1. PROVIDIO MEDISOLUTIONS PRESENTS: IT’S NO COIN FLIP: MAKING HEADS OR TAILS OF LIENS AND MEDICARE SECONDARY PAYER COMPLIANCE Prepared for: The Southwest Iowa Lawyer League by Gary M. Goldberg

2. Today’s Agenda Medicare Conditional Payment Resolution Recent changes Best practices Beware: Medicare Advantage Balance billing by hospitals What to do when hospitals don’t bill Medicare Future Medicals Guidance in Third Party Liability Claims The rules and how Medicare can enforce them What’s the latest? Do we have any clarity? Step-by-step approach Providio Services Overview

3. MSP Compliance Continuum Date of Settlement Date of Injury Conditional Payments Future Medicals

4. Medicare Secondary Payer Act Chapter 2, Section 40 40.1 – Medicare’s Recovery Rights “Medicare has a statutory direct right of recovery from the liability insurance as well as any entity that has received payment directly or indirectly from the proceeds of a liability insurance payment. Medicare’s recovery rights take precedence over the claims of any other party, including Medicaid. Medicare’s recovery right is superior to other entities including Medicaid because Medicare’s direct right of recovery is explicitly prescribed in Federal law and other entities’ recovery rights are based on either State law or subrogation rights.”

5. Medicare Secondary Payer Act 40.1(continued) In addition to its direct rights of recovery, Medicare has subrogation rights. “Subrogation” literally means the substitution of one person or entity for another. If Medicare exercises its subrogation rights, Medicare is a claimant against the responsible party and the liability insurer to the extent that Medicare has made payments to or on behalf of the beneficiary for services related to claims against the alleged tortfeasor (and the alleged tortfeasor’s liability insurance). Medicare can be a party to any claim by a beneficiary or other entity against an alleged tortfeasor and/or his/her liability insurance and can participate in negotiations concerning the total liability insurance payment and the amount to be repaid to Medicare.

6. Medicare Conditional Payment Resolution Two general scenarios: 1. Providers bill Medicare for services and then you resolve conditional payments (liens) through the BCRC 2. Provider (usually a hospital) refuses to bill Medicare and instead chooses to file a lien directly

7. Scenario 1: Typical Experience

8. But wait…there’s more!

9. Alphabet Soup

10. Contacting BCRC

12. Curveball: The SMART Act Bipartisan legislation signed into law in January 2013 Designed to speed up Medicare lien resolution progress Centered around the use of a web portal Beset by delays Altered via an “Interim Final Rule” Supposedly will be up and running in 2016

13. Medicare Advantage Liens Big difference between standard Medicare (Parts A & B) and Medicare Advantage (Part C) Claimants may switch back and forth between standard Medicare and Medicare Advantage In most states—including NE and IA—treat Medicare Advantage liens like HMO or indemnity insurance plans In some states (3rd Circuit, Southern District of NY, Western District of Arkansas, Eastern District of LA, Arizona), Medicare Advantage plans are considered within the scope of the MSP Trezza v. Trezza, 2012 N.Y. App. Div. LEXIS 9000, 2012 NY Slip Op 9048 In re Avandia Marketing, Sales Practices and Products Liability Litigation, 2012 U.S. App. LEXIS 13230 (June 28, 2012) (Avandia).1 Cupp v. Johns, 2:14-CV-02016, 2014 WL 916489 (W.D. Ark. Mar. 10, 2014) Collins v. Wellcare Healthcare Plans, Inc., No. 13-6759, 2014 WL 7239426 (E.D. La December 16, 2014)

14. Medicare Secondary Payer Act Section 2, 40.2 (F) - Permissible Liens The MSP provisions do not create lien rights when those rights do not exist under State law. Where permitted by State law, a provider, physician, or other supplier may file a lien for full charges against a beneficiary’s liability settlement. (a lien against a beneficiary will be considered a lien against a liability settlement if there is a binding agreement that the lien will only be enforced if there is a settlement and will be withdrawn otherwise.) Hospital Lien Act is codified within California Civ. Code section 3045.1- 3045.6

15. MSP Billing Requirements Section 2, 40.2 (B) – Billing Options and Requirements – Alternative Billing Generally, providers, physicians, and other suppliers must bill liability insurance prior to the expiration of the promptly period rather than bill Medicare. (The filing of an acceptable lien against a beneficiary’s liability insurance settlement is considered billing the liability insurance.) Promptly means payment within 120 days after the earlier of: 1) the date the claim is filed with an insurer or a lien is filed against a potential liability settlement; or 2) the date the service was furnished or, in the case of inpatient hospital services, the date of discharge) rather than bill Medicare.

16. MSP Billing Requirements Section 2, 40.2 (B) (cont.) Following expiration of the promptly period, or if demonstrated (e.g., a bill/claim that had been submitted but not paid) that liability insurance will not pay during the promptly period, a provider, physicians, or other supplier may either: Bill Medicare for payment and withdraw all claims/liens against the liability insurance/beneficiary’s liability insurance settlement (liens may be maintained for services not covered by Medicare and for Medicare deductibles and coinsurance); or Maintain all claims/liens against the liability insurance/beneficiary’s liability insurance settlement.

17. Advice – Medicare Liens Consider hiring an expert – Why kill all those precious brain cells trying to navigate these issues? If hospitals don’t bill Medicare: During the “promptly period”, explain to the hospital the pitfalls of your case and try to convince them to bill Medicare Submit the bills to Medicare directly yourself: Medicare claims must be filed no later than 12 months after the date of service Call 1-800-MEDICARE to get exact time limit for filing a Medicare claim for the services and/or supplies your client received Submit a Patient Request for Medical Payment form (CMS-1490S)

18. MSP Compliance Continuum Date of Settlement Date of Injury Conditional Payments Future Medicals

19. Basic Rules for Future Medicals (WC) Workers’ Comp: 42 C.F.R. Sec. 411.46 and 47. 42 C.F.R. Sec. 411.46(b) say: “If a settlement appears to represent an attempt to shift to Medicare the responsibility for payment of medical expenses for the treatment of the work-related condition, the settlement will not be recognized. For example, … Medicare will not pay for treatment of that condition.”

20. Basic Rules for Future Medicals (WC) Workers’ Comp: 42 C.F.R §411.46 (d) 1) Rule: Medicare pays for future injury-related care 2) Exception: If WC award designates dollars for future medicals, that money must be spent down and exhausted before Medicare pays This is the statutory justification for MSAs in WC

21. What Third Party Liability Cases? Statutory Obligation Under MSP Act According to the Medicare Secondary Payer Act: “Payment…may not be made…with respect to any item or service to the extent that…payment has been made or can reasonably be expected to be made under a workers’ compensation plan, an automobile or liability insurance plan (including a self-insured plan) or under no fault insurance.”

22. Past – Conditional Payments CMS issues payment on medical bills with the “condition” that they can seek recovery of their payment if they later determine another entity should be responsible. Present – Section 111 Reporting Primary payers (RRE’s) report certain claims involving Medicare beneficiaries to CMS. They report: ORM (Med pay and no-fault): Ongoing Responsibility for Medicals. TPOC (Liability settlement): Total Payment Obligation to Claimant Medicare does two things with this information: Researches if conditional payment were made and starts collection Posts the ICD-9 codes reported to common working file Future – Protecting Medicare’s Future Interests No defined regulation for MSAs in liability claims, but CMS has consistently stated that MSAs are an appropriate tool. Regulations are currently under development Attorneys and claimants still have to comply with the MSP -- 42 U.S.C. §1395y(b)

23. Liability MSAs: Quite the Quandary No formal rules and regulations yet exist for LMSAs 1) WC has fewer damage “buckets” 2) How will state-specific damage caps be treated? 3) What about policy limits? 4) What about other factors? But attorneys, insurers, and claimants still have to comply with the MSP 42 U.S.C. §1395y(b)

24. Future Medicals: Current Guidance MSP = if any portion of the settlement is meant to cover possible future medical expenses that would otherwise be paid by Medicare, Medicare’s interest must be “reasonably taken into account” Treating physician’s note regarding no further treatment satisfies this requirement (CMS Memo 9/29/11) Parties must look at facts in each individual case. MSA is preferred method to protect Medicare’s interest. Medically complex cases and cases with life care plans are particularly well suited for MSA. (Region VI Memo 5/25/2011) MSAs not required (several CMS memos and town hall calls) Providio has other MSP compliance tools that can/should be considered depending on the facts of a each case “Settlement” + Future Medicals = Action is Required

25. MSP Decision Tree For Future Medicals in Liability Cases At time of settlement, is plaintiff on Medicare or Medicare “eligible” within next 30 months?* Medicare eligible = 62 ½ yrs old On Social Security Disability (SSDB) Applied for SSDB Denied SSDB but appealing End stage renal disease ALS Some minors cases Yes Medical Complexity of Future Care Option 1: MSA Option 2: Other Compliance Tools Complex Not Complex Not a CMS requirement, but factors like whether case involves catastrophic injury or life care plan helps the evaluation

26. Apportionment Hinsinger v. Showboat Atlantic, 2011 N.J. Super. Lexis 96 o Hinsinger had MSA of $180,600. Court reduced MSA by 32.77% for procurement costs Benoit v. Neustrom, 2013 U.S. Dist. LEXIS Dist. LEXIS 55971 o Court determined the MSA amount by using a ratio of net settlement proceeds against the average of 2 MSAs performed Is it reasonable to reduce an MSA to allow an offset for attorney fees and costs and to reflect the compromise nature of the settlement? Contact Providio For This Service

27. Discussion Gary M. Goldberg, AAI, ARM Vice President, Business Development Providio MediSolutions, LLC 877-253-3120 x 1663 ggoldberg@providiollc.com