H.R. 1063 – Saving Medicare and Repaying Taxpayers Act Update

Russell S whittle, Esq VP MSP ComplianceOn Wednesday, September 21, 2011, the Medicare Advocacy Recovery Coalition (MARC) convened a General Membership Meeting followed by visits with members of Congress in Support of the Saving Medicare and Repaying Taxpayers Act (SMART Act), or H.R. 1063.

H.R. 1063 Positive Support

H.R. 1063 has been positively received by the House of Representatives, gathering 44 co-sponsors as of this posting. More importantly, the bill has bipartisan support with nearly as many Republicans as Democrats working for its enactment into law. The MARC Coalition can now begin to turn its attention to the Senate where the Bill has also been favorably reviewed.

Coalition Visits The Hill

Coalition members met with the office of Senator Ron Wyden (D-OR) and expressed their frustrations with Medicare Secondary Payer Act compliance and the urgency for reform as Mandatory Insurer Reporting fully takes effect in the coming year. Also in attendance was a representative from the office of Senator Rob Portman (R-OH). Certainly, Senate endorsement and support is critical to the effort to bring needed reform to the mechanism of Medicare’s subrogation recovery in personal injury cases.

I was privileged to meet with staffers from the offices of Representative Mike Rogers (R-AL) and Representative Frank Pallone (D-NJ). The Congressmen are aware of the current untenable position that beneficiaries and litigants are facing and were very interested in both the position and performance of the Centers for Medicare and Medicaid Services (CMS) in lien recovery efforts. I was advised several times during the day that the Oversight Committee Hearing of June 22, 2011 was instrumental in bringing Medicare compliance issues to the attention of lawmakers.

Moving Forward

The MARC Coalition is optimistic that there will be some major movement towards a vote on the Bill by year’s end. Certainly, with Congress debating healthcare and the Medicare system itself, the time seems right to bring the certainty and clarity to litigants and to the Medicare Trust Fund that the Bill promises.


About the Author: Russell S. Whittle, Esq., is the Vice President of MSP Compliance for Gould & Lamb, LLC. In his twenty plus years of practice prior to joining Gould & Lamb, LLC, Mr. Whittle practiced primarily in the area of insurance defense, representing the interests of large insurers and employers in both workers’ compensation and general automobile liability matters.

H.R. 1063, Strengthening Medicare and Repaying Taxpayers Act

Russell S whittle, Esq VP MSP ComplianceMARC Coalition Endorses H.R. 1063, The Strengthening Medicare and Repaying Taxpayers Act, Before Congressional Subcommittee

A hearing was conducted by the Subcommittee on Oversight and Investigations, Committee on Energy and Commerce on Wednesday June 22, 2011 at the Rayburn Building in Washington D.C., to discuss the MARC Coalition’s H.R. 1063, the Strengthening Medicare and Repaying Taxpayers Act. Representatives of the MARC Coalition, Marc Salm, Vice President of Risk Management for Publix Supermarkets, Scott Gilliam, Vice President and Government Relations Officer for Cincinnati Insurance Companies, Jason Matzus, a Personal Injury Attorney at Raizman, Frischman & Matzus and Ilene Stein, Federal Policy Director for the Medicare Rights Center presented testimony to the committee on behalf of the bill. Deborah Taylor, Chief Financial Officer and Director, Office of Financial Management for Center for Medicare and Medicaid Services (CMS) testified as did James C. Cosgrove, Director, Health Care, United States Government Accountability Office. The hearing was an important next step in the MARC Committee’s attempt to modify the Medicare Secondary Payer (MSP) Act.

The bill alters the current procedural aspects of Medicare’s conditional payment subrogation efforts in workers’ compensation and tort cases by imposing time constraints, establishing recovery lien thresholds, applying a set statute of limitations to recovery efforts, and removing a beneficiary’s social security number as an identifier, among other significant changes. As I have written previously, Gould & Lamb endorses the bill and views it as an effort to bring certainty and clarity to an otherwise seemingly endless and inefficient system that, in its current form, benefits neither litigants nor Medicare. Both Gould & Lamb’s President and Chief Operating Officer, Deborah Pfeifle and I, met frequently with members of the United States House of Representatives and the United States Senate in anticipation of the hearing as did the other members of the MARC Steering Committee. I was privileged to attend the hearing on the 22nd.

CMS and MSPRC Performance Scrutinized

Ms. Taylor and Mr. Cosgrove were allowed to enter written statements and were then questioned by the Subcommittee members. Ms. Taylor testified that Medicare is responsible for approximately 413,000 Secondary Payer claims and that that number comports with the amount of claims received last year. She also acknowledged that the implementation of Mandatory Insurer Reporting has doubled the CMS workload over the last eighteen months. She estimated that CMS has recovered $600,000,000.00 as a result of the CMS conditional payment recovery efforts. Ms. Taylor advised, however, that she was not aware of the median amount of the conditional payment claims sought to be recovered, the average response time of the Medicare Secondary Payer Recovery Contractor MSPRC or the rejection rate of data electronically transferred to Medicare which may trigger recovery efforts. Significantly, she discussed the performance of MSPRC and acknowledged “problems” including the fact that the MSPRC is overwhelmed with their workload. In response to these efficiency concerns, CMS visited the MSPRC “several times” and has begun rewriting the Statement of Work that guides MSPRC. While CMS has considered setting a threshold amount below which recovery efforts will not be made, no policy has been formulated.

Mr. Cosgrove essentially advised the Subcommittee that he was unable to objectively measure the performance of CMS and was unable to testify about the efficiency of the process. He explained that the system has five elements: notification, negotiation, resolution, reporting and recovery. However, he has been unable to gather data to quantify the process and its effect on beneficiaries or the Medicare Trust Fund. Significantly, he promised that a report was forthcoming outlining the recommendations of the GAO but that it was “far down the road.” He expected to complete the report, perhaps, by year’s end.

The Subcommittee, particularly Chairman Cliff Stearns (R-FL), seemed quite unsatisfied with the CMS presentation and the lack of concrete data or knowledge of MSPRC performance, the amount of potential recovery dollars, and the reasons for the 120-150 day lag in requests for conditional payment information and its receipt. For the MARC Committee, Ms. Taylor’s testimony underlined the seeming lack of institutional control exercised by CMS over the MSPRC. Clearly, the testimony proved that Mandatory Insurer Reporting has exponentially increased the workload of a system already strained to the breaking point. No cogent arguments were raised by Ms. Taylor or Mr. Cosgrove to account for the failure of the MSPRC to adhere to CMS internal guidelines or policies.

Mr. Salm and Mr. Gilliam presented the perspective of the self insured and insurance carrier, respectively and further pointed out the need for recovery thresholds, the necessity of receipt of information before settlement, the lack of a limitations period and the potential that even small settlements would trigger reporting requirements and potential recovery efforts. Both witnesses provided numerous accounts of CMS and MSPRC lack of responsiveness and its effect on their businesses and Medicare beneficiaries.

Mr. Matzus provided the perspective of the trial lawyers and their frustrations encountered on behalf of beneficiary litigants. Ms. Stein added testimony regarding the difficulty of receiving information from the MSPRC and the procedural roadblocks she has experienced in her work on behalf of beneficiaries.

Gould & Lamb and MARC Coalition Will Continue To Discuss H.R. 1063 Merits

CMS was asked to provide the Subcommittee with the information requested and promised to do so. Disturbingly, the CMS representatives did not remain in the Subcommittee hearing room to listen to the testimony of the other witnesses or to hear the questions and concerns of the other legislators. Perhaps we can assume that their early exit was to begin to remedy the problems brought to their attention by the MARC bill? It would appear that further hearings will be scheduled and perhaps CMS will be able to more completely explain their work model and convince lawmakers that the problems in the implementation of the Medicare Secondary Payer  and MMSEA does not require a legislative fix but, rather, an internal one. In the interim, Gould & Lamb, with the MARC Committee, will continue to discuss the merits of H.R. 1063 with the 112th Congress.