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Does Medicare’s New Final Demand Comply with Haro?

On Monday, June 27, 2011, the Medicare Demand Freeze of 2011 ended.  It took the MSPRC and its parent organization, the US Department of Health and Human Services (HHS) at least 50 days to rewrite the Medicare Final Demand Letter.  For weeks we speculated that Haro v. Sebelius had forced the MSPRC to end its claim for interest on cases where the Final Demand is appeal.

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.

Ryan J. Weiner
Co-Founder Lien Resolution Services
Twitter: @LienResolve
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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