Did you ever wonder why Medicare and its agencies (MSPRC, CMS, COBC) are not held accountable when they owe a beneficiary money? The MSPRC will require you and your client to wait 10-14 weeks for reimbursement.
However, when you owe the government money there are severe consequences for late payments. For instance, interest accrues. Penalties will be imposed and even severance of benefits can result from a plaintiff-beneficiary’s failure to pay a Medicare lien. Even the attorney can be liable for interest on the unpaid MSPRC lien. What can the legal community, especially plaintiffs’ attorneys, do to avoid Medicare penalties?
Lien Resolution and Appeals Can Lead to Lien Reimbursement
My company, Lien Resolution Services, had a case where we completed lien resolution with Medicare and the MSPRC had issued a final lien demand. Once a final lien demand is issued the plaintiff must pay Medicare in full within 60 days, otherwise interest on any remaining balance accrues at a rate of 11.25% per year. As the plaintiff’s attorney, you do have the right to file an appeal or waiver (within 120 days); however, you nonetheless must pay the amount owing to the MSPRC within the 60-day time frame. Keep in mind a response on any appeal or waiver usually takes well beyond the 60 day payment time frame.
In this case, we paid the full amount of the lien within the required time frame. In the meantime, we successfully appealed lien, reducing it down by almost $10,000, or, 75 percent. This meant that Medicare owed our client $10,000. Most of the time, a lien reimbursement check takes about six weeks to process from the MSPRC accounting department. The MSPRC official time frame remains 10-14 weeks for a reimbursement check.
At Lien Resolution Services, we are familiar with the practices at Medicare we always follow-up to make sure that actions are completed within the requisite time frames. We followed up in this instance only to find out that the MSPRC had not only been late in preparing the reimbursement check, but also that it had failed to process the check.
At this point it had been almost 6 weeks since the reimbursement had been agreed to by the MSPRC. It had been 10 weeks since LRS sent the Medicare lien dispute. We requested a discussion with a MSPRC supervisor. Unfortunately, he told us that there was no way to rectify the mistake and that it would take another 6 weeks to issue the check. Based on the current rules and regulations, this is the best possible outcome. Too bad the client had to wait for his money.
The MSPRC and Lien Resolution’s Double-Standard
This is where the double-standard becomes relevant: What happens to the interest the Federal Government collects on that money that rightfully belongs to the client? The MSPRC received it promptly from the client. The client did not let it sit in his own account, accumulating interest for 12 weeks. But the MSPRC will have had this money that does not belong to it in its accounts for nearly a quarter of the year. It will collect interest.
I asked the representative from MSPRC about the interest that had accrued and if our client would be reimbursed for that loss. He thought I was funny. Needless to say there should be some way to hold MSPRC accountable for these kinds of errors. I have considered a lawsuit under the Federal Tort Claims Act.
The FTCA and Medicare – Would it Work?
But there are many issues. For example, at what point does a grace period end? This reimbursement is based on a mistake. Someone at the MSPRC mistakenly included charges unrelated to the lawsuit and settlement. This mistake occurs 99% of the time. It is the reason why LRS disputes so many Medicare liens (we can help resolve your Medicare liens too). The failure to print a reimbursement check is also based on a mistake. The MSPRC is a large, partially outsourced, bureaucratic machine. It is vastly understaffed – another reason why the Responsible Reporting Entities (“RREs”) reporting deadlines have been pushed back to October 1, 2010.
Then you must consider the cost-benefit analysis of such a lawsuit. In this case, the interest on $10,000 probably would not come close to paying for a lawsuit. The system is never “fair.” As a plaintiff’s attorney or a beneficiary you must remain vigilant when dealing with the MSPRC. Notify the COBC early. Negotiate with the MSPRC often. Review and dispute liens multiple times. This process is time consuming and a drain on your resources, but it is necessary.Marcy Spitz Co-Founder Lien Resolution Services www.lienresolutionusa.com https://lienblog.wordpress.com MSpitz@lienresolutionusa.com