MEDICARE COMPLIANCE
Welcome to Synergy’s blog page dedicated to the topic of Medicare compliance. Our team of Medicare experts share their InSights and knowledge on the latest developments and best practices for law firms to stay compliant with the MSP. Stay up-to-date with the latest trends and strategies to ensure that you have the information you need to navigate the complex world of Medicare compliance. Our blogs provide practical tips and advice for ensuring that your clients receive the medical care they need while complying with Medicare’s requirements. Let our experts guide you through the intricacies of Medicare compliance and help you stay on top of the latest developments in this rapidly-evolving field.
By Jason D. Lazarus, J.D., LL.M., MSCC, CSSC
With Medicare Secondary Payer (“MSP”) Compliance on everyone’s minds these days, it is no wonder that MSP vendors have tried to capitalize on these fears by offering services targeting them. The problem is that some of these vendors may be doing more harm than good. There is a national MSA provider and vendor that is offering an opinion letter to plaintiff personal injury attorneys (and to a lesser extent defendants) stating that no MSA is needed in certain liability settlements. The letter provides a false sense of security. The letter focuses on the risk of Medicare targeting the personal injury attorney with a recovery action. However, that isn’t the real risk. The real risk, and it is a big one, is that the plaintiff attorney might be sued for legal malpractice if a Medicare eligible client is denied future injury related care as a result of the settlement without being informed of their options or properly protected when it comes to the MSP. With the implementation of mandatory insurer reporting for Medicare beneficiaries, all defendants must report settlements[1] (currently 50k or more) to Medicare. Reporting includes the ICD9 codes related to the claimed injuries. Reporting allows Medicare to flag those ICD9 codes and then deny payment for that future injury related care. If the client is denied Medicare coverage for injury related care, what good is that no-MSA letter provided by this vendor?
In the case of a denial of future injury related Medicare covered services, the client would be left with a Medicare appeals process that does not let them see the inside of a court room for 420 days in certain circumstances[2]. Who would the client sue if that were the case? While they likely would have a claim against the vendor that provided that letter, the more attractive target may be their own attorney that turned to this particular vendor and secured the letter on their behalf. Legal malpractice exposure related to denial of future Medicare injury related benefits could be in the hundreds of thousands of dollars. It is a very large exposure for plaintiff, personal injury practitioners and one that should not be taken lightly. This is particularly so in the case of attorneys who rely on these opinion letters issued without a solid legal basis or foundation. In reviewing said letter, it appears there are some misstatements and major inaccuracies. Below I will delve into these issues and address the alternatives to a “no-MSA” opinion letter for those that are Medicare beneficiaries.
As a preliminary matter, I must make clear that the only time a personal injury lawyer needs to address this issue is if their settlement involves a Medicare beneficiary or arguably[3], those who have a “reasonable expectation” of becoming a Medicare beneficiary within 30 months. A fundamental flaw with the letter created by this particular vendor, in my opinion, is that it acknowledges an obligation to address Medicare’s future interest but then opines it isn’t necessary simply because the recovery was too small. Fundamentally, that is problematic because there is no basis for that assumption. Furthermore, the letter states, inaccurately, that “[f]ederal laws establishes MSAs to prevent legally responsible parties in workers’ compensation or liability settlements from permanently shifting the burden of future medical expenses for injury related care to Medicare.” There are no such “laws”. There are some regulations that can be cited for the proposition that you can’t shift the burden in workers’ compensation cases when a Medicare beneficiary settles his or her claim. Those regulations are inapplicable to liability settlements and are irrelevant in the context of a letter addressing whether to implement a liability set aside. A more accurate statement would be that currently Medicare interprets the Medicare Secondary Payer Act as requiring protection of Medicare’s future interests when resolving a liability case.
The letter I reviewed was written in the latter part of last year. It says that CMS has issued no guidance about when or how to use MSAs in third party liability cases. That simply is not true. There are two handouts/memorandums issued last year that address Medicare Set Asides in third party cases. The first and most important is the Stalcup handout/memo issued in May of 2011 by the Dallas Regional Office Director for CMS, Region 6. The handout, by its own words, indicates there are no “laws” requiring a set aside. However, the handout does indicate that the law does require “the Medicare Trust Fund be protected from payment for future services whether it is a Workers’ Compensation or liability case.” CMS’ method of choice for protecting the Medicare trust fund from making payments for future Medicare injury related care is a set aside according to the Stalcup handout/memo. The Stalcup handout is not a memo from CMS’s headquarters and only applies to the states the Dallas regional office covers so it is limited in scope. The second is a memo from the CMS headquarters office in Baltimore issued in September of 2011. In this memo CMS provides a procedure to avoid establishing a liability Medicare set aside. The memo provides that if the treating physician certifies in writing that the treatment for the injuries suffered in the accident are complete and that future Medicare covered services for the injury will not be required then a set aside isn’t necessary. The Stalcup handout/memo is consistent with the public statements CMS has made regarding MSAs in liability cases. The September 2011 memorandum from CMS HQ tells us when you don’t have to establish a liability Medicare Set Aside which presumably means CMS’s position is that in certain cases you do have to establish a liability Medicare Set Aside. Accordingly, it is difficult to claim CMS has provided no guidance about liability Medicare Set Asides.
What I don’t disagree with is the methodology the letter employs in terms of its analysis of whether the set aside issue needs to be addressed. First, the letter analyzes whether there is a permanent burden shift from a primary plan (liability insurer) to Medicare for future injury related care and the injury victim’s need for future injury related care. If those two issues are addressed with a yes, then the letters says to look at Medicare entitlement or reasonable expectation within 30 months[4]. If the answer is yes, then look at whether the claim resolves future medical. If yes, then the letter says to look at the gross recovery to determine whether it compensates the injury victim for future medicals based upon a damages versus recovery analysis. This is where the analysis goes astray as there is absolutely nothing in the letter which examines the damages suffered versus what was recovered to support the opinion of no MSA being needed. I would assert there is nothing which would ever support this type of opinion. I will explain why further below.
Ultimately the letter says that although the vendor recognizes the injury victim client IS AN MSA CANDIDATE, an MSA is not warranted since the settlement does not contain sufficient proceeds to cover future injury related medical expenses. While I believe you can potentially get to that opinion in the right case, there is no analysis or justification in the opinion letter I reviewed for that position. I would propose that there is a much better way to deal with this issue and one that would protect the attorney from a legal malpractice claim instead of focusing on whether Medicare might bring a recovery action. There is no law that provides for Medicare to recover damages in the context of failure to establish a set aside. There would have to be a large extension of current conditional payment recovery laws under the MSP to justify any type of potential action to recover in the area of Medicare set asides. Even if such an action were allowed, what would be the damages anyway? There would only be a few scenarios where there is a potential for damages but as far as I know there has not been a single action by Medicare against any personal injury attorney in workers’ compensation cases or liability settlements that deal with failure to establish a set aside. How could Medicare bring an action against a plaintiff attorney when there is no way that the attorney can force a client to set money aside if the injury victim refuses? That really isn’t the primary issue though.
Getting back to an alternative solution to the situation where the case involves a Medicare beneficiary but there are limited settlement dollars. Instead of just focusing on an opinion related to having no MSA, it makes more sense to estimate the future Medicare covered services and then apply an appropriate reduction methodology. If you are going to recognize the need for an MSA like this vendor does in the letter, shouldn’t you do the analysis and justify a very small set aside with a proper analysis? So what would that look like? I would propose the following hypothetical: Case is settled for $50,000 policy limits. 40% fee of $20,000 and costs of $2,500. There is a small Medicare lien of $5,000. Client will net $22,500. An MSA estimate provides that Medicare’s exposure for future injury related care is $100,000. The total value of the case if there had been no policy limits is $1,000,000. The client has recovered 2.25% of their total damages. The set aside based on an Ahlborn type of analysis[5] would be $2,250. That type of analysis is what I would suggest adequately protects the attorney and the client. While I would acknowledge that CMS has never approved this type of methodology, they have not disapproved of it either. What CMS has said in the two memorandums issued in 2011 is that you have to properly address this issue. An opinion letter that recognizes a set aside obligation in a liability settlement but then arbitrarily says not to set aside any money because of the small size of the settlement doesn’t afford much protection, if any. Isn’t it a false sense of security they are selling? Is it worth the exposure for the personal injury attorney? Is it worth the potential loss of Medicare entitlement for injury related care for the injury victim? Wouldn’t it be better to just set aside the $2,250 after a defensible analysis?
There will be certain cases where the MSA estimate and reduction methodology does not yield enough of a reduction from a practical perspective. For example, if the same scenario I discussed in the same paragraph remained the same but the value of the case was dropped from $1M to $200,000 then the client recovered 11.25% of their damages and the set aside amount would be $11,250. That would consume half of net settlement. In that case, an argument could be made based on the underpinnings[6] of the Ahlborn decision, by analogy, that there should be no set aside because if the client were forced to set aside half of their net recovery then they would be setting aside dollars that aren’t necessarily meant to compensate for future medical. Again, at least there is a rational basis for that argument and an analysis was undertaken to properly address the issue, rather than reliance upon an opinion letter that simply makes some assumptions.
Every lawyer who represents injury victims is going to have to decide what kind of protection they want in this new world of Medicare Secondary Payer Compliance. Making wise choices is critical to avoid a large amount of potential exposure. I believe that anyone who has one of these types of opinion letters discussed in this article has a tremendous amount of risk and exposure. According to the CMS Stalcup handout/memo, if future medicals are funded for a Medicare beneficiary when they settle their case then the attorney “should to see to it that those funds are used to pay for otherwise Medicare covered services related to what is claimed/released in the settlement judgment award.” The responsibility for defense counsel is a little bit different according the handout. If future medical is funded, then defense counsel or the insurer “should make sure their records contain documentation of their notification to plaintiff’s counsel and the Medicare beneficiary that the settlement does fund future medicals which obligates them to protect the Medicare Trust Fund.” “It will also be part of their report to Medicare in compliance with Section 111, Mandatory Insurer Reporting requirements.” So to properly consider Medicare’s future interest according to CMS, it would necessitate advising the client of the obligation to set monies aside and the potential risk of denial of future injury related care if the issue is ignored. Further, potentially engaging in the analysis I outlined above may be prudent for proper consideration of Medicare Secondary Payer Compliance. Failure to properly address this issue can have disastrous consequences for an injury victim and expose plaintiff counsel to potential malpractice claims.
[1] Mandatory insurer reporting was created by amendment to the Medicare Secondary Payer Act by a law entitled the Medicare, Medicaid & SCHIP Extension Act of 2007. MMSEA for short created a requirement for defendant/insurers to report all settlements with Medicare beneficiaries. The requirements are codified at 42 U.S.C. § 1395y(b)(8). The reporting is being phased in with settlements over $100,000 being reported as of 1/1/12 going back to a settlement date of 10/1/11; settlements over $50,000 being reported as of 7/1/12 going back to a settlement date of 4/1/12 and settlements over $25,000 being reported as of 1/1/13 going back to a settlement date of 10/1/12.
[2] There are five levels of Medicare appeals:
- The first level appeal is called a redetermination. Redeterminations regarding claim denials currently are processed by either Fiscal Intermediaries/Affiliated Contractors (FIs/ACs) or Part A and B Medicare Administrative Contractors (A/B MACs). Expedited redeterminations regarding service terminations are processed by Quality Improvement Organizations (QIOs).
- A Reconsideration is the second level of appeal. If you are unhappy with an FI/AC, A/B MAC or QIO redetermination, you can appeal to MAXIMUS Federal Services QIC Part A and request a Reconsideration.
- The third level of appeal is an Administrative Law Judge Hearing (ALJ Hearing). If MAXIMUS Federal Services renders an unfavorable or partially favorable decision, you may seek a third level appeal, called an ALJ Hearing. To qualify for an ALJ Hearing, you must meet the $120 minimum amount in controversy requirement.
- The fourth level of appeal is to the Medicare Appeals Council. If you are unhappy with the ALJ Hearing decision, you may ask the Medicare Appeals Council to review your case.
- The fifth level of appeal is Federal Court. If the amount involved is $1180 or more ($1220 beginning in calendar year 2009), you have the right to continue your appeal by asking a Federal Court Judge to review your case.
See http://www.medicarepartaappeals.com/Default.aspx?tabid=547 for more detailed information on each level.
[3] I say arguably because the “reasonable expectation” standard comes from a CMS memorandum issued related to Workers’ Compensation Medicare Set Asides. The standard is a “review threshold” and applies to settlements $250,000 or greater when the injury victim has a reasonable expectation of becoming a Medicare beneficiary within 30 months. See 4/21/03 CMS Memorandum at Question Two. The memorandum has no applicability to liability settlements.
[4] Because mandatory insurer reporting only covers Medicare beneficiaries it isn’t very likely that someone who may become a Medicare beneficiary in the future would be denied injury related care. That being said, I am not advocating that one can ignore Medicare’s future interest in a liability settlement if that reasonable expectation criteria is met, but there is a legitimate argument for that in the context of a liability settlement.
[5] I would argue that this gets to the very root of the issue dealt with in the Ahlborn US Supreme Court decision. The Ahlborn decision forbids recovery by Medicaid state agencies against the non-medical portion of the settlement or judgment. While admittedly that decision dealt with Medicaid lien issues and the Medicaid anti-lien statute, the arguments by analogy can be applied in the Medicare set aside context. The Ahlborn holding gets at the fundamental issue of whether a lien can be asserted against the non-medical portion of a personal injury recovery. Justice Stevens, in stating the majority opinion, said “a rule of absolute priority might preclude settlement in a large number of cases, and be unfair to the recipient in others.” Isn’t this so in the Medicare set aside context (which is really a future lien)?
[6] The Ahlborn opinion’s central premise is that Medicaid should not be able to asset a lien against the non-medical portions of the recovery. I would argue that that similarly in the context of a Medicare beneficiary, CMS should not be able to compel a Medicare beneficiary to set aside funds for future Medical if those funds are coming from the non-medical portions of the recovery.
With Medicare Secondary Payer (“MSP”) Compliance on everyone’s minds these days, it is no wonder that MSP vendors have tried to capitalize on these fears by offering services targeting them. The problem is that some of these vendors may be doing more harm than good.
By Jason D. Lazarus, J.D., LL.M., MSCC, CSSC
The MSPRC announced today a new alternative for resolving conditional payments. It allows for self calculation of the conditional payment amount when the settlement is $25,000 or less. The substance of the announcement is immediately below.
“Self-Calculated Final Conditional Payment Amount” Option
The Centers for Medicare & Medicaid Services (CMS) will be implementing an option that will allow certain Medicare beneficiaries to obtain Medicare’s final conditional payment amount prior to settlement. This option will be available in February 2012, for certain settlements involving physical trauma based injuries where treatment has been completed. Under this option, the beneficiary or his representative will calculate the amount of Medicare’s conditional payment amount using information received from the Medicare Secondary Payer Recovery Contractor (MSPRC), the MyMedicare website, or other claims information available to the beneficiary. The MSPRC will review this amount and, if finding the amount accurate, will respond with Medicare’s final conditional payment amount within 60 days. To secure the final conditional payment amount, the beneficiary must settle within 60 days after the date of Medicare’s response.
In order to use this option, ALL of the following criteria must be met:
- The liability insurance (including self-insurance) settlement will be for a physical trauma based injury (the settlement does not relate to ingestion, exposure, or medical implant);
- The total liability settlement, judgment, award, or other payment will be $25,000 or less;
- The Date of Incident occurred at least six months before the beneficiary or his representative submits his proposed conditional payment amount to Medicare;
- The beneficiary demonstrates that treatment has been completed and no further treatment is expected either through a written physician attestation or by certifying in writing that no medical treatment related to the case has occurred for at least 90 days prior to submitting the proposed conditional payment amount to Medicare
Explicit instructions on how to use this process will be posted on the Medicare Secondary Payer Recovery Contractor’s website at www.msprc.info by January 15, 2012. CMS will leverage existing processes to the greatest extent possible. This is an initial step to provide beneficiaries and their representatives with Medicare’s conditional payment amount prior to settlement. CMS plans to expand this option as it gains experience with this process.
The MSPRC announced a new option to self calculate a conditional payment amount to submit for approval if the settlement is $25,000 or less.
By Jason D. Lazarus, J.D., LL.M., MSCC, CSCC
Some individuals are “dual eligible” meaning they qualify for both Medicaid and Medicare. In certain cases, a Medicare Set Aside/Special Needs Trust or Pooled Trust Sub-Account may be necessary to preserve the client’s dual eligibility. Medicare Set Asides (“MSA”) are a device used to preserver future Medicare eligibility. When settlement a case it may be prudent to consider setting an MSA when the injury victim is a Medicare beneficiary or reasonably expected to become Medicare eligible within 30 months. A Special Needs Trust or Pooled Special Needs Trust is appropriate for clients receiving Supplemental Security Income (“SSI”) and/or Medicaid benefits. Federal law allows creation of either an SNT or Pooled Special Needs Trust to preserve eligibility for needs based benefits, such as SSI and Medicaid, post settlement of a personal injury claim.
Dual eligibility is not extremely common, but there is a subset of the injury population who will be dual eligible. Understanding who qualifies for both Medicaid and Medicare is vitally important for the personal injury practitioner to insure the injury victim’s benefits are adequately protected. By CMS’s definition, dual eligible clients are those that qualify for Medicare Part A and/or Part B and also qualify for Medicaid programs as well. Medicare coverage can be obtained prior to age 65 if an injury victim qualifies for Social Security Disability. It takes a total of 30 months for someone that is disabled to qualify for Medicare (Medicare coverage begins 24 months after the first SSDI check is received which takes 5 months and includes the month of receipt, so plus 1 month).
Some Medicare beneficiaries have so little income or assets that they also qualify for state programs through Medicaid that pay for certain out of pocket expenses not covered by the Medicare program. There are several different programs that injury victims who qualify for Medicaid may be entitled to that help with expenses not covered by Medicare. In addition, there are services that Medicare does not pay for that can be covered by state Medicaid programs. For example, Medicare does not cover nursing home care beyond one hundred days yet Medicaid does, if one qualifies, cover that care.
The programs that cover out of pocket expenses provide limited Medicaid benefits to those that qualify. Through these programs, Medicaid will pay Medicare premiums, co-payments and deductibles within prescribed limits. There are two different programs. First, is Qualified Medicare Beneficiaries (“QMB”). The QMB program pays for the recipients Medicare premiums (Parts A and B), Medicare deductibles and Medicare coinsurance within the prescribed limits. QMB recipients also automatically qualify for extra help with the Medicare Part D prescription drug plan costs. The income and asset caps are higher[i] than the normal SSI/Medicaid qualification limits. Second is Special Low-Income Medicare Beneficiary (“SLMB”). The SLMB program pays for Medicare premiums for Part B Medicare benefits. SLMB recipients automatically qualify for extra help with Medicare Part D prescription drug plan costs. Again, the income and asset caps are higher[ii] than the normal SSI/Medicaid qualification limits.
Preservation of Public Benefits for those who are Dual Eligible
For injury victims that are Medicare eligible or reasonably likely to be within 30 months, a trial lawyer must carefully consider compliance with the Medicare Secondary Payer Act (“MSP”). For those injury victims receiving needs based benefits such as SSI and Medicaid, planning is necessary to preserve those benefits. Federal law found at 42 U.S.C. 1396p, allows for the creation of either a special needs trust or pooled special needs trust for those meeting the Social Security definition of disability. Assets placed into one of these trusts do not count for purposes of qualifying for needs based benefits. In the remainder of the article I will cover Medicare Set Asides and Special Needs Trust along with the intersection of these two public benefit preservation devices.
About Medicare and Medicare Set Asides
Medicare and Social Security Disability Income (hereinafter SSDI) benefits are not income or asset sensitive. If a client meets the Social Security’s definition of disability and has paid in enough quarters they can receive disability benefits without regard to their financial situation. SSDI is funded by the workforce’s contribution into FICA (social security) or self-employment taxes. Workers earn credits based on their work history and a worker must have enough credits to get SSDI benefits should they become disabled (“fully insured”). Medicare is a federal health insurance program. Medicare entitlement commences 2 years after receipt of the first disability payment from Social Security. Medicare coverage is available without regard to a client’s financial situation.
A client who is a current Medicare beneficiary or reasonably expected to become one within 30 months should concern every trial lawyer because of the implications of the MSP. The MSP is a series of statutory provisions enacted during the 1980s as part of the Omnibus Reconciliation Act with the goal of reducing federal health care costs. The MSP provides that if a primary payer exists, Medicare only pays for medical treatment relating to an injury to the extent that the primary payer does not pay.
In certain cases a Medicare Set Aside may be advisable in order to preserve future eligibility for Medicare coverage. A Medicare set aside is a tool that allows an injury victim to preserve Medicare benefits by setting aside a portion of the settlement money in a segregated account to pay for future Medicare covered healthcare. The funds in the set aside can only be used for Medicare covered expenses for the client’s injury related care. Once the set aside account is exhausted, the client gets full Medicare coverage without Medicare ever looking to their remaining settlement dollars to provide for any Medicare covered health care. In certain circumstances, primarily in workers’ compensation settlements, Medicare approves the amount to be set aside in writing and agrees to be responsible for all future expenses once the set aside funds are depleted.
While there is no requirement to establish a liability Medicare Set Aside, there is ample reason for evaluating whether one should be established. There are currently no guidelines, polices or procedures for Medicare Set Asides in non-Workers’ Compensation cases. Nevertheless, there are ways to insure that Medicare’s interests were addressed when settling with a Medicare beneficiary. The only known sure fire way to do this is with a Medicare Set Aside.
Planning for Medicaid or SSI Recipients
Unlike SSDI and Medicare, Supplemental Security Income (SSI) and Medicaid are income and asset sensitive public benefits that require planning to preserve. In Florida (and most states), one dollar of SSI benefits automatically brings Medicaid coverage. This is very important, as it is imperative to preserve some level of SSI benefits if Medicaid coverage is needed in the future. SSI is a cash assistance program administered by the Social Security Administration. It provides financial assistance to needy aged, blind, or disabled individuals. To receive SSI, the individual must be aged (65 or older), blind or disabled and be a U.S. citizen. The recipient must also meet the financial eligibility requirements.
Medicaid provides basic health care coverage for those who cannot afford it. It is a state and federally funded program run differently in each state. Eligibility requirements and services available vary by state. Medicaid can be used to supplement Medicare coverage if the client has both programs. For example, Medicaid can pay for prescription drugs as well as Medicare co-payments or deductibles.
A special needs trust (SNT) is required if the client is receiving Supplemental Security Income (SSI) or Medicaid. A SNT is a trust whose corpus or any assets held in the trust do not count as resources for purposes of qualifying for Medicaid or SSI. Thus a personal injury settlement can be placed into a SNT so that the victim can continue to qualify for SSI and Medicaid. Federal law authorizes and regulates the creation of a SNT. 42 U.S.C. §1396p(d)(4)(A)-(C) governs the creation and requirements for such trusts. First and foremost, a client must be disabled in order to create a SNT.
There are 3 primary types of trusts. First is the (d)(4)(A) trust which can only be established for those who are disabled and are under age 65. This trust is established with the personal injury victim’s settlement funds and is established for the victim’s own benefit. Second is a third party SNT which is established and funded by someone other than the personal injury victim (i.e., parent, grandparent, donations, etc. . .) for the benefit of the personal injury victim. The victim still must meet the definition of disability. Third is a (d)(4)(c) trust typically called a pooled trust that may be established by the injury victim with their own funds without regard to age restriction.
The Intersection of Medicare and Medicaid – SNT/MSA
If you have a client that is a Medicaid and Medicare recipient, extra planning may be in order. If it is determined that a Medicare Set Aside is appropriate, it raises some issues with continued Medicaid eligibility. A Medicare Set Aside account is considered an available resource for purposes of needs based benefits such as SSI/Medicaid. If the Medicare Set Aside account is not set up inside a Special Need Trust, the client will lose Medicaid/SSI eligibility. Therefore, in order for someone with dual eligibility to maintain their Medicaid/SSI benefits the MSA must be put inside a Special Needs Trust. In this instance you would have a hybrid trust which addresses both Medicaid and Medicare. It is a complicated planning tool but one that is essential when you have those with dual eligibility.
The Settlement Solutions National Pooled Trust has a sub-account which can be set up as a MSA. This means the assets in the MSA are inside of the pooled special needs trust protecting both Medicaid and Medicare eligibility. There must be a separate non-Medicare pooled special needs trust sub-account which holds monies to pay for the administrative costs and non-Medicare settlement funds. The Medicare Set Aside sub- account can only pay for Medicare covered services related to the injury and can’t be used to pay for any administrative expenses. All administrative expenses must come from the non-Medicare pooled trust sub-account.
To learn more about the Settlement Solutions National Pooled Trust click HERE
To learn more about the MSA sub-account click HERE
[i] Resources must be at or below twice the standard allowed under the Supplemental Security Income (SSI) program and income at or below 100% of the Federal poverty level.
[ii] Resources must be at or below twice the standard allowed under the SSI program and income exceeding the QMB level, but less than 120% of the Federal Poverty Level.
Some individuals are dual eligible. In plain English, this means they qualify for both Medicaid and Medicare. In certain cases, a Medicare Set Aside/Pooled Trust Sub-Account may be necessary to preserve the dual eligibility.
By Jason D. Lazarus, J.D., LL.M., MSCC, CSSC
On May 25th, the MSPRC temporarily suspended issuing demand letters. The suspension was apparently due to the Haro v. Sebelius decision from Arizona wherein Medicare was enjoined from certain collection practices. What ensued was a review and changes to its Rights and Responsibilities letters as well as its demand letters. On June 27th, Medicare resumed issuing demand letters and posted samples of the new letters on its website. The new letter contains a few notable changes.
- The first notable change is the addition of language relating to Medicare recovery actions while an appeal or waiver request is pending. The letter indicates that Medicare will not begin a recovery action when an appeal or waiver is pending. This is in conformity with the Haro decision.
- Second, there is language that has been added regarding avoidance of the assessment of interest. According to the letter, if a waiver or appeal is requested/filed then the responsible party may choose to repay Medicare the full amount or the amount it believes Medicare is owed within 60 days to avoid any interest. The letter does warn that “interest accrues on any unpaid balance, which may include any amount you are determined to owe once a decision is reached on your request for waiver of recovery or appeal.” Therefore if it is desired to avoid any interest at all, the full amount should be paid while the appeal/waiver request is pending. The letter does state that “if you receive a waiver of recovery or if you are successful in appealing our decision, Medicare will refund any excess amounts you have paid.” Again, this conforms with Haro.
- Third and last, is the addition of a notice provision procedure prior to a recovery action being instituted by Treasury. The letter states that if “Medicare intends to take collection action (including referral to Treasury), you will be provided with appropriate notice.” “This notice will include information concerning appropriate steps to avoid such actions.”
The changes are subtle but are nevertheless important. The process of resolving Medicare conditional payments is timely and isn’t cost effective for most personal injury firms. Synergy can help resolve Medicare conditional payments freeing up valuable times and resources to litigate/settle cases. Contact us today to see how we can help with lien resolution.
To view the new sample demand letter click HERE
To see other information on Medicare condtional payment recovery issues, visit the MSPRC’s website by clicking HERE
On June 27th, Medicare formally resumed issuing demand letters after it halted issuance in response apparently to the Haro v. Sebelius decision. I will summarize what is new in the demand letter.
By B. Joshua Pettingill & Jason D. Lazarus
The hiring of a Medicare Set Aside (“MSA”) allocation vendor is an important decision when settling a worker’s compensation or liability matter. The future medical costs included in the allocation report can make or break a case. If the MSA allocation is too high, it may hurt the chances of settling the case. If the allocation is too low due to improper calculation of the future medical care covered by Medicare, CMS is not going to approve the MSA. Failure to obtain CMS approval of an allocation can cause a contingent settlement to disintegrate.
Hiring the right MSA vendor is critical to successful conclusion of a case involving a Medicare beneficiary where an MSA will be implemented. Here are ten questions to help guide your decision making process when searching for a MSP compliance partner:
- Does the MSA allocation vendor do work for plaintiffs or insurance companies?
- Are the vendor’s owners & employees certified Medicare set aside consultants (MSCC)?
- What other qualifications and designations do their allocators have?
- Does the vendor have proper E & O coverage?
- Has vendor ever been sued as a result of the work performed?
- Does the vendor more than one person who reviews the MSA before the final report is completed?
- Does the vendor handle liability claims differently than worker’s compensation claims?
- What is their average turnaround time to hear back from CMS?
- What calculations are included in the analysis?
- Can they provide a funding analysis of the MSA using a structured settlement?
You should be very leery of vendors who make outrageous claims such as, “guaranteed acceptance by CMS”. There are MSA vendors who continue to market using these false claims. The problem with this practice is the MSA allocation amount may be overly inflated so CMS will approve it automatically. This can cost the insurance carrier more in terms of settlement dollars. More importantly, an overinflated MSA allocation amount will result in less upfront cash for the plaintiff.
You should also avoid MSA vendors who advertise “lowest defensible allocations”. When a MSA is prepared, there is a very strict methodology that must be employed to comply with CMS guidelines. If the MSA is being submitted to CMS for approval, the Medicare contractor evaluating the allocation is going to review all of the accompanying documentation for both medical treatment and prescriptions. If the allocation amount is too low, they are going to flag the report and revise the amount upward. Once that happens, you are at the mercy of CMS. There is no formal appeal process if CMS comes back with a significantly higher number in place of the artificially low number submitted by an MSA vendor.
A properly calculated MSA allocation should have a rational basis in the medical records and bills attributable to the injury related care prior to settlement. It is imperative to hire a firm who has the experience, knowledge and ability to guide you through all of the pre-settlement, settlement and post-settlement issues that may arise with Medicare Secondary Payer compliance. More importantly, the right experts can insure you and your client are fully protected so you do not have to worry about unforeseen litigation after the claim has been resolved.
To learn more about how Synergy can help with Medicare Secondary Payer compliance and Medicare Set Asides, click HERE.
The hiring of a Medicare Set Aside (“MSA”) allocation vendor is an important decision when settling a worker’s compensation or liability matter. The future medical costs included in the allocation report can make or break a case.
MSPRC Resolution Timeline*
CMS has revamped the Medicare recovery process, creating a more efficient and less questionable path for the verification of Medicare conditional payments. Based on a compilation of facts from www.MSPRC.info, Medicare Correspondence, and daily interaction with MSPRC, we have created a timeline to a serve as a general guide to the Medicare Resolution Process, and what can be expected by all parties entering a settlement with a possible Medicare obligation.
The following is an approximate timeline for the Medicare recovery process*:
- Day 1: Report to Coordination of Benefits Contractor (COBC) by calling 1(800)999-1118.
- Day 2 – 12: The case is transferred to the Medicare Secondary Payer Contractor (MSPRC) from the COBC within 2 weeks.
- Day 14-21: Within (7) days of the record being created in the MSPRC’s database, a Rights and Responsibility (RAR) letter will be sent to the beneficiary and their attorney.
- The MSPRC will begin their claim retrieval process, which takes approximately 8 weeks.
- Day 30 – 65: Effective October 1, 2009 the MSPRC will issue a conditional payment letter to the beneficiary and all authorized parties reflecting Medicare’s recovery amount within (65) days of the date of the RAR.
- An updated conditional payment amount can only be requested every 90 days.
- Day 66 – 95: Once all settlement information has been provided to the MSPRC, the demand should be issued within 10 – 30 days.
Synergy can assist in the resolution of Medicare liens. Contact us at info@synergysettlements.com or by calling us at (877)907-5436 for more information on how we can help.
*The estimated turnaround times for Medicare Conditional Payment summaries and Final Demands can vary and may be prolonged due to volume as a result of the newly implemented reporting requirements under MMSEA Section 111. Further instruction on the Medicare Secondary Payer process is found on www.msprc.info.
CMS has revamped the Medicare recovery process, creating a more efficient and less questionable path for the verification of Medicare conditional payments.
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