Medicare Compliance Overview Jessica C. Smythe, Esq. Crowe Paradis Services Corporation Dave Peterson, Esq. Jones Funderburg Sessums Peterson & Lee, PLLC Bryan G. Bridges Markow Walker, PA

Medicare Secondary Payer Statute (MSP) What is the Medicare Secondary Payer Statute? Collection of statutory provisions Created by the Omnibus Reconciliation Act of 1980 Enacted by Congress in 1981 Has undergone a series of amendments (i.e., 1982, 1984, 1985, 1986, 1989, 2003 & 2007) Congress enacted the MSP in order to reduce spending and preserve the fiscal integrity of the Medicare program The basic premise is that Medicare will be the secondary rather than primary payer under certain conditions and we can’t shift the burden of medical care in those situations to the Medicare program.

MSP Compliance requires three major focuses Conditional Payments – Reimbursement for past payments Medicare Set Asides- Allocation of Money for future treatment Reporting pursuant to MMSEA– The Treasure Map

***Social Security Disability Insurance Entitlement is retroactive Lengthy multi-stage appeals process Moving target for Medicare eligibility Age 65 years or more SSDI for 24 months *** End Stage Renal Disease (kidney failure) Remember: Medicare Eligibility MSP Background

MSP Compliance-Conditional Payments: Paying for the Past

What is a Conditional Payment? Payments made by Medicare under the condition that the primary plan will repay Medicare once it is demonstrated the primary plan is responsible for the payments (42 U.S.C. 1395y (b)(2)(B)(ii) ) Allows beneficiary to receive medical treatment when no other insurance is available Allows medical care providers to get paid MSP Background 6

Right of Recovery by Medicare for Conditional Payments Medicare can bring an action for double damages against any and all entities responsible for payment under the primary plan Medicare must be repaid within 60 days of final demand letter regardless of whether the amount is disputed or is being appealed or interest begins to accrue (Haro v. Sebelius) Enforcement is through the Department of Treasury MSP Background 7

What should I do? Need to establish Medicare eligibility status on every settlement – no dollar threshold – (HINT – S 111). SSDI / Medicare Check Incorporate into discovery Key is SSDI not Age If you discover Medicare eligibility status, then have your MSA provider or internally investigate any conditional payments, verify, and negotiate

Negotiate Don’t Just Pay the Asserted Amount: Claim paid was not related to the injury being settled Duplicate payment Care was provided by an unauthorized provider and appropriate care was being provided

U.S. v. Stricker, U.S. District Court, N.D. Alabama (filed December 1, 2009) Complaint filed by Medicare against major insurance carriers, insureds and plaintiffs’ attorneys arising out of a 2003 class action lawsuit Out of the 20,000 class action plaintiffs, 907 were Medicare beneficiaries; claim ultimately settled for $300 million Medicare made conditional payments in the claim that were not reimbursed upon settlement

Medicare’s Theory of Recovery Carriers made payments under product liability policies Defendants knew or should have known that conditional Medicare payments have been made Defendants allegedly did not check prior to distribution of settlement for the existence of conditional payments

U.S. v. Stricker: Updated Procedural History Suit filed December 1, 2009 Medicare filed Partial Summary Judgment based upon payment of settlement and failure to reimburse CPs and defendants filed Motions to Dismiss based upon SOL Medicare’s Motion was denied September 30, 2010 and defendants’ Motion to Dismiss was granted

United States v. Stricker: Updated Procedural History Defendants’ Motion to Dismiss granted based on judge’s determination of the correct SOL (3 years v. 6 years since the underlying action is based upon a tort claim, not contract) Judge determined the statute of limitation accrued from the date the settlement was approved by the court, September 10, 2003 Medicare argued that the statute continued to accrue when yearly payments were made by defendants (pursuant to the terms of settlement, defendants were to make payments until 2013)

United States v. Stricker: Updated Procedural History On October 29, 2010, Medicare filed a Motion to Reconsider the decision dismissing Medicare’s claim On November 2, 2010, Judge Bowdre, the judge who earlier dismissed Medicare’s claim, granted the motion for reconsideration on the grounds that Medicare should be allowed to argue the theory of continuing accrual and tolling with respect to the statute of limitation Briefs are due to the court on this issue November 16, 2010

MSP Compliance – Medicare Set Asides: Forecasting the Future

Two types of claims require an MSA with submission to CMS for approval The petitioner is a Medicare recipient at the time of settlement and the workers’ compensation settlement is $25,000 or greater Settlement amount includes, but is not limited to wages, attorney fees, all future medical expenses, repayment of any conditional payments, and any previously settled portion of the WC claim. July 11, Class I

Class II The petitioner has a “reasonable expectation” of becoming a Medicare beneficiary within 30 months of the date of settlement and the settlement is $250,000 or greater Settlement amount includes, but is not limited to wages, attorney fees, all future medical expenses, repayment of any conditional payments, and any previously settled portion of the WC claim. July 11, 2005.

Class III Problem: CMS has stated that these (Class I AND Class II) are only “workload review thresholds.” CMS has also stated that parties must “consider and protect Medicare’s interests when settling any workers’ compensation case (Class III); even if review thresholds are not met, Medicare’s interest must always be considered.” Solution: Review each file with a uniform approach at compliance Medicare Status, Lost Time, Return to Work, Age, Medical reserves, Dollar Amount, Type of Settlement CPSC Score Sheet – Spectrum Analysis

MSP Compliance- Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 The Treasure Map!

MMSEA Medicare, Medicaid & SCHIP Extension Act of 2007 (MMSEA) Section 111 of the MMSEA adds new reporting requirements for liability (including self insurance), no fault, and workers compensation claims at 42 U.S.C. 1395y(b)(8). The entities responsible for complying are referred to as Responsible Reporting Entities (RRE). Information is available on the CMS website: The purpose of Section 111 is to ensure proper coordination of benefits between Group Health Plans, Non-Group Health plans and Medicare.

Reportable Events: ORM and TPOC ORM claims are claims where the RRE has accepted ongoing responsibility for medical benefits The RRE must also report when ORM is terminated ORM is associated with workers compensation and no fault liability plans of insurance

Reportable Events: ORM and TPOC TPOC events are settlements, judgments, awards or other payments separate from/in addition to ORM events The RRE is satisfying its “total payment obligation to the claimant”

New Section 111 Reporting Deadlines On November 9, 2010, CMS issued an alert changing the reporting deadlines with respect to liability claims Previous deadline was that all TPOCs after October 1, 2010, were to be reported to CMS beginning January 1, 2011 Now, TPOCs occurring after October 1, 2011, are to be reported beginning January 1, 2012 But alert says early reporting is “welcome and encouraged”

Reporting Deadlines for ORM and Workers Compensation Claims November 9, 2010 CMS Alert does not change deadlines for ORM claims, including workers compensation and no fault insurance claims ORM claims in existence as of January 1, 2010, must be reported to CMS beginning January 1, 2011 CMS Alert also extended reporting thresholds

Reporting Thresholds TPOC events prior to January 1, 2013 with TPOC amounts totaling $0-$5,000 are exempt from reporting TPOC events dating January 1, 2013-December 31, 2013 with TPOC amounts totaling $0-$2000 are exempt from reporting TPOC events dating January 1, 2014-December 31, 2014 with TPOC amounts totaling $0-$600 are exempt from reporting All TPOCs after January 1, 2015 are reported regardless of amount

MMSEA-Section 111 Threshold for ORM Reporting: Only applies to Worker’s Comp claims Have to meet all of the following criteria: Medicals only; Lost time of no more than 7 calendar days; All payments have been made directly to the medical provider; and Total payment does not exceed $ MIR, MMSEA & Section 111

Thank You Jessica C. Smythe, Esq. Crowe Paradis Services Corporation 400 Riverpark Drive Ste 400 North Reading, MA T (866) 630-CPSC F (978) Bryan G. Bridges Markow Walker, PA 599 Highland Colony Parkway, Ste 100 Ridgeland, MS Tel Fax Dave Peterson Jones Funderburg Sessums Peterson & Lee, PLLC Post Office Box Jackson, MS Telephone No.: Facsimile No.: