MSAs for Liability Cases? – CMS Publishes Timeline for Rulemaking

The Centers for Medicare and Medicaid Services recently published RIN: 0938-AR43 in follow-up to its Advanced Notice of Proposed Rulemaking, originally released on June 15, 2012 (read here). The original ANPRM solicited public comment on a proposed rule regarding  standardized options that CMS was considering making available to beneficiaries and their representatives to clarify how beneficiaries could “meet their obligations to protect Medicare’s interest with respect to Medicare Secondary Payer (MSP) claims involving automobile and liability insurance (including self-insurance), no-fault insurance, and workers’ compensation when future medical care is claimed or the settlement, judgment, award, or other payment releases (or has the effect of releasing) claims for future medical care.” The document provided seven options for satisfying Medicare’s interest when settling future medical benefits as a result of an injury or accident.

According to the Federal Register, 107 comments were received. Considering the importance and far-reaching ramifications of a potential rule to codify and require the parties to consider Medicare in all insurance cases, the number of comments was startlingly low. In fact, the lack of CMS activity with regard to the rule making may signal that the issue was not pressing enough for immediate action. In fact, no response to the comments were addressed or made by CMS until the publication of the RIN. In several public appearances since June of last year, CMS officials refused to discuss the issue, advising that they were “under rulemaking.” While their position is technically incorrect as the rule was simply a proposed notice, CMS nonetheless gave many the impression that activity around the issue was not a priority.

With the release of the RIN, CMS seems to signal that they are prepared to publish a Notice of Proposed Rulemaking which would include liability insurance cases. The deadline for action, however, is listed as “9/00/2013.” Accordingly, we may be able to expect something substantive in the very near future. Presumably, CMS has digested the comments provided by those that bothered to respond. By and large, those comments either questioned the statutory authority of CMS to implement such a rule, or lamented the broken, sometimes incomprehensible workers’ compensation MSA review and approval process.

While the RIN suggests a timeline for action by CMS, it must be remembered that the suggested timeline will not be enforced by any entity other than CMS itself or the Department of Health and Human Services. Considering the slow response that CMS and HHS have exhibited in formulating and releasing Congressionally-mandated regulations to implement the newly enacted Strengthening Medicare and Repaying Taxpayers (SMART) Act, it would not be unusual to see the September deadline come and go without a proposed rule.

Certainly, CMS action on these issues and implementation of a rule requiring injured plaintiffs/claimants to formally consider Medicare’s future interests in any injury or accident case, could fundamentally alter the way claims will be evaluated, litigated and resolved particularly with respect to liability insurance claims. Gould & Lamb will continue to monitor the situation and will provide updates or comment as the situation is further defined. If you would like to discuss these issues, contact your G&L representative or call our corporate office and an executive team member will be glad to assist you.

Medicare Compliance

What Do Medicare Compliance and Love Have In Common?

Tom Blackwell, VP Sales & MarketingLove is fickle. Love hits you when you aren’t looking. Love is kind of scary. Love is never the same for everyone. And, like Medicare Compliance, you never know how long it will last.

During this special week of love, we see the similarities between Medicare Compliance and the most celebrated of emotions. So, it’s with a cheek full of tongue and a light heart that I give you seven pieces of advice on handling Medicare compliance and love.

First, don’t panic – just like love, you will find yourself thinking about your Mandatory Insurer Reporting solution (maybe talking to it?) at odd moments. My advice is to not think about it while you talk with your spouse, they’ll know you’re up to something.

Second, it’s alright to get angry about it sometimes. We are at our most vulnerable when we open ourselves to others and share our past. Reporting to Medicare is cleansing and you will grow as a person after sharing.

Third, go with the flow. The processes of love and Medicare Compliance are not always what you thought they would be.

Medicare Compliance LoveFourth, when you fall in love or start complying, you are going to meet the in-laws, the siblings and the vendors. Be sure you have the telephone number of a good friend to talk to (like Gould & Lamb, 866-672-3453)

Fifth, if you’re looking for love or a Mandatory Insurer Reporting solution, don’t rely on the Internet. Meeting a reporting partner or a life partner is best accomplished the old fashioned way, with a personal introduction and a meeting (hint –hint).

Sixth, when you have found that person or process that completes you, don’t mess it up. Love is about communication and trust; Medicare compliance is the same thing. Both parties have to talk and do the right thing for it to work.

Seventh, don’t force it – if you are ready to commit; then commit. If you have any compatibility problems with your current Medicare Compliance Partner, talk with them and then consider the Gould & Lamb solution.

CMS Reporting Penalty Will Be $1000 per Claim per Day

$1000 per Claim per Day Effective January 1, 2011

I normally do not like “scare-tactics” as a way to get our client’s attention.  However, I am making an exception to that philosophy in deference to the CMS upcoming deadline for Mandatory Insurer Reporting that will take effect on January 1, 2011.

John Miano is Gould and Lamb’s Manager of Reporting Services.  He is so passionate about his job and making sure our clients do not get caught in the CMS reporting penalty for non-compliance that I have to share a recent alarming article he wrote:

Written by John Miano, Manager of Reporting Services, Gould and Lamb

You’ve been here before; ready to commit but there’s concern. Your new partner is complex, demanding and you’ve been left waiting. You have made several attempts at getting his/her attention but the timing has never been right. Your partner just keeps ignoring you. Your peers tell you the relationship will never work…just forget about it.

Does this sound like a new episode of Jersey Shore?  Maybe, but it most likely describes the relationship of our industry with CMS reporting requirements for MMSEA Section 111 and the deadline for MIR compliance changes going into effect on January 1, 2011.

Gould and Lamb and our clients have been ready to commit to providing data for MIR in the past, only to have CMS push the mandate back, alter the rules and change specifications.

Even with these CMS delays, the Quarter 1 mandate is real. A sufficient number of Responsible Reporting Entities – RRE’s have provided data to CMS voluntarily to indicate that the industry is prepared.

Less than 30 days to have production data to Gould and Lamb for October 18th Query Input Deadline

What this means for Gould and Lamb’s MIR customers, RRE’s and Claims Administrators NOT currently in production is that it’s time to wrap up testing and move to production NOW!.

Medicare Eligibility of the injured party is the first of many criteria for MIR for CMS reporting. Therefore, Query Input files must be submitted to and Query Responses received from CMS timely to ensure sufficient preparation of MIR claim record data.

The query input file requires a small number of basic data such as the RRE ID, the injured party’s first name, last name, gender, date of birth and social security number. The injured party information should be as it appears on his or hers Social Security of Medicare Card to ensure the best chance of receiving an accurate response from CMS.

In short, a Reporting Group 1 RRE must have production data to Gould & Lamb by October 18, 2010 to ensure sufficient time for the Query Response and preparation of data for January 1, 2011 MIR reporting date. The non-compliance CMS reporting penalty is high – $1,000 per claim per day.

Time is short, do NOT get caught in CMS’s $1,000 per claim per day reporting penalty. Contact your Client Liaison Specialist at Gould and Lamb today at or 866.672.3453 Ext. 1122.

Click Here to Download the MSP Compliance Protocols User Guide from Gould and Lamb
Download Gould and Lamb’s Medicare Secondary Payer Compliance and Protocols User Guide

Download the MSP Compliance Protocols user guide today!

Board Studies Contingency Fee Rule

Florida Bar Recognizes Specialists May Be Required for Contingency Fee Rule As It Relates to Medical Liens

The Florida Bar is currently studying the attorney contingency fee rule to address the hiring of special attorneys to resolve subrogation and medical lien issues related to personal injury cases. The issue has been presented to the Board of Governors and passage will effect MSP compliance in Florida.

A special committee reported to the board at its May 28, 2010 meeting on the suggested amendments to Rule 4-1.5 and the proposal will come back to the board for a vote at its July 23 meeting.

The issue before the committee addresses the question whether referring medical liens to a second attorney, who would be paid on a reverse contingency fee, would violate the contingency fee cap in the rule itself. The Board Review Committee on Professional Ethics opined that if the total fees paid to both attorneys exceeded the limits in the rule, a problem is evident.

However, they recognized that medical lien resolution has become an increasingly intricate area in tort cases. Bringing in an expert could save the client money, even if the contingency fee limits are exceeded. Clearly, the ramifications of the new rule may have far reaching effects on Medicare Secondary Payer issues including lien research, negotiation and resolution.  Jay Cohen, appointed by the Board Review Committee on Professional Ethics to examine the issue, told the board the panel was recommending adding a new subsection to the rule, as 4-1.5(f)(4)(E).

The New Proposed Subsection (E) Reads:

“The lawyers shall include in the contract an explanation of the scope of any subrogation or lien resolution services the lawyer will undertake at the conclusion of the primary matter. The lawyer shall not charge additional fees for handling lien resolution services if those additional fees, when combined with the lawyer’s fees for handling the primary claim, would exceed the contingent fee schedule set forth in this subdivision.

If extraordinary subrogation or lien resolution services are handled by others outside the primary lawyer’s firm who will charge additional attorney’s fees or costs to the client, these services shall only be provided after obtaining the client’s informed written consent to the additional fees or costs. Any additional fees or costs charged by the other lawyers involved in the subrogation or lien resolution services must separately comply with the provision of Rules 4-1.5(a) through 4-1.5(e), and if the fees are contingent on the outcome of the lien resolution, the lien or subrogation resolution fees on their own must also comply with Rule 4-1.5(f).”

Gary Blankenship, Senior Editor of The Florida Bar News reported that the proposed comment for the new rule clarifies several related issues, including:

Lawyers taking the personal injury or wrongful death case must set out in the contract whether subrogation and lien resolution issues will be handled as part of the contingency contract.

As part of any contingency contract, the attorney has the obligation “to make reasonable efforts to ascertain the existence of any medical liens and subrogation claims, advise the client of their existence, make reasonable efforts to negotiate liens that are negotiable, and disburse the amounts to lien-holders and subrogation claimants” as agreed by the client and third parties.

The original attorney must determine if the additional services needed constitute the practice of law, and if they do, must not refer the matter “to a non-lawyer or someone not authorized to provide the services.

Determine services.

Lawyers may also provide other ancillary services, such as estate planning, bankruptcy, financial planning, public benefit planning, and similar work which are not part of the contingency contract. According to the proposed comment, “The personal injury lawyers should clearly indicate in the lawyer’s contract that the lawyer does not intend to undertake such ancillary services, if the lawyer does not intend to do so.”

For purposes of MSP Compliance, the new rule seems to require attorneys to set out, in writing, whether they will handle Medicare Lien issues as part of their contract with the client and, more importantly, requires attorneys to investigate the existence of liens including Medicare’s conditional payments.

Florida, then, is moving solidly in the direction of placing the onus on the attorney for the plaintiff in tort cases to protect Medicare’s interests directly, unless the client is advised regarding a referral to another attorney or provider.  With adoption of the rule, plaintiff’s attorneys would truly seem to be unable to stick their heads in the sand regarding MSP compliance in tort cases.

Unwillingness or uncertainty with respect to Medicare’s lien interests will now be codified in the attorney’s fee statute itself, requiring the plaintiff to acknowledge lien rights and to make some arrangements to address and resolve them. Truly, the Florida Bar’s express concerns regarding lien practice places MSP Compliance squarely at issue. The July 23 vote will indicate whether the bar is willing to take the lead on what is sure to be a critical issue in Florida tort law.

Click Here to Download the MSP Compliance Protocols User Guide from Gould and Lamb
Download Gould and Lamb’s Medicare Secondary Payer Compliance and Protocols User Guide

Download the MSP Compliance Protocols user guide today!

Collateral Source Rule Does Not Relieve Plaintiffs of MSP Recoupment Obligation

On May 24, 2010 the Superior Court of New Jersey, Appellate Division, decided the case of Ilse Theresa Jackson v. Hudson Court, LLC.  At issue was a request by the plaintiff for a court ordered allocation of settlement funds in order to avoid payment of a Medicare lien.

After settlement of the underlying case, the plaintiff sought to obtain a court order designating that the settlement proceeds were for pain and suffering or for other amounts not related to medical services, notwithstanding the fact that conditional payments had been made by Medicare. Ms. Jackson’s contention was based upon state collateral source doctrine which forecloses recovery of expenses received (or to which she was entitled) in duplication of her recovery.

In short, she argued that no plaintiff should have to reimburse Medicare in a personal injury claim because Medicare’s lien would be satisfied from funds not recovered for medical expenses. Basically, she sought the court’s cooperation in categorizing her settlement proceeds to avoid Medicare lien repayment.

Collateral Source Statute

The court, interestingly, reviewed a prior ruling in which it was found that collateral source statute does not apply to reimbursable benefits paid by Medicaid by likening the reimbursement principles to Medicare liens. Stating that Medicare “has a nearly unqualified right to reimbursement” the court found that the collateral source rule allows a personal injury settlements to include recovery of medical expenses paid for by Medicare.

The court also took the opportunity to point to prior federal case law which established where state collateral source rules “frustrate” MSP reimbursement rights, they are pre empted.

For purposes of MSP compliance, it would appear that, at least in New Jersey, Medicare liens cannot be avoided by hiding behind the collateral source rule or by a creative allocation of settlement funds. The court there recognized not only the pre eminence of the MSP statute as compared to state law but also advised the tort industry that they would not be complicit in rulings that avoid Medicare’s recovery interests.

Accordingly, Gould and Lamb recommends conditional payment research early in the tort process in order to identify Medicare’s recoupment potential and the best strategy for maximizing third party recovery, limiting contingent liability and ensuring MSP compliance.

Click Here to Download the MSP Compliance Protocols User Guide from Gould and Lamb
Download Gould and Lamb’s Medicare Secondary Payer Compliance and Protocols User Guide

Download the MSP Compliance Protocols user guide today!