Presentation on theme: "M EDICARE L IEN C ONSIDERATIONS F OR P LAINTIFFS ’ A TTORNEYS K EN W. H ARRELL, E SQ. J OYE L AW F IRM, LLP O CTOBER 4, 2013."— Presentation transcript:
M EDICARE L IEN C ONSIDERATIONS F OR P LAINTIFFS ’ A TTORNEYS K EN W. H ARRELL, E SQ. J OYE L AW F IRM, LLP O CTOBER 4, 2013
D O I N EED A MSA? (F OUR - STEP P ROCESS ) 1.Is the claimant a MSA candidate? 2.Does the settlement end future medical rights and is any portion of the settlement allocated to future medical costs? 3.Determine the claimant’s future medical care costs. 4.Educate your client about future MSA obligations.
W HAT IS A MSA? MSA = Medicare set- aside account A fund to pay for future injury-related medical care that would otherwise be paid by Medicare.
M EDICARE ’ S T WO I NTERESTS 1.Resolving its lien for conditional payments made before the settlement. 2.Evaluating obligations for future medical costs after the date of settlement.
S TEP 1 – S CREENING 1.Is the claimant a current Medicare beneficiary or is there a “reasonable expectation” of the same within 30 months of the settlement? 2.Does the WC settlement end the WC carrier’s medical coverage responsibilities? 3.Does the claimant require future injury-related treatment that would otherwise by covered by Medicare? For workers’ comp cases, it’s fairly clear: If all three questions are answered “yes,” the claimant is a MSA candidate.
S TEP 2 – A SSESSING T HE S ETTLEMENT T ERMS For workers’ compensation cases, if the claimant’s medical rights have been ended and a portion of the settlement amount is allocated to future medical costs, the claimant must pay this amount down before Medicare is responsible for taking over payment for medical costs.
S TEP 3 – V ALUING THE P ROPER MSA A MOUNT A future cost of care analysis identifies all of the claimant’s future injury-related treatment costs and determines the amount which would be paid by Medicare. In most cases, the initial assessment is prepared by a company hired by the insurance carrier.
S TEP 4 – E DUCATING T HE C LIENT After determining the proper MSA amount, the methods of funding and administering the account need to be explained to the client. Funding (two options) – Lump sum – Annuity/structured settlement Administration (two options) – Self-administered – Professional administration
W HAT ABOUT THE WCMSA THRESHOLDS ? The WCMSA thresholds: – $25,000 for a Medicare beneficiary – $250,000 for someone with a “reasonable expectation” of becoming a beneficiary within 30 months CMS workload thresholds only. They have no effect on whether a MSA should be done.
L IABILITY CASES – WHY IS A MSA APPROACH PROBLEMATIC ? Workers’ compensation 1)No-fault system 2)Statutorily defined components of damages 3)No cap on medical costs exposure 4)Claimant may be awarded future medical coverage 5)Settlement amounts often allocated specifically Liability 1)Comparative fault issues impact the settlement amount 2)Intangible damages (pain and suffering, loss of enjoyment of life, etc.) 3)Insurance policy limits and, in some cases, statutory caps on damages 4)No future medical coverage available 5)Settlement proceeds typically not allocated with specificity
W HAT ABOUT FUTURE MEDICAL COSTS WHEN A LIABILITY CASE IS SETTLED ? The MSP Act contains no guidance on how to protect Medicare’s future interest. CMS regulations provide guidance on how to deal with future medical costs in the workers’ comp setting but no such guidance for liability cases. Absent agency guidance, some parties have sought judicial decisions.
S O WHAT ’ S REQUIRED ? “Reasonable good faith effort at compliance” Approach based on a series of federal decisions addressing the amount of deference owed to a federal administrative agency’s statutory interpretation when the agency has failed to promulgate regulations. Once a “reasonable” determination of the parties’ obligations has been made and documented, CMS will have difficulty punishing the parties.
W HEN SHOULD A LIABILITY MSA BE ESTABLISHED ? The obligation to fund a liability MSA is only clear on its face when a definitive allocation for future medical costs exists in the settlement agreement (or verdict) for an injured Medicare beneficiary. To meet the “good faith” standard, parties: – Determine whether a MSA is appropriate – Document the file accordingly.
S(creen)A(ssess)V(alue)E(ducate) – LMSA’s Screen – if the injured party is not a MSA candidate, that is the end of the issue. Your intake forms should include: a)Are you a Medicare beneficiary? b)Have you applied for Social Security Disability? c)Are you 62.5 years old or older? d)Do you suffer from end stage renal disease or blindness?
S(creen)A(ssess)V(alue)E(ducate) – LMSA’s Assess – if the injured person is a MSA candidate, assess whether the gross settlement proceeds contain sufficient dollars to fund any MSA obligation on future medical costs. If the claimant will clearly not have future medical needs related to the accident, it would be advisable to have the treating doctor state the same in writing to a reasonable degree of medical certainty.
S( CREEN )A( SSESS )V( ALUE )E( DUCATE ) Value – If you determine that a MSA is needed, the next step is to determine the appropriate LMSA amount by having a future cost of care analysis done. Educate – an injured person with LMSA needs has the same funding and administrative decisions to make that a workers’ compensation claimant faces.
H OW T O D OCUMENT Y OUR F ILE For larger cases, consider outside consultants and tools such as the Garretson firm’s “MSA Decision Engine.” garretsongroup.com Click on client login/claimant inquiry. If using for the first time, they will contact you for a tutorial.
W HAT ABOUT THE MMSEA? The Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) has nothing to do with MSA issues. MMSEA is a reporting statute which requires all insurance carriers to determine if a claimant/plaintiff is Medicare-eligible, and to report any settlement or other payment made to Medicare beneficiary. Allows for fines of up to $1,000 per day for failure to comply with the reporting requirements.
T HREE P RIMARY G OALS W HEN D EALING W ITH M EDICARE O N I NJURY C ASES 1)Resolving any conditional payment liens. 2)Complying with MMSEA reporting requirements (carriers). 3)“Consider and protect” Medicare’s future interests by determining if a MSA is needed and, if so, the appropriate amount to fund the MSA.
W HAT DOES THE RECENTLY ENACTED “SMART” A CT DO ? Strengthening Medicare and Repaying Taxpayers (SMART) Act was intended to streamline the Medicare lien system when dealing with conditional payment liens. The six improvements were: 1) Creation of a Medicare web portal to help attorneys and claimants determine the final conditional payments lien amount prior to settlement. 2) Increased privacy for Medicare beneficiaries by eliminating the use of Social Security numbers for reporting purposes within 18 months.
SMART A CT ( CONTINUED ) 3)Establishes a three-year statute of limitations for Medicare actions to recover conditional payments. 4)Will establish a minimum threshold for collection of payment for liability cases by November 15, )Reduces the penalties imposed by MMSEA for failing to comply with reporting requirements. 6)Will eventually result in Medicare having to establish appellate procedures for conditional payments issues.
T HANK Y OU ! Ken Harrell, Managing Partner Joye Law Firm 5861 Rivers Avenue N. Charleston, SC (843)