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Settlement Payments & Section 111 of the MMSEA

In all cases where healthcare lien resolution is involved, payment of the settlement and liens can become contentious.  Those issues are multiplied in Medicare lien resolution where non-payment of liens can result in 10.875% interest, double damages against both plaintiff and defense attorneys, and a $1,000 per day penalty for non-compliance with Section 111 and MMSEA reporting requirements.  So what are some options that both plaintiff and defense can use to better protect themselves?

First, always begin healthcare lien resolution, and especially Medicare lien resolution, early.  Report to the COBC as soon as you file your case.  If you expect to settle pre-suit, report immediately.  Keep in mind it takes approximately 80 days for the MSPRC to send you a Conditional Payment Letter after you report to the COBC.

Second, when you are ready to request a Final Demand Letter from the MSPRC, make sure you have in fact settled.  While the attorneys may have agreed on a figure, if there is no settlement release signed, there is no settlement.  This will protect you from the end of the 60 days (plus 5 more for “mailing time”) no-interest period.

Third, both plaintiff and defense attorneys should be aware of the Medicare lien throughout the process.  This will allow faster payments when settlement has finally occurred.

Fourth, when payment does occur, both plaintiff and defense will want to protect themselves.  While the MSPRC and even the Department of Justice have not yet given specific guidance on protecting oneself from Section 111 and MMSEA penalties, the following plan seems to show good-faith efforts by all parties:

  1. Use a two-check system.  This means your first check should be for the Final Lien Demand made out solely to Medicare.  Then, your second check should be for the remainder of the settlement amount, but made out to both the plaintiff and plaintiff’s attorney.
  2. The Medicare lien check should be written by the defense, but should be mailed to the MSPRC by the plaintiff’s attorney.  The plaintiff’s attorney requests the final lien and receives the final lien.  As a result, the plaintiff’s attorney will have the appropriate documents to send with the requested amount.  Additionally, this not only shows cooperation, but also shows efforts by both parties to satisfy the Medicare lien.

Please remember that the above is simply a suggestion.  CMS, the MSPRC, and the COBC have no given any guidance on the payment process.  During the April 29, 2010 Town Hall Meeting/Webinar the MSPRC representative specifically noted that they have not given any specific guidance (and would not do so herself) on payment of liens.  This is not guaranteed to protect you from Section 111 and MMSEA penalties.

If you have any questions regarding lien resolution or would like assistance with the lien resolution process, please contact us.

Ryan J. Weiner
Co-Founder Lien Resolution Services
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.

About Ryan J. Weiner

Co-Founder of Lien Resolution Services, LLC, a national healthcare lien resolution firm. Our goal is to assist in the fair administration and resolution of healthcare liens on personal injury cases. Please visit our website for more information: www.lienresolutionusa.com.

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