Medicare Is Delaying My Settlement

There have been new and old issues that have come up with recent changes in the Medicare rules. In July of 2009 a number of reporting requirements were added. Basically, in each settlement it must be determined if the plaintiff is Medicare eligible. If they are, then there are additional reporting requirements at the time of settlement. There also is a pay back requirement for money that was expended by the system that was caused by the defendant.

The concern has been if there is a requirement for a future set aside. In workers compensation claims, when there is a settlement that included future medicals, some of the money needs to be set aside so that the Medicare system doesn’t pay for those items. The fear that was being pushed by some defendants was that the new rules require a set aside in all cases.

The American Association for Justice followed through on this issue and provided the following information:

… statements from CMS, and other federal entities, make clear that the agency does not require set-asides for liability claims. Since the MMSEA’s passage, CMS has held several Town Hall teleconferences to discuss the Section 111 requirements. During the March 24, 2009 call, Barbara Wright, CMS’ Acting Director of the Division of Medicare Debt Management, made several statements reiterating that Section 111 has no impact on liability MSAs.(2) For example:

• In response to a question as to whether liability set-asides will be required under Section 111, she said “the point is the set-aside process is totally separate from the Section 111 reporting process. As we’ve said in more than one call we don’t anticipate changing our routine recovery process.” (Transcript, pg. 24)
• When explaining that worker’s compensation agreements use a formal review process which makes set-asides recommended, she said that was in contrast to liability agreements. Liability “does not have the same formal review process although our regional offices will consider review of proposed liability set-aside amounts depending on their particular work load and whether or not they believe significant dollars are at issue.”
  (Transcript, pg. 24).

In addition, CMS also has released several Alerts explaining Section 111, which do not indicate any intent to require MSAs for liability claims. For example:

• “Unless you are a business entity which qualifies as [a required reporting entity (RRE)] for purposes of Section 111, you do not need to initiate any specific actions in connection with Section 111.” (CMS Alert, 2/23/09).(3)
• “The new Section 111 requirements do not change or eliminate any existing obligations under the MSP statutory provisions or regulations.” (CMS Alert, 2/23/09).

Moreover, the Congressional Research Service (CRS) provided Congress with an “objective and non-partisan analysis” analysis of the MMSEA. As there was no legislative history regarding the bill, the CRS research report is the most reliable analysis of the MMSEA, including the Section 111 reporting requirements.

CRS’ analysis of the Section 111 reiterates that it is a reporting requirement, and makes no mention of the need for set-asides in liability cases. The Section 111 analysis states, in part:

This provision requires an insurer or third-party administrator for a group health plan (and in the case of a group health plan that is self-insured and self-administered, a plan administrator or fiduciary) to (1) secure from the plan sponsor and participants information required by the Secretary for the purpose of identifying situations where the group health plan is or has been a primary plan to Medicare, and (2) submit information specified by the Secretary. If an insurer or third-party administrator for a group health plan fails to comply, then a $1,000 per day civil monetary penalty will be imposed for each individual for which information should have been submitted.(4)

If CRS believed that the legislative language implies any Congressional endorsement of liability set-asides, it would have been included in this analysis.

It is still expected that with the reporting requirements many cases will be delayed if an amount needs to be determined for the payback. Early recognition of the claim and making sure all of the reporting is done right will make the biggest difference. Experienced attorneys are getting through the system as fast as possible, and will make a difference to clients who need to know their future Medicare coverage will not be put in jeopardy.