws stating otherwise. The decision primarily focused on federal preemption. Otherwise, there has not been much litigation on FEHBA plans and their right to recover. As such, subrogation vendors for these plans stand firm until challenged.

Medicare (Parts A and B)

For traditional Medicare, there isn’t a pivotal case to look to. Instead, Medicare relies upon strong statutory rights for the government to collect. The Medicare Secondary Payer Act prohibits traditional Medicare from making payment when a primary plan should make the payment.[3] This is the case when the Medicare beneficiary is injured, has medical treatment that is paid for by Medicare, and is entitled to compensation by another “plan” or entity like no-fault, Workers’ Compensation, or liability insurance. However, there is one exception to this rule where Medicare is allowed to make payment on the condition that it be paid back. The exception authorizes Medicare to make a conditional payment if the primary plan “has not made or cannot reasonably be expected to make payment with respect to such item or service promptly.”[4]

To resolve conditional payments, a beneficiary must notify Medicare through the Benefits Coordination & Recovery Center (BCRC). The BCRC begins identifying claims that Medicare has paid conditionally that are related to the case based on information reported regarding the type of incident, illness, or injury alleged. Medicare’s recovery rights run from the “date of incident” through the date of settlement/judgment/award. A beneficiary or their representative may dispute claims added to Medicare’s Conditional Payment ledger. Once the case settles, Medicare is to be notified and a Final Demand is issued.

Once a Final Demand is issued, the beneficiary may request a Waiver[5] or Compromise[6]. If the Final Demand has already been paid, the beneficiary will receive a refund from Medicare if the request is granted. To obtain a Waiver of Medicare’s interest, there must be financial hardship. An SSA-632 form must be completed which provides financial information about the beneficiary. Medicare can also grant a Waiver if Medicare’s reimbursement would be against “equity and good conscience.” Lastly, a Compromise can be requested where the beneficiary offers a reduced reimbursement to Medicare. Medicare may choose to accept the compromise based on an assessment of three factors: 1) whether the cost of collection justifies the enforced collection of the full amount of the claim; 2) an understanding on whether the beneficiary is able to pay within a reasonable time; and 3) whether the chances of successful litigation are questionable, making it desirable to seek a compromised settlement.

Medicare Advantage (Part C)

The Medicare Act permits a Medicare beneficiary to choose a private insurance carrier as their Medicare administrator versus receiving benefits from traditional Medicare. This is known as a Medicare Advantage Plan. Medicare Advantage Plans are governed by the Medicare Act and funded by CMS.[7] Medicare Advantage Plans are administered by insurance carriers like Aetna, Humana, Blue Shield, and United.

The seminal Medicare Advantage case was decided in 2012.[8] The Third Circuit found under the Medicare Act that a Medicare Advantage Plan has the same rights as traditional Medicare. Specifically, that the Advantage Plan has a private cause of action against primary payers and can collect for double damages if not reimbursed.

The ongoing issue s is that subrogation vendors representing the Medicare Advantage plans claim the same rights as Medicare but do not accept that they have the same responsibilities. Through a variety of misinterpretations and bad law, these Medicare Advantage recovery vendors often feel they have more rights than traditional Medicare. They believe they can collect as Medicare but do not have to reduce for procurement costs as is required under the Act. Medicare Advantage plans also do not have appropriate appeal systems set up and appear to be completely clueless about the fact that traditional Medicare often grants waivers and compromises including refunds post payment of the Final Demand.

Summary

Assessing the reimbursement rights of health insurance companies and medical benefit programs is a required part of representing an injury party. However, full reimbursement of their demand is not always required. There are many avenues to explore whether the Plan has right to claim what they are demanding and a variety of reasons that they may not have the right to receive as much as they are asking for from the injury victim.

Synergy is your lien resolution partner. Our team of experts have hundreds of years of combined experience in handling liens, dealing with insurance carrier recovery departments and subrogation vendors. By partnering with Synergy’s deep team of lien resolution experts today, you can put their decades of subrogation experience to work for you and your client accelerating the resolution of liens. Now is the time to leverage our subrogation-busting team to resolve troublesome and time-consuming liens.

Learn more about partnering with Synergy for all your lien resolution needs.

[1] US Airways v McCutchen, 569 U.S. 88 (2013)

[2] Coventry Health Care of Missouri v Nevils, 581 U.S. 87 (2017)

[3] 42 U.S.C. § 1395y(b)(2)(A)

[4] 42 U.S.C. § 1395y(b)(2)(B)(i)

[5] § 1870(c) of the Social Security Act (42 CFR § 405.355 and 20 CFR 404.506-512)

[6] See Federal Claims Collection Act of 1966 (31 USC § 3711) §§ 1870(c) and 1862(b) of the Social Security Act

[7] 42 U.S.C. § 1395w-21

[8] Avandia Marketing etc. adv. Humana Medical Plan, 685 F.3d 353(3rd Cir. 2012)