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NJ Court: Federal Law Does NOT Mandate Medicare Set-Asides

The United States District Court of New Jersey recently stated (albeit in an Unpublished Opinion) that Federal Law does not mandate Medicare Set-Asides in a liability context.  The question arose in Sipler v. Trans. Am. Trucking Inc. following a general settlement for $225,000.  After the verbal settlement the defense attorney attempted to insert language stating:

  1. The plaintiff cannot claim reimbursement from Medicare for healthcare arising out of the sued-for claim;
  2. His health insurance will not pay for healthcare arising out of the sued-for claim because those injuries are pre-existing; and,
  3. Medicare will not pay for future treatment and healthcare arising out of the sued-for claim.

The defendant’s first argument requiring a Liability Medicare Set-Aside comes from CMS’s September 2011 Memorandum where it stated, “[a]ll parties do have significant responsibilities under the MSP to protect Medicare’s interests when resolving cases that [include] future medical expenses. A recommended method to protect Medicare’s interest is a set-aside arrangement…”  (Emphasis in Original).  The court noted, “however, it is well-settled that ‘[i]nterpretations such as those in opinion letters-like interpretations contained in policy statements, agency manuals, and enforcement guidelines … lack the force of law…’ ” Citing Christensen v. Harris County, 529 US 576, 587 (2000).

Next, the court very clearly stated what would eventually become its holding:

Indeed, no federal law requires set-aside arrangements in personal injury settlements for future medical expenses.

What makes this decision most interesting is that it came after the Federal Register’s Advanced Notice for Proposed Rulemaking regarding Liability Medicare Set-Asides (LMSAs).  In the end, the Court enforced settlement without the three terms discussed above.  But our main takeaway from this case is the Court specifically stating there are no federal laws requiring LMSAs.

At Lien Resolution Services we can assist you with Medicare lien resolution, Medicaid lien resolution, ERISA liens, private insurance liens, and more.  We’ll take care of getting you the “lien” and reducing it too.

 
Ryan J. Weiner
Lien Resolution Services
www.lienresolutionusa.com
https://lienblog.wordpress.com
rweiner@lienresolutionusa.com
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.
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AAJ Working Toward 2nd Circuit Allocation of Medicare Lien

The AAJ sent out an update regarding a case where it is attempting to win a major victory for Medicare beneficiaries.  The plaintiffs are using Bradley v. Sebelius to try to convince a probate court to allocate the settlement funds and reduce Medicare’s lien.  The AAJ writes,

In Bradley, the probate court ordered an apportionment of a small settlement for medical negligence at a nursing home between the estate, which was obliged to reimburse Medicare for advanced medical expenses, and the decedant’s surviving children, who had no such obligation. In Guarneri, the parties settled a medical malpractice case, but lawyer Turkewitz was dealing with a probate court that would not give his client — the surviving spouse —authority to disburse funds from the settlement. When Turkewitz’s client asked the court to apportion the settlement funds and to allow her to distribute the funds, the probate court refused to move forward without the participation of the Centers for Medicare and Medicaid Services (CMS).
Sadly, this is a case that dragged out far too long with no word from CMS. The client’s husband died in January 2007, the case settled in February 2008, and then things grounded to a halt. The trial court told the probate court to apportion the money, the probate court sent it back to the trial court for apportionment, and the trial court sent it back to the probate court for allocation. All the while, no one has heard from CMS.
A Turning Point, at 10 Percent Interest

At long last, the New York City Department of Social Services agreed to the allocation, and said it will accept a proportional share of the settlement. When CMS finally surfaced, instead of compromising, it stated it would send the final debt to the U.S. Treasury Department for collection of the full amount of the debt, minus procurement costs, and it would charge interest on the full amount of the debt at a rate of 10 percent a year.
CCL Litigation Counsel Valerie M. Nannery has contacted the MSP recovery center to ask it to recall the debt from Treasury because no money has even gone to the Estate – meaning there is no money with which to pay Medicare or Treasury. Nannery has also contacted the MSP coordinator in New York to work with Medicare to compromise the debt owed. Medicare has never replied to Turkewitz, who contacted Medicare repeatedly requesting that it compromise its lien.
In the more than five years since Michael Guarneri died, the settlement money has been held in an escrow account. His surviving wife and children have only received enough money to cover funeral expenses.
Next Steps
CCL hopes that Medicare will compromise its lien amount. But if it continues to refuse to participate in an allocation proceeding in the probate court in New York, and if the probate court continues to refuse to act in Medicare’s absence, CCL may need to go to the state court’s appellate division to ask it to mandate the probate court to act and allocate the proceeds of the settlement that was reached more than four years ago.
Subsequent to any allocation and distribution of funds, if CMS maintains that it is entitled to recover its full lien amount, and refuses to take a reduced recovery, CCL will litigate the issue against CMS in the federal courts. The issue of whether Medicare is entitled to recovery only from the part of a settlement that is allocated to medical expenses would eventually be decided by the U.S. Court of Appeals for the Second Circuit

The obvious take away here is that they are nowhere near an authoritative victory.  But – CMS’s lack of response can only help the plaintiffs when the Second Circuit finally gets this case.  My only concern is that CMS might never appeal if it loses, knowing the trial court (even at a Federal level) will be nothing more than persuasive to future cases.

At Lien Resolution Services we can assist you with Medicare lien resolution, Medicaid lien resolution, ERISA liens, private insurance liens, and more.

 

Ryan J. Weiner
Lien Resolution Services
www.lienresolutionusa.com
https://lienblog.wordpress.com
rweiner@lienresolutionusa.com
 
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.

 

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ERISA: Amicus Briefs Filed in US Airways v. McCutchen

During the U.S. Supreme Court’s upcoming term, the court is scheduled to hear U.S. Airways v. McCutchen, 663 F.3d 671 (3d Cir. 2011).  We have previously written about the issue of equitable doctrines in ERISA:

Now that the Supreme Court has granted Certiorari and agreed to hear the appeal of US Airways v. McCutchen we are beginning to see Amicus briefs.  As of September 13 we count six briefs filed so far.

ERISA and health insurance plans are arguing that the application of equitable doctrines harms other beneficiaries of theplan.  They argue that ERISA Subrogation and reimbursement recovery flows to the benefit of the pool of insureds.  They further argue this limits premium rate increases.

We disagree.  Plaintiffs disagree.  Plaintiffs’ attorneys disagree.  And we think most insured individuals will disagree.  We think it is clear that subrogated recoveries flow to the benefit of the ERISA plans.  Those plans (United HealthCare, Humana, BCBS, etc.), their subrogation providers (Ingenix, ACS, etc.) and companies like US Airways receive a windfall.  None of the recovery is returned to the insurance pool to help the insureds or to limit premium increases.

In its simplest terms, subrogation allows the health insurance to stand in the plaintiffs’ shoes and recover what they would not have paid but for the defendant’s negligence.  But ERISA subrogation supposedly is not subjected to the same limits (comparative fault, policy limits, risk limitation through settlement) to which the plaintiff is subject.  These are the bases for anti-ERISA arguments.

US Airways v. McCutchen should be decided in June or July of 2013.

If you need help reducing an ERISA lien please contact us.  At Lien Resolution Services we can assist you with Medicare lien resolution, Medicaid lien resolution, ERISA liens, private insurance liens, and more.

 

Ryan J. Weiner
Lien Resolution Services
www.lienresolutionusa.com
https://lienblog.wordpress.com
rweiner@lienresolutionusa.com
 
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.
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Medicare Advantage Plans Entitled to Medicare Liens

In late June, the 3rd Circuit held that Medicare Advantage Plans (“MAP” or “MAPs”) have the same rights to reimbursement as regular Medicare.  The district court in In Re Avandia Marketing, 2011 U.S. Dist. LEXIS 63544, (E.D. Penn. 2012) originally held the plans do not have the same rights to reimbursement as regular Medicare.  However, the 3rd Circuit took a different approach.

The underlying Avandia mass tort/pharmaceutical case involved a plethora of Medicare beneficiaries as Avandia had been used to treat diabetes patients.  Many of these patients were also MAP beneficiaries.  As a result, Humana (with its multiple MAP plans) filed suit to enforce its rights under the Medicare statute.  Humana’s goal was to enforce its private right for double damages pursuant to 42 U.S.C. § 1395y(b)(3)(A) and for reimbursement of payments it made for treatment of Avandia-related illnesses on behalf of its MAP beneficiaries.

The 3rd Circuit agreed with Humana.  You should now consider all MAP plans to have the same rights as a regular Medicare lien.

You should be even more vigilant when collecting your plaintiff’s insurance information.  If you fail to pay a Medicare Advantage Lien that MAP plan could sue you (as the attorney) for double damages.  Unfortunately, the MAP plan will receive your settlement information from Medicare through Section 111 Reporting.  They will know your case settled.  But, there is also good with this case.  If a MAP plan is provided the same rights as a regular Medicare lien under the MSP statute, it also must adhere to that statute’s reduction rules.  At LRS we believe a MAP plan cannot claim the full lien, but must reduce by your fees and costs without questioning those fees and costs.

If you need help reducing a Medicare Advantage Lien please contact us.  At Lien Resolution Services we can assist you with Medicare lien resolution, Medicaid lien resolution, ERISA liens, private insurance liens, and more.

 

Ryan J. Weiner
Lien Resolution Services
www.lienresolutionusa.com
https://lienblog.wordpress.com
rweiner@lienresolutionusa.com
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.
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LRS Public Comment: CMS-6047-ANPRM – CMS Proposed Rules for Liability Medicare Set-Asides

As you should know, Medicare has taken its first steps toward requiring Medicare Set-Asides in all personal injury cases.  On June 15, 2012, it (via CMS and HHS) posted a request for public comment on rules it hastily created for a potential LMSA system.  Our initial analysis of the federal register posting from June 15 can be found on our blog: Advanced Notice of Proposed Rulemaking.

We have finished our initial Public Comment on the matter.  You can read our Public Comment by clicking this link.

If you agree with our comment we urge you to e-sign in agreement by clicking here.

Our Public Comment emphasizes the long-term impacts that LMSAs will have on all personal injury cases.  We believe the requirement of LMSAs will create an unsustainability that severely limits this legal field.  Please take your time to read our comment and  e-sign in agreement by clicking here.

 

Ryan J. Weiner
Lien Resolution Services
www.lienresolutionusa.com
https://lienblog.wordpress.com
rweiner@lienresolutionusa.com
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.
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Medicare Secondary Payer Recovery Portal is Live

The Medicare Secondary Payer Recovery Portal (“MSPRP”) is live and online through MSPRC.info.  If you ever tried the automated phone system you know that was a massive failure that could not provide the information you needed.  It didn’t really allow you to log complaints, request certain items, check on overdue statuses, etc.

So does the MSPRP work?

Maybe.  We’re waiting on our account access right now.  CMS and the MSPRC are being very careful, only providing corporate IDs to organizations who should receive access.  We do have a sort of “backdoor” access through a client who graciously allowed us to use her individual access.  Later in the week we will show you screenshots (with redactions) from her case.

From the MSPRC:

The Medicare Secondary Payer Recovery Portal is Live!

A new online Self-Service Tool to help manage your Medicare recovery case.

The Centers for Medicare & Medicaid Services (CMS) has implemented a new web-based tool designed to assist in the resolution of Liability Insurance, No-Fault Insurance, and Workers’ Compensation Medicare recovery cases. The new tool is called, The Medicare Secondary Payer Recovery Portal (MSPRP).

The MSPRP gives users (attorneys, insurers, beneficiaries, and TPAs) the ability to access and update certain case specific information online. Activities that currently require written communication or telephone calls to the Medicare Secondary Payer Recovery Contractor will soon be able to be done through the portal.

The MSPRP will allow users the ability to electronically perform the following activities:

  • Submit Proof of Representation or Consent to Release documentation – Instead of mailing in an authorization, users will be able to upload authorizations through the portal.
  • Request conditional payment information – Requesting an updated conditional payment amount or a copy of a current conditional payment letter will be as simple as clicking a few buttons.
  • Dispute claims included in a conditional payment letter – Users will be able to view the claims listed on the conditional payment letter and dispute unrelated claims online.
  • Submit case settlement information – Users will be able to input settlement information online and upload a copy of the settlement documentation through the portal.

Click here to learn how to register and access the portal. All information on the new portal is located in the Tool Kits section above.

At Lien Resolution Services we can assist you with Medicare lien resolution, Medicaid lien resolution, ERISA liens, private insurance liens, and more.  We’ll take care of getting you the “lien” and reducing it too.

 
Ryan J. Weiner
Lien Resolution Services
www.lienresolutionusa.com
https://lienblog.wordpress.com
rweiner@lienresolutionusa.com
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.
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CGI v. Rose – 9th Circuit Reduces ERISA Lien Rights

Last Thursday, Public Justice won a federal appeals court ruling limiting ERISA plan’s ability to collect from personal injury lawsuits.  This is Public Justice’s second ERISA lien victory in less than a year.  Their tireless work has provided plaintiffs with a ray of light for us to fight the ERISA liens that so greatly limit personal injury recoveries.  In its “E-lert” from Thursday, Public Justice Executive Director Arthur Bryant wrote,

For the second time in the last year, Public Justice has won a federal appeals court ruling that an employer-based insurance plan is not entitled to full reimbursement of medical claims from an injured beneficiary who recovered only a fraction of damages from the person who caused the injury.  Last November, in the first Public Justice victory, the Third Circuit similarly blocked a plan’s attempt to obtain 100 percent reimbursement.

In its heavily anticipated ruling in CGI v. Rose yesterday [Wednesday, June 20, 2012], the Ninth Circuit agreed with the Third Circuit, holding that “parties may not by contract deprive [a court] of its power to act as a court in equity,” and made clear that notwithstanding the express terms of a Plan, it is within a district court’s broad equitable powers under ERISA to apply principles of equity in fashioning appropriate relief.

In a concurring opinion, Circuit Judge Schroeder observed that it would be “manifestly unfair” to allow the plan to recoup 100 percent of its medical expenses.  Such a result, Judge Schroeder wrote, would “leav[e] the beneficiary vastly undercompensated for her actual damages” and “unjustly enrich” the ERISA plan, which had been paid premiums for the expenses it was now seeking to recoup.

The court also flatly rejected the insurer’s attempt to sue the attorney who represented an injured woman in her case against a third party.  That holding is the first in the country to deny insurers the ability to intimidate by threat of lawsuit the lawyers who represent injury victims.

Mr. Bryant also noted that more than 170 million Americans are covered by an ERISA health insurance plan.  That means nearly 55 percent of Americans could benefit from this decision.  Equally important is to review the cross-section of America that follows this new equity rule.  Because of Public Justice’s success in the 3rd Circuit and 9th Circuit, more than 85 million Americans live in jurisdictions that follow this rule.  Back to percentages – that is 27.4% of Americans.  Keep in mind only one circuit has ruled unfavorable on the same question – the 11th Circuit (FL, AL, GA).  The other circuits have not yet been provided the opportunity to rule on this issue.

 

What does CGI v. Rose mean for ERISA liens?

This case seems to create a silent maximum lien for ERISA liens in personal injury.  Your best reduction tools are our usual favorites: the common fund doctrine reduction for attorney fees/costs and the made whole doctrine.  We suggest you don’t get greedy as ERISA lien holder’s greed is what forced these cases in the first place.  The most likely scenarios are 50/50 splits of net settlements where the ERISA lien exceeds the client take-home.  Many state Medicaids follow such a rule.

We also have some concern that the Supreme Court will review either this case or McCutchen v. US Airways.  After all, the court composition hasn’t really changed since Sereboff came down in 2006 (it remains 5-4 conservative).

Please click here for a copy of CGI v. Rose.

 

Ryan J. Weiner

Managing Partner

Lien Resolution Services

www.lienresolutionusa.com

https://lienblog.wordpress.com

rweiner@lienresolutionusa.com

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.
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