1. Unraveling The MMSEA Sec. 111 Reporting Requirements

2. Terms CMS – The Centers for Medicare & Medicaid Services (CMS)
COBC – Coordinator of Benefits Contractor
MSPRC – Medicare Secondary Payer Recovery Contractor (
MMSEA/SCHIP – New mandatory reporting law
MSPA - Medicare Secondary Payer Act – Law passed in 1980
CP – Conditional payment (Medicare “lien”)
MSA – Medicare Set-aside

3. Medicare Compliance

4. MMSEA/SCHIP MSPA Medicare Compliance Mandatory Reporting
Query Function
MSPA
MSA
Conditional Payments

5. MMSEA/SCHIP Mandatory Reporting Query Function Medicare Compliance
SOLUTION: TECHNOLOGY
CLAIMS HANDLER

6. MSPA Medicare Compliance MSA Conditional Payments SOLUTION:
CLAIMS HANDLER
CLIENTS
DEFENSE COUNSEL
PLAINTIFF COUNSEL

7. Subject to Change Background When does reporting start?
Electronic Registration for all RRE’s
Started May 2009
Testing of Electronic Transmissions
January 2010 – Dec 2010
First Live Data Submission to CMS
January 1, 2011
Reporting of Cases that Settle
October 1, 2010
Updated 2/26/10 7

8. CMS changed the definition of RRE Drastic change
RRE Definition Change
CMS changed the definition of RRE
Drastic change
Affects which entity has to report
Many cases switches burden
From Insured to Carrier
Carriers will have burden of reporting many, many more cases
The purpose of this slide is to identify the significance of the change in RRE definition
Discuss the potential for carriers to require more involvement as respects claim handling best practices as the RRE definition changes.
Sedgwick CMS is still assessing process changes we need to implement to support the new change. Communications with directions for process change will be distributed shortly

9. We are not reporting every case. We are only reporting:
What are we reporting?
We are not reporting every case.
We are only reporting:
Medicare Beneficiary only; and
Settlement value of $5,000* or more.
*decreases over time

10. MMSEA – Impact Data collection Especially for liability (SS# and ICD)
Concern about timely reporting
$1,000 day per case civil penalty
More emphasis placed on pre-settlement Medicare lien resolution
Introduction of MSAs to liability cases

11. Conditional Payment Analysis Report Case Settle Case
“Connecting the Dots”
Invoice issued - CP
Defendant, Plaintiff, Plaintiff’s Attorney
Conditional Payment Analysis
MSPA
MSPRC
Report Case
MMSEA
COBC
Settle Case
State Law

12. Settlement Provisions
Parties cannot transfer their responsibilities under the MSPA to other parties.
Settlement and Release

13. “Connecting the Dots” – Example 1
Total Cost: $130,000
Invoice issued - CP
$30,000
Defendant
Conditional Payment Analysis
MSPRC
Report Case
COBC
Settle Case
$100,000

14. Conditional Payment Timeline
Estimated CP Amount
Final Demand
Date of Settlement
Date of Loss

15. Conditional Payment - Solutions
“Check” option
Best result for defendant – no worries about future issues
Case can be closed once payment is issued
Has to be spelled out in settlement documents
Difficult to convince opposing counsel to do this
“Escrow” option
More problematic – examiner has to deal with MSPRC
Files open longer post settlement
Risk that final demand is substantially greater than estimated conditional payment amount
Risk should be allocated in settlement documents

16. Medicare Liens and MSAs
Medicare liens - conditional payments that Medicare made before settlement
MSAs – a trust setup through the settlement documents to prevent the transfer of expenses to Medicare after settlement 16

17. Medicare Secondary Payer Act
Date of Settlement
Date of Injury
Conditional Payment
MSA

18. Medicare Set-asides MSA
CMS is currently only reviewing and approving for WC
May still be needed for liability - MSPA
Can still have MSA language in a settlement even though CMS may not approve it
Harder to calculate for liability
MSA

19. Medicare Set-asides
For liability cases:
CMS: No formal approval process
Settlement includes future medical
Settlement value a good indicator
They provide an extra layer of defense

20. Medicare Compliance - Tips
Determine if a claimant is on Medicare or Social Security Disability (SSDIB) as early as possible
Once a claimant is determined to be Medicare or SSDIB advise opposing counsel
“Put down your swords when it comes to Medicare issues”
Discuss with opposing counsel the possibility of dealing with conditional payments or Medicare set-aside in any future settlement

21. Medicare Compliance - Tips
Check your settlement documents
Include MSA language
Include CP language
Check your claims handling procedures
Evaluate CP implications
Evaluate MSA possibilities

22. Medicare Compliance - Tips
At settlement time have two things ready:
Estimated Conditional Payment Amount
MSA amount, if necessary
Incorporate those into your settlement

23. Medicare Compliance - Tips
If going to trial:
Be prepared to educate judge concerning Medicare issues
May need to do a special jury verdict form that contains:
Damages for future medical treatment
Damages for past medical treatment

24. Medicare Compliance – Important Points
Need to understand the distinction between a conditional payment and a Medicare set-aside
Each component requires separate analysis:
Reporting
Medicare set-aside
Conditional payment
Each case may need none, one, or more of each component to be compliant

25. Impact on Litigation Education Trial Strategies
Risk
Managers
Examiners
Defense
Attorneys
Claimant
Attorneys
Judges
Education
Trial Strategies
Early intervention with Medicare beneficiaries
Cost to settle
Time to settle

26. Questions?

27. Need Further Information?
Michael R. Merlino II, Esq.
Gwinnett Commerce Center
3700 Crestwood Parkway, Suite 600
Duluth, GA 30096
Business: (678)
Mobile: (770)