1. Cigna Corp. v. Amara in the Supreme Court: Although the district court did not have authority under Section 502(a)(1)(B) of ERISA to reform CIGNA’s pension plan, it did have authority to do so under another provision, Section 502(a)(3).  The SOCTUS Blog’s “Plain English Holding”: Courts may order changes to the terms of a pension plan to remedy false or otherwise unlawful disclosures by the plan to the plan participants.  The progeny ofAmara will begin to take this holding a step further.
2. Zurich American Ins. Co. v. O’Hara, 11th Circuit:  WhileAmara seemed to open the use of equitable defenses in ERISA liens, Zurich ignored this opening and relied strictly on the plain language of the ERISA plan.
3. U.S. Airways v. McCutchen, 3rd Circuit:   Citing Amara, the Court noted that an ERISA Plan’s ability to recover was limited by statute to “appropriate equitable relief.” The court then reasoned that appropriate equitable relief requires application of defenses available in equity actions.  These defenses include the common fund doctrine and perhaps the made whole doctrine.
4. The 9th Circuit heard arguments on the same situation in Seattle on February 9, 2012.  We await its decision (that court has been historically liberal in its pro-plaintiff view of ERISA).

If the 9th Circuit follows the 3rd Circuit a large portion of Americans will be covered by pro-beneficiary (pro-plaintiff) ERISA lien laws – there should be little doubt the Supreme Court will get its chance to way in sooner or later.

We will post more detailed analysis on each of these cases in the upcoming weeks.

This Blog/Web Site is made available by the publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

The Benefits of Medicare’s Self-Calculated Payment Amount

• The most obvious benefit of Medicare’s new Self-Calculated Payment Amount is that you can finally know the lien when you settle.  No more blindly settling when you only have a Conditional Payment Summary.
• While there isn’t much else – there is the benefit of knowing the MSPRC is at least trying this process.  Perhaps they will expand it for the future.

The Disadvantages of Medicare’s Self-Calculated Payment Amount

• The Self-Calculated Payment Amount creates a significant burden for the beneficiary – take a look at the process from yesterday’s post:

First you need a Conditional Payment Letter (“CPL”) from the MSPRC.  That process takes about 90 days starting with the reporting to the COBC.  Then, you need to mark that CPL with Ys and Ns referring to what does apply (Y / Yes) and what does not apply (N / No).  Amazingly, the MSPRC then wants you to look at mymedicare.gov and add any claims that are related to the case.  Continuing on, the MSPRC requires model language for the option.  Finally, you will attach the attestation (physician or beneficiary certification).

• The process is only applicable where many criteria are met:
  • The settlement is for a Liability file only (no PIP, Med-Pay, Workers’ Compensation, or other No-Fault insurance);
  • The total settlement value is less than $25,000.00;
  • The settlement is for a Trauma-based injury (no ingestion, exposure, or medical implants and therefore no products liability or mass tort type cases);
  • The date of incident is more than 6 months ago;
  • The beneficiary demonstrates that treatment is complete and no further treatment is expected through:
    • A written physician attestation; or,
    • A written certification from the beneficiary that:
      • No medical treatment related to the case has occurred for at least 90 days; and,
      • No further care is expected.
• The time frame for lien resolution does not improve.  Think about it: You still have to wait for the Conditional Payment Summary (which requires waiting for a Rights and Responsibilities letter first); Then you have to go through the self-calculation process; and finally, You wait for the MSPRC response.  Only after that process can you request a Final Demand for the Medicare lien.
• Through all of this you end of waiving one of the most important rights to Medicare lien resolution – the appeals process.  You’re giving up four levels of Medicare lien appeals.

This post is mostly negative.  But the Medicare Self-Calculated Payment process is applicable in very narrow situations.  Nonetheless this is a step in the right direction – perhaps the MSPRC expands applicability of the process.

This Blog/Web Site is made available by the publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

New Option to Self-Calculate Your Conditional Payment Amount

On February 21, 2012, the Centers for Medicare & Medicaid Services (CMS) will implement an option that allows certain Medicare beneficiaries to self-calculate Medicare’s final conditional payment amount prior to settlement. A full explanation, including instructions on how and when to elect this option can be found by clicking here.

The information provided includes eligibility criteria for this process, instructions on how to self-calculate the final conditional payment amount, CMS’ review process, tips, and an illustrative example for completing this new process.

CMS will continue to improve and refine this process. Therefore, we welcome your input and comments at a future teleconference.

When Does Self-Calculation Apply?

• The settlement is for a Liability file only (no PIP, Med-Pay, Workers’ Compensation, or other No-Fault insurance);
• The total settlement value is less than $25,000.00;
• The settlement is for a Trauma-based injury (no ingestion, exposure, or medical implants and therefore no products liability or mass tort type cases);
• The date of incident is more than 6 months ago;
• The beneficiary demonstrates that treatment is complete and no further treatment is expected through:
  • A written physician attestation; or,
  • A written certification from the beneficiary that:
    • No medical treatment related to the case has occurred for at least 90 days; and,
    • No further care is expected.

Is Anything Else Required?

Yes.  The beneficiary must waive his right to appeal the lien.  The right to a waiver remains.

But This is a Self-Calculated Conditional Payment - How Does it Become a Pre-Settlement Final Demand?

First you need a Conditional Payment Letter (“CPL”) from the MSPRC.  That process takes about 90 days starting with the reporting to the COBC.  Then, you need to mark that CPL with Ys and Ns referring to what does apply (Y / Yes) and what does not apply (N / No).  Amazingly, the MSPRC then wants you to look at mymedicare.gov and add any claims that are related to the case.  Continuing on, the MSPRC requires model language for the option.  Finally, you will attach the attestation (physician or beneficiary certification).

At this point you’re halfway to a Final Demand.  Sixty days later the MSPRC will provide a new “Final Conditional Payment Amount.”  This letter will either agree or disagree with your calculation; however, it will be considered the final conditional amount for 60 days.

Assuming you settle within the 60 days you have one more step: Prepare a final settlement detail as you would for a normal Medicare lien case, but include the first and last page of the settlement agreement, and, include the MSPRC letter agreeing or disagreeing with the self-calculation.  The Final Demand will be issued within 20 days.

This whole process appears to be 170 days.  Even the MSPRC suggests it will take five months.

Is it Worth My Time?

Probably not.  It applies to very few cases and seems to be more work than the average lien.  Our next post will analyze the pros and cons of Medicare’s Self-Calculated Final Conditional Payment Amount.

This Blog/Web Site is made available by the publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

New Fixed Percentage Option For Medicare’s Recovery Claim

The Centers for Medicare & Medicaid Services will be implementing a new and simple fixed percentage option that will be available to certain beneficiaries beginning November 7, 2011. This option is available to beneficiaries who receive certain types of liability insurance (including self-insurance) settlements of $5000 or less.

A beneficiary who elects this option will be able to resolve Medicare’s recovery claim by paying Medicare 25% of his/her total liability insurance settlement instead of using the traditional recovery process. This means that a beneficiary will know what he/she owes and will be able to immediately pay Medicare.

In order to elect this option, the following criteria must be met:

1. The liability insurance (including self-insurance) settlement is for a physical trauma based injury. (This means that it does not relate to ingestion, exposure, or medical implant), and
2. The total liability settlement, judgment, award, or other payment is $5000 or less, and
3. The beneficiary elects the option within the required timeframe and Medicare has not issued a demand letter or other request for reimbursement related to the incident, and
4. The beneficiary has not received and does not expect to receive any other settlements, judgments, awards, or other payments related to the incident.

A full explanation, including instructions on how and when to elect this option, will be available on this website on November 7, 2011 in the Fixed Percentage Option section of both the Attorney and Beneficiary Toolkits.

Please Note:When a beneficiary elects this option, he/she must understand that as part of choosing the option he/she will be giving up the right to appeal the fixed payment amount or request a waiver of recovery for the fixed payment amount.

As has been the case for quite some time, all cases may be reported, but only settlements over $100,000.00 must be reported.  Defense-insurers will report whatever they choose to report.  The key for Plaintiff firms and Defense firms is to work together.  The best way for us to fairly determine Medicare lien amounts (and what should be paid back to Medicare) is to show Medicare for what you truly settled.  This means Defense-insurers should not say the sued-for injuries are every body part.

Why is that good for plaintiffs?  Lower liens.

Why is that good for defendants?  Lower liens means possibly lower settlements and it means reporting is easier.

Why is that good for Medicare and Medicare liens  Less work for the MSPRC and potentially faster payment.

Full reporting rules for Medicare liens:

• Total Settlement over $100,000: Settlement after October 1, 2011 must be reported on January 1, 2012;
• Total Settlement over $50,000: Settlement after April 1, 2012 must be reported on July 1, 2012;
• Total Settlement over $25,000: Settlement after July 1, 2012 must be reported on October 1, 2012; and,
• All Settlements over minimum threshold: Settlement after October 1, 2012 must be reported on January 1, 2013.

LRS will keep you apprised of all changes, including contact information for obtaining lien information, by Twitter (@LienResolve) and on LienBlog.  Be sure to follow us on both!  If you need assistance with Medicare liens, Medicaid liens, ERISA liens, or any other healthcare liens, contact LRS.  LRS can help resolve all healthcare liens.  Please contact us for more information.

This Blog/Web Site is made available by the publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

A new Medicare Secondary Payer Integration Contract (“MSPIC”) has been created to replace the COBC and MSPRC.  FedBizOpps.gov has begun requesting bids on the MSPIC contract which industry leaders expect to be awarded in late Spring or early Summer 2012.  You can review the bid requests via a contract Solicitation Number on FedBizOpps.gov (SS-CMS-2011-120036).  A synopsis of the contractor functions is:

This is a Sources Sought Notice to determine the availability of potential small businesses (e.g. 8(a), service-disabled veteran owned small business, HUBZone small business, small disadvantaged business, small disadvantaged veteran-owned small business, and women-owned small business) in accordance with FAR 7.104(d). The potential small business will need to demonstrate the ability to provide services related to the integration of MSP (Medicare Secondary Payer) IT systems MSP business program functions.

MSPRC representatives has previously told LRS that 400 case workers exist under the current contract.  Any business applying to be the new MSPIC would require hundreds more than the current MSPRC.  The combination of the MSPRC and COBC is designed to provide a single entity to improve customer relations and efficiency (via one point of contact), and more important to the government: improve debt collection.

CMS, COBC, and MSPRC representatives have yet to confirm any phone, fax, or address changes for the October 1, 2011 switch from the current MSPRC (Chickasaw Nation Industries) to the interim MSPRC (the current COBC: Group Health Incorporated).  Changes are possible on October 1, 2011.  Changes are highly likely once the new MSPIC contract is awarded in late Spring/early Summer 2012.

LRS will keep you apprised of all changes, including contact information for obtaining lien information, by Twitter (@LienResolve) and on LienBlog.  Be sure to follow us on both!  If you need assistance with Medicare liens, Medicaid liens, ERISA liens, or any other healthcare liens, contact LRS.  LRS can help resolve all healthcare liens.  Please contact us for more information.

This Blog/Web Site is made available by the publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

The AAJ has also reported on these upcoming changes, including a member-wide email from AAJ President Linda Lipsen sent September 20, 2011:

Dear Colleagues,

AAJ Public Affairs is working steadily on solutions to create certainty, finality and proportionality in the reimbursement process when your clients are Medicare beneficiaries.

This is a long road that started more than two years ago. Last year, the Centers for Medicare & Medicaid Services (CMS) announced a one-year delay in Medicare Secondary Payer (MSP) liability reporting requirements so that they could work on improving the process. More recently, AAJ anticipates that CMS will announce a series of policy changes that will be implemented over the coming months. These policy changes should have a positive impact on the amount of time it takes to resolve an MSP reimbursement claim as well as provide some certainty in the process.

In addition, CMS will likely issue guidance this week regarding Medicare beneficiaries with exposure or ingestion claims, in particular, claims that occurred prior to 1980 [LRS ed. - the effective year of MSP]. We are hopeful that this guidance will, in part, address some of the issues that many of you have had settling exposure claims involving a Medicare beneficiary. As soon as this guidance is finalized and we have a better understanding of its contents, we will let you know. As always, if there are any concerns we will address them with policy makers accordingly.

Progress is being made, and we will continue to advocate for program changes until the system is running smoothly.

Many of you know that in addition to our work with CMS, AAJ is also advocating for a bipartisan bill, H.R. 1063, the Strengthening Medicare and Repaying Taxpayer Act (SMART Act) that pushes a number of changes, including requiring CMS to provide the amount of conditional payment prior to settlement.

MSP issues are important to you and your clients and we are actively tracking this fluid situation; it has been changing week-to-week for several months. We will keep you updated as soon as we hear more.

Best Regards,

Linda Lipsen
Chief Executive Officer
American Association for Justice

In addition to the AAJ news, it has become apparent that Group Health Incorporated will act as the interim MSPRC contractor handling Medicare liens while the bidding process continues.  Industry representatives may recognize Group Health Incorporated as the entity acting as Medicare’s Coordination of Benefits Contractor (COBC) since 1999.  Perhaps this short term change can assist in the COBC to MSPRC transfer process (MSPRC represenatives often tell our specialists, “the COBC must not have transferred that to us”).  Keep in mind CMS representatives have indicated this is not a permanent change.  Group Health Inc. is not taking over the MSPRC contract, it has not won an MSPRC contract.  We don’t even know if it is involved in the MSPRC bidding process.

We do know that CMS representatives believe the MSPRC bidding process will be completed and a new MSPRC contract will be awarded sometime in the Spring of 2012.  Finally, we must repeat that much of this information is the product of internet rumor – we cannot guarantee the MSPRC process will occur exactly as described in this post.

Does this mean good things for Medicare liens?  Perhaps the process will be smoother, simpler, and most important: faster.  Perhaps.

If you need assistance with Medicare liens, Medicaid liens, ERISA liens, or any other healthcare liens, contact LRS.  LRS can help resolve all healthcare liens.  Please contact us for more information.

This Blog/Web Site is made available by the publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

We were … wrong?

Maybe.  Or maybe we were too hopeful that the MSPRC would roll over.  Its new language is somewhat ambiguous.  But the language also may help to prevent unnecessary appeals used strictly to toll the interest period.  After all, simply using Haro language might create that automatic appeal situation in an effort to withhold funds from the MSPRC (although they would be payable once an appeal decision is rendered).  Nonetheless, here is the pertinent appeal/interest language:

If you choose to appeal this determination or request a full or partial waiver of recovery, you may wish to repay Medicare the full amount or the amount you believe you owe within sixty (60) days of the date of this letter to avoid the assessment of interest. Interest accrues on any unpaid balance, which may include any amount you are determined to owe once a decision is reached on your request for waiver of  recovery or appeal. If you receive a waiver of recovery or if you are successful in appealing our decision, Medicare will refund any excess amounts you have paid. Medicare will not initiate any recovery action while your request for waiver or appeal is pending.

Look at the language carefully.  It reads, “you may wish to repay Medicare the full amount … to avoid the assessment of interest.”  It continues to say that interest accrues on any amount you are determined to owe once a decision is reached.  This seems to mean interest is charged on anything the MSPRC determines you owe once you stop appealing that amount, but from the initial demand date.  Confusing right?

For example, if the Final Demand is for $10,000.00, but you believe $3,000.00 is unrelated and appeal that $3,000.00, you can appeal that demand.  Then when the MSPRC comes back and agrees that $3,000.00 should be removed, it will charge interest on the $7,000.00 from the date of the demand until present, even though you had appealed the other $3,000.00.

Does the new Final Demand comply with Haro v. Sebelius?

Good question.  Under the exact words of Judge Bury, I think the new Final Demand does comply with Haro.  But it is a poorly veiled attempt to circumvent the spirit of Judge Bury’s decision.  The MSPRC’s tricky wording (now we see what took 50+ days) essentially forces you to comply with the old system of pay now, get reimbursed (much) later.

You must continue to pay Final Demands even where you plan to appeal that amount due to the risk of interest.  Even where you appeal the full lien, consider that the MSPRC can disagree.  And when it does disagree – you will be charged interest on any remaining lien.

What’s next?

The MSPRC has cleverly crafted a new Final Demand letter.  Haro v. Sebelius now seems to stand for one thing: you don’t have to pay Medicare first, so long as it gets paid.  Judge Bury’s pro-plaintiff decision is rendered moot, except for the plaintiff in Haro.  The MSPRC has made it unappealable and likely won’t bother exercising its own appeal rights.  After all, when the MSPRC charges you interest during an appeal do you think you’ll have standing to appeal under Haro?  Your only option will be to use Haro as persuasive authority in a brief against the MSPRC – after you get through the first four levels of Medicare appeals.

If you need assistance with Medicare liens, Medicaid liens, ERISA liens, or any other healthcare liens, contact LRS.  LRS can help resolve all healthcare liens.  Please contact us for more information.

This Blog/Web Site is made available by the publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

ALERT UPDATE: Review of the Rights and Responsibilities letter and the Demand Letters is complete

Review of the Rights and Responsibilities letter (“RAR”) and the Demand Letters for liability insurance (including self-insurance), no-fault insurance and workers’ compensation is complete. Issuance of the RAR resumed on June 10, 2011. A copy of the revised RAR is now available on this website. Issuance of the affected Demand letters is anticipated to resume June 27, 2011. Copies of the revised Demand letters will be made available by that time on this website.

As noted in earlier posts, we truly believe Haro v. Sebelius is the main reason the Rights and Responsibilities letters and Final Demand letters were reviewed.  The entire process took from May 5 to June 27, so you can expect a hefty delay on Final Demands sent during that time period.

Click for a review of the new Rights and Responsibilities Letter.

Click for various reviews of Haro v. Sebelius.

If you need assistance with Medicare liens, Medicaid liens, ERISA liens, or any other healthcare liens, contact LRS.  LRS can help resolve all healthcare liens.  Please contact us for more information.

This Blog/Web Site is made available by the publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.