Registration Link for Free CEU Webinar Covering Medicare Compliance Updates

Staying current on Medicare Secondary Payer issues can be a challenge. Join us on September 16, 2014 at 1:00 PM CST for a free webinar during which attorney Melisa Zwilling will discuss the most recent Medicare compliance developments you need to know. In addition, she will share information on how you can save tremendous dollars on both conditional payment claims and MSAs.  This webinar will cover both liability and workers' compensation topics. Click on the following link to register and secure your spot now:  

https://www4.gotomeeting.com/register/159112759

 

CE credit for this webinar is available for AL, CA, FL, GA, KY, LA, MS, NC, NH, OK, and TX.  In order to receive CE credit, you must provide your license number and the state for which credit is requested at the time of webinar registration.

New CMS Alert Concerning Reporting in Exposure, Ingestion and Implant Cases

On August 19, 2014, CMS issued an alert addressing Section 111 reporting obligations and Medicare's recovery of conditional payment claims in liability cases involving alleged injuries due to exposure, ingestion, or implant prior to December 5, 1980. The alert clarifies that CMS will look to the dates alleged in the "most recently amended operative complaint or comparable supplemental pleading" to determine whether Section 111 reporting is required and whether Medicare will seek recovery of conditional payment claims. The alert provides as follows:

 

In the following situations, Medicare will assert a recovery claim against settlements, judgments, awards, or other payments, and the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) Section 111 MSP mandatory reporting rules must be followed:

• Exposure, ingestion, or the alleged effects of an implant on or after December 5, 1980, is claimed, released, or effectively released in the most recently amended operative complaint or comparable supplemental pleading; 
• A specified length of exposure or ingestion is required for the claimant to obtain the settlement, judgment, award, or other payment, and the claimant’s date of first exposure plus the specified length of time in the settlement, judgment, award or other payment equals a date on or after December 5, 1980. This also applies to implanted medical devices; and
• A requirement of the settlement, judgment, award, or other payment is that the claimant was exposed to, or ingested, a substance on or after December 5, 1980. This rule also applies if the settlement, judgment, award, or other payment depends on an implant that was never removed or was removed on or after December 5, 1980.

When ALL of the following criteria are met, Medicare will not assert a recovery claim against a liability insurance (including self-insurance) settlement, judgment, award, or other payment; and MMSEA Section 111 MSP reporting is not required. (Note: Where multiple defendants are involved, the claimant must meet all of these criteria for each individual defendant for a settlement, judgment, award, or other payment from that defendant to be exempt from a potential MSP recovery claim and MMSEA Section 111 reporting):

• All exposure or ingestion ended or the implant was removed before December 5,1980;
• Exposure, ingestion, or an implant on or after December 5, 1980, has not been claimed in the most recently amended operative complaint (or comparable supplemental pleading) and/or specifically released; and
• There is either no release for the exposure, ingestion, or an implant on or after December 5, 1980, or where there is such a release, it is a broad general release (rather than a specific release), which effectively releases exposure or ingestion on or after December 5, 1980. The rule also applies if the broad general release involves an implant.

Any operative amended complaint (or comparable supplemental pleading) must occur prior to the date of settlement, judgment, award, or other payment and must not have the effect of improperly shifting the burden to Medicare by amending the prior complaint(s) to remove any claim for medical damages, care, items and/or services, etc.

Where a complaint is amended by Court Order and that Order limits Medicare’s recovery claim based on the criteria contained in this alert, CMS will defer to the Order. CMS will not defer to Orders that contradict governing MSP policy, law, or regulation.

Medicare Must be Reimbursed for Conditional Payments Made on the Plaintiff's Behalf

In Taransky v. Sec’y of the United States HHS, 2014 U.S. App. LEXIS 14408 (3rd. Cir. July 29, 2014), the Plaintiff was injured from a fall at a New Jersey shopping center in 2005.  Throughout the settlement negotiations, Plaintiff’s attorney contacted Medicare multiple times in an effort to obtain the amount of Medicare’s conditional payment claim.  After settlement was reached, Plaintiff filed a motion in the New Jersey Superior Court requesting that the Court issue an order apportioning the settlement funds and, notably, stating that no portion of the settlement funds was for medical expenses because the New Jersey Collateral Source Statute precludes plaintiffs from recovering such expenses already paid by another source (in this case, Medicare).  Despite the fact that the settlement agreement specifically released all claims for medical treatment and medical expense benefits, the court granted her motion and issued an order stating that the settlement did not include any Medicare/medical expenses.

Shortly thereafter, Medicare issued a demand for reimbursement of conditional payment claims in the amount of $10,121.15.  The Plaintiff appealed Medicare’s demand (filing this suit after exhausting all administrative remedies), asserting that Medicare was not entitled to reimbursement from the settlement proceeds.

The Plaintiff argued that a tortfeasor cannot be considered a primary payer under the MSP Act and that the Medicare failed to prove that the tortfeasor had a “responsibility to make payment” for her Medicare expenses, which is a condition precedent for reimbursement.  In response, the Court pointed out that the 2003 amendments to the MSP Act expanded the act to include tortfeasors specifically.  Further, the Court followed existing precedent and held that “the fact of settlement alone, if it releases a tortfeasor for claims for medical expenses, is sufficient to demonstrate the beneficiary’s obligation to reimburse Medicare,” and found substantial evidence that the Plaintiff was compensated for her medical costs.

Finally, the Plaintiff argued she had no obligation to reimburse Medicare because of the New Jersey Superior Court Order stating that no part of the settlement was for medical expenses.  As we know, Medicare will not “seek recovery from portions of court awards that are designated as payment for losses other than medical services,” as long as the order is based on the merits of this case.  Unfortunately the New Jersey Superior Court did not evaluate the evidence or hear the parties’ arguments, and did not adjudicate any substantive issue in the primary negligence suit.  As such, the Court held that the Order was not “on the merits” and “need not be recognized by [Medicare].”  The Plaintiff was responsible for reimbursing Medicare for its conditional payments, despite the Superior Court’s allocation order.
                                           
As CMS has made clear, and as evidenced by this case, when medicals are a consideration in arriving at the settlement, Medicare must be reimbursed for conditional payments made on the claimant’s behalf. An order that is simply rubber-stamped by the court will not relieve the parties of such responsibility.

Providers May Assert Private Cause of Action Against NGHPs

In Michigan Spine & Brain Surgeons, PLLC v. State Farm, 2014 F. App’x 0154P (6th Cir. July 16, 2014), the Sixth Circuit Court of Appeals held that a health care provider could assert a private cause of action under the Medicare Secondary Payer Act against a non-group health plan.  State Farm had no-fault coverage for its insured and denied payment to Michigan Spine & Brain Surgeons on the basis that the treatment provided was related to a pre-existing condition rather than the insured’s accident.  Medicare subsequently paid for the treatment at issue, and Michigan Spine then filed a lawsuit against State Farm asserting a private cause of action under the Medicare Secondary Payer Act.

The Sixth Circuit previously held in Bio-Medical Applications of Tenn., Inc. v. Cent. States Southeast & Southwest Areas Health & Welfare Fund, 656 F.3d 277 (6th Cir. 2011) that health care providers could assert a private cause of action against a group health plan.  Michigan Spine argued that the Sixth Circuit’s holding in Bio-Medical Applications should extend to non-group health plans as well.  State Farm, however, argued that the private cause of action could not apply to non-group health plans based on the statutory language.  The Medicare Secondary Payer Act specifies that “[t]here is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).”  State Farm argued that the private cause of action should not apply to non-group health plans because only group health plans can fail to meet the requirements of both paragraphs (1) and (2)(A) of the Medicare Secondary Payer Act, since paragraph (1) only applies to group health plans.  The court, however, declined to adopt State Farm’s strict interpretation of the statute.  The court decided that Congress must have intended the private cause of action to be read broadly to both group health plans and non-group health plans.  The court took the position that it would not make sense to interpret the statute as requiring a non-group health plan to fail to comply with paragraph (1) in order to be subject to the private cause of action.  Therefore, the court held, a private cause of action could be asserted against a non-group health plan.  The Sixth Circuit remanded the case to the district court for further proceedings.

Although the Sixth Circuit did not mention it specifically, the Michigan Spine decision has the effect of overruling the Western District of Kentucky’s holding in Estate of Clinton McDonald v. Indem. Ins. Co. of North America, 3:12-CV-577, 2013 U.S. Dist. LEXIS 138068 (W.D. Ky. Sept. 25, 2013) that the private cause of action only applies to group health plans.

Save The Date: Free Webinar on Medicare Compliance Updates

Join us on  

September 16th, 2014 

@ 1:00 PM CST

for a free webinar where Melisa Zwilling will discuss current Medicare Compliance issues. 

Contact us today to reserve your spot!