1. Medicare Secondary Payer – Process and Best Practices October 21, 2009 Roy A. Franco, Safeway Inc./ Medicare Advocacy Recovery Coalition

2. 2010 20202030 2040 13% 27% 49% 61% Tax Revenue Consumed By Medicare & Social Security $89 Trillion

3. Medicare Act Medicare Secondary Payer MSP History 1965 2003 1965 Medicare Act 1980 Medicare Secondary Payer Act 2003 Medicare Modernization Act 2007 MMSEA § 111

4. MMSEA - §111 Medicare Secondary Payer Act 42 USC §1395y(b)(2) Medicare Set Aside § 411.25 Primary payer’s notice of primary payment responsibility. If it is demonstrated to a primary payer that CMS has made a Medicare primary payment for services for which the primary payer has made or should have made primary payment, it must provide notice about primary payment responsibility and information about the underlying MSP situation to the entity or entities designated by CMS to receive and process that information. [54 FR 41734, Oct. 11, 1989; as amended at 55 FR 1820, Jan. 19, 1990; 73 FR 9684, Feb. 22, 2008] § 411.24 (i) Recovery of conditional payments. Special rules. (1) In the case of liability insurance settlements and disputed claims under employer group health plans and no-fault insurance, the following rule applies: If Medicare is not reimbursed as required by paragraph (h) of this section, the third party payer must reimburse Medicare even though it has already reimbursed the beneficiary or other party.

5. Timelines ProcessTime Period Registration5/1/2009 – 9/30/2009 Test and Production Query7/1/2009 Claim Input File Testing1/1/2010 – 3/31/2010 Production2 nd quarter 2010 (April 1 – June 30)

6. Contingent Liabilities Electronic Reporting Penalties 42 CFR 411.24(i) Double Damages No Safe Harbor No Defenses Estoppel Shelf life No Appeal Finality

7. Interest accrues, if full refund not received in 60 days. Accident occurs. Injuries associated with accident are paid by Medicare. Negligent Party becomes aware of accident involving Medicare Beneficiary. COBC gathers additional facts about the accident. Reports accident to COBC per 42 CFR 411.25 (a). Populates Common Working File. COB acknowledges claim notification or sends notice to negligent party. Consent form attached. 10-14 days Acknowledges receipt of claim and investigates conditional payments related to accident. Reported information is submitted to the Recovery Management Accounting System to identify conditional payments. MSP leads identified and related case claims retrieved. MSPRC receives ReMAS Alert and applies filters to identify related claims. ReMAS MSPRC works with negligent party to reach agreement on accident related claims. Settlement occurs.Parties sends settlement Documents to MSPRC. 14 days $$$ MSPRC identifies $ owed to Medicare; sends demand letter. Post demand correspondence regarding relatedness. Send MSPRC the refund check. If full refund not received MSPRC sends Intent to Refer letter. If full refund not received after 120 days, case is referred to Treasury. MSPRC case complete. Waiver or Compromise. MSP CONDITIONAL PAYMENTS LIFECYCLE MSPRC sends Conditional payment letter. 45 days Resolved AgreesDispute Payment Dispute 30 days Updated Conditional Payment Letter is sent. 30 days Duplication without express written consent of MARC is prohibited

8. Waiver of the private cause of action under 42 U.S.C. 1395y(b)(3)(A); Identify injuries related to the tort with applicable ICD-9 codes; Settlement may impact plaintiff’s future benefits, and claimant has the right to seek waiver, compromise and otherwise reduce the amount sought by Medicare based upon costs to procure the settlement; Cooperation Clause / survivability of consent form; Affirmative obligation requiring plaintiff to provide copies of any settlement agreements or other communications plaintiff has with Medicare on case; Statement that the plan has exhausted all benefits, listing the TPOC date and amount. How disbursements are to be handled. Pay Attention to the Settlement Release

9. Conditional Payments – 42 USC §1395y(b)(2)(B) Allocation Challenges Medicare Payments for item or service PP has not made or cannot reasonably be expected to make 100% Zero reduction for PP fault Zinman v. Shalala Hadden v. U.S. Bars to Settlement Damages Medical SpecialsAll Other Damages SETTLEMENT Judicial Determination

10. Liability Medicare Set Asides No Regulations No Bulletins / Alerts No safe harbor – applying Worker’s Compensation guidelines Statutory basis –MSP provisions say Medicare is always secondary to WC and other insurance –No payment may be made under Medicare for covered items or services to the extent that payment has been made, or can reasonably be expected to be made. –Medicare’s authority to review liability settlements arises under same statute as its authority to review Worker’s Compensation settlements (See 42 USC §§1395y(b)(5)(d), 1395y(b)(6)

11. $20,000 $80,000Past Medical Expense Net to Plaintiff ? $100,000 Settlement Example

12. Legislature Regulatory Common Law – –Hadden v. U.S. To Join: –Visit http://www.marccoalition.comhttp://www.marccoalition.com –Contact Susan Murdock – susan@murdockinc.comsusan@murdockinc.com Financial contributions needed! Medicare Advocacy Recovery Coalition

13. Questions and Answers