By Jason D. Lazarus, J.D., LL.M., MSCC
Representing Medicare-eligible clients in personal injury cases introduces a layer of complexity since it requires compliance with the Medicare Secondary Payer Act (MSP). As trial lawyers, your duty extends beyond securing settlements; you must ensure clients are safeguarded against the potential pitfalls of non-compliance with MSP regulations. Before touching on compliance, it is first important to understand Medicare’s various components and their implications for the injured.
Medicare Program Overview
Medicare is divided into four parts:
Part A – Covers inpatient hospital and skilled nursing facility care.
Part B – Covers outpatient medical services, including physician visits and durable medical equipment.
Part D – Provides prescription drug coverage through private insurers.
Part C (Medicare Advantage Plans) – Offers an alternative, bundling Parts A, B, and D through private insurers.
Eligibility for Medicare typically begins at age 65 or after two years of receiving Social Security Disability Insurance (SSDI) benefits, crucial for many injury victims who qualify due to disability.
The Challenge of MSP Compliance
The MSP Act, established to curb federal healthcare costs, stipulates that Medicare acts as a secondary payer when other insurance (e.g., workers’ compensation, liability insurance and no-fault) is available. This secondary payer status necessitates careful navigation to ensure that Medicare’s interests are considered, particularly when dealing with conditional payments and future medical costs.
Navigating Conditional Payments and Medicare Set-Asides
Two primary issues arise related to MSP compliance:
Conditional Payments – Medicare payments made prior to settlement, which must be reimbursed/ addressed
Medicare Set-Asides (MSAs) – Future medical expenses that Medicare would otherwise cover.
The Medicare, Medicaid, and SCHIP Extension Act (MMSEA) of 2007 heightened the focus on MSP compliance by introducing the Section 111 Mandatory Insurer Reporting (MIR) requirements. Insurers must report the Medicare status of claimants, along with relevant details, to Centers for Medicare & Medicaid Services (CMS)upon settlement. Failure to comply by defendant Responsible Reporting Entities can result in significant penalties which is why you may experience hypervigilance with defense counsel related to Medicare.
Practical Challenges and Solutions
The advent of MIR has introduced challenges, such as ensuring the accurate reporting of medical diagnosis codes (ICD codes) and the correct date of accident. Errors in reporting these data points can lead to problems such as more complicated conditional payment resolution or potential future Medicare claims being denied. To mitigate these issues, trial lawyers should:
Work with opposing counsel to ensure accurate information is reported.
Only agree to precise release language that addresses MSP compliance without imposing unnecessary burdens on the injured party.
Stay informed and proactive in resolving conditional payments and considering MSAs where applicable.
Conclusion
Understanding and navigating Medicare compliance under the MSP Act is essential for trial lawyers. The complexities introduced by the MSP and MMSEA demand a thorough grasp of the regulations and a strategic approach to settlements involving Medicare beneficiaries. By doing so, lawyers can protect their clients’ interests and ensure compliance, avoiding the costly repercussions of non-compliance. Ensuring compliance not only protects clients but also shields the legal practice against potential liabilities. By acknowledging the complexities of MSP compliance and proactively addressing the associated challenges, trial lawyers can better serve their clients and navigate the maze of Medicare settlements with confidence.
Turn to Synergy for experts who can help create a Medicare compliance strategy for your firm to mitigate liability risks and protect clients. Inadequate compliance processes can result in financial liabilities and worse yet damage to your firm’s reputation. Ensure your Medicare processes protect both your clients and your practice by partnering with Synergy for total Medicare compliance. Learn more here.
