Answer: Medicare has, in the past, been willing to reduce its lien if the lien will consume the net proceeds of the settlement or judgment.  Most commonly, Medicare allows a three-way split: Attorney takes 1/3, Medicare takes 1/3, and the claimant takes 1/3.  This allows everyone to recover something.

Medicare does also consider waiving its entire lien, in light of evidence or exigent circumstances demonstrating why Medicare should take $0 for its claim.  In one circumstance, a claimant needed the funds  — which would have been subject to Medicare’s lien — to keep her house.  Obtaining a full Medicare waiver really depends on the severity of the circumstances and the ability to get Medicare to listen.  Our team of Medicare Lien Analysts deals with these sort of issues daily.  If you would like, we can put you in contact with someone who can walk you through the finer points of getting Medicare to reduce its lien.

The post Is Medicare’s lien higher than your settlement? appeared first on Garretson Resolution Group.

Question:

Answer: Yes, you should be treating these policies differently, as they are different agreements between different parties.  Stop loss policies are contracts between employer groups and stop loss carriers.  Plan members (employees) are not parties to stop loss policies and thus they are arguably not bound by stop loss policies.  The plan members are only bound by the actual plan document.

As you know, stop loss scenarios arise when an employer or Plan purchases insurance coverage intended to protect it for higher or catastrophic losses.  In the case of a higher loss, a self-funded Plan would pay the entire loss/claims amount but would be reimbursed by the stop loss carrier for any amount above the dollar-level where the stop loss insurance policy took effect (known as the “attachment point”).  Notably, the use of “stop-loss” insurance does not change a self-funded plan into an insured plan.  Bill Gray Enter., Inc. Emp. Health & Welfare Plan v. Gourley, 248 F.3d 206 (3rd Cir. 2001), American Medical Security, Inc. v. Bartlett, 111 F.3d 358 (4th Cir. 1997).  Courts have held that even with stop loss arrangements, the Plan still has ultimate liability to plan participants.  Thus a Plan may make a reimbursement claim for the entirety of benefits paid (including the amount reimbursed by the stop loss carriers).  However, the stop loss carrier is not provided with a similar right to recover from a plan participant.  The stop loss carrier is not a party to the plan between the employer and employee.  Unless the plan language specifically states that the stop loss carrier is assigned a right of reimbursement OR the plan participant specifically agrees in writing to repay the stop loss carrier, the stop loss carrier should not have a right under ERISA or other state law to seek reimbursement from the plan member.  Their sole remedy should be to seek repayment from the health plan if and when it receives reimbursement from the plan member’s tort settlement.

In your circumstance, only the health plan should have a right of reimbursement.  Even if the health plan did provide for an assignment to the stop loss carrier (and this was expressly communicated to the plan member in the plan document), that right would be no greater than the health plan’s right and thus would be susceptible to the made whole and common fund principles.

In sum, we don’t believe the stop loss policy has a role in the equation because there is no privity of contract with the plan member.  In determining reimbursement rights the only applicable policy is the official plan document and its terms.  The Supreme Court’s recent decision in US Airways v. McCutchen makes this point abundantly clear.

The post How does a stop loss policy affect a plan’s reimbursement rights under ERISA? appeared first on Garretson Resolution Group.

The legislation aims to ease the settlement of workers’ compensation cases involving future medical costs that Medicare will pay. In those matters, Medicare has to review and approve a set-aside account to hold the funds for Medicare’s future costs. Congressmen Reichert said he wants injured workers to have “confidence that their health care claims will be processed in a fair and timely manner.”

The bill has been referred to the House Ways and Means and House Energy and Commerce Committees.

Keep monitoring our blog for updates on this bill as it moves through Congress.

The post New Movement on Capitol Hill to Reform Workers’ Compensation Cases Involving Medicare appeared first on Garretson Resolution Group.

Question:

Answer: In short, a hospital cannot submit bills to Medicare for reimbursement and attempt to assert a lien on the same matter.  It must choose one or the other.

Providers have 12 calendar months from the date of service to submit a claim to Medicare. If for any reason they submit an untimely claim, they cannot bill the beneficiary except for co pays/deductibles.

Once a provider bills Medicare, the provider must withdraw all claims/liens against the liability settlement (except for claims related to services not covered by Medicare and for Medicare deductibles and coinsurance). This applies even if Medicare did not pay the claim or if the provider refunded payment received back to Medicare. If the provider collected on a lien after billing Medicare, then the provider must issue refund to Medicare or the patient as set forth at this section. Medicare Secondary Payer Manual, Chapter 2, § 40.2.

42 U.S.C. § 1395cc(a)(1) requires that Medicare providers file agreements “not to charge [except deductible or coinsurance amounts] any individual or other person for items or services for which such individual is entitled to have payments made under this sub-chapter.” The First Circuit held that the Medicare statutory language, including 42 U.S.C. § 1395cc(a)(1), barred a hospital from balance billing the third party settlement, where the hospital was paid by Medicare, and then the claimant’s personal injury claim settled with payment of the Medicare lien. Rybicki v. Elliot Hospital, 792 F.2d 260 (1st Cir. 1986).

The post Help! Can a hospital bill Medicare & issue a lien against my client? appeared first on Garretson Resolution Group.

So it may be a good practice to see if traditional Medicare liens apply even if you believe that Medicare Part C paid for all your client’s related care.  Along those lines, if Medicare Part A/B only lists hospice charges as conditional payments, you should determine which entity paid for the rest of your client’s care — it could be Medicare Part C.

For more information, check out http://www.medicare.gov/Pubs/pdf/02154.pdf

The post Have Medicare Part C Clients? appeared first on Garretson Resolution Group.

Question:

Answer: Your question is timely, and drives at how quickly the SMART Act will be fully implemented. Signed into law by President Obama on January 10th of this year, the SMART Act will amend the Medicare Secondary Payer Act (42 U.S.C. Section 1395y(b)(2)) in a number of ways. Most notably, Section 201 of the SMART Act provides that CMS shall establish a web portal within which parties who are proactively addressing Medicare’s priority right of recovery for conditional payments made would be able to fully address the obligation (start to finish) within 120 days. However, this web portal, and the vast majority of the regulations operationalizing the SMART Act, are yet to be rolled out as CMS has until October 10, 2013 to do so. For the time being, it is status quo for MSP reimbursement claims, understanding that CMS will be filling in the blanks as the year goes on.

The post Do you know how the SMART Act could affect your handling of Medicare reimbursement claims? appeared first on Garretson Resolution Group.

Please join us for an exciting event presented by HarrisMartin Publishing. The HarrisMartin Complex Litigation Conference will take place Wednesday, May 29th in Chicago and our very own Matt Garretson will be speaking along with other nationally recognized faculty. Matt will be participating in a panel discussing “The Increasing Scope & Role of Special Masters”. Check out the rest of the conference agenda here. Be sure to register soon!

The post Matt Garretson Speaking at HarrisMartin’s Complex Litigation Conference appeared first on Garretson Resolution Group.

Answer:  If the MedPay benefits were paid directly to the medical provider (meaning the payment went to the doctor/hospital), then Medicare cannot recover for the costs of those services. Because Medicare did not make those payments, it would not have a claim for reimbursement.

But, if the MedPay benefits were paid to the claimant, then Medicare may have a reimbursement claim on the MedPay proceeds. For example, if a case settles for $100,000, and $20,000 in MedPay benefits were paid directly to the claimant, Medicare could determine that there was a total sum of $120,000, available for potential reimbursement. However, Medicare would still have to account for the procurement costs.

The post Are MedPay Benefits Subject to Medicare Reimbursement? appeared first on Garretson Resolution Group.

It’s Been A Big Week at the U.S. Supreme Court… The Court refused to hear a case involving the reimbursement rights of Medicare Part C plans, and upheld US Airway’s rights to recoup costs under ERISA.

Medicare Part C and Avandia

On Monday, the Court denied cert in the In Re: Avandia case, leaving a federal appellate court’s ruling intact which gives Humana — the administrator of a Medicare Part C plan — effectively the same rights Medicare would have in an action against the makers of the diabetes drug. Click here to read (p. 2). The insurer sued GlaxoSmithKline in 2011 to recoup the costs of medical care its subscribers required after taking Avandia, and the Third Circuit held that Humana had a viable cause of action against the drug maker, under federal laws traditionally applied to Medicare.

What does this mean for you? 

The Supreme Court’s refusal to hear the Avandia case will probably complicate the work of attorneys trying to settle tort claims with Medicare Part C claimants.  We believe Medicare Part C administrators will follow Humana’s path and seek reimbursement for payments made to their enrollees, and try to enforce those rights in federal courts.  So we recommend that parties who settle personal injury cases should now try to identify claimants who received injury-related care from Medicare Part C plans.

US Airways v. McCutchen and ERISA

On the heels of the Avandia decision, the Supreme Court came out with a ruling yesterday that reinforces the rights of ERISA plans to recover costs under plans’ language. Click here to read.

The Court held that US Airways could recover costs of medical treatment for an employee who settled his personal injury claim, based on the terms of its employee benefit plan – and that unjust enrichment could not override that language.  The Supreme Court reversed the Third Circuit’s 2011 ruling, which held that US Airways was not entitled to receive full reimbursement for medical expenses it paid on behalf of the worker, because full reimbursement was unequitable.

The former employee – James McCutchen – had argued that US Airways would receive a windfall, or be unjustly enriched, if it recovered the entire amount the company’s health plan spent on his medical treatment, without any designation for the legal costs he incurred to obtain that recovery.  After his legal fees were addressed, McCutchen stood to receive less than US Airways sought to recover from him.  In yesterday’s ruling, the Supreme Court held that where a health plan’s terms contradict the doctrine of unjust enrichment, the health plan’s terms apply.

What does this mean for you?

We recommend that plaintiff’s attorneys work to identify clients who may have received injury-related care from ERISA plans, and if clients received such care, what repayment obligations could be triggered.  Parties must implement a procedure – beginning with case intake – to pinpoint healthcare reimbursement obligations as early as possible.

Stay tuned for further updates…

The post US Airways v. McCutchen, In Re: Avandia – Supreme Court Week in Review appeared first on Garretson Resolution Group.

Big news from the Supreme Court today – the Court denied cert to the In Re Avandia case, which will likely have a huge impact on the rights of Medicare Part C plans, and the obligations to report claims to those plans and reimburse them.

Click here to view all the details in today’s Client Alert.

The post U.S. Supreme Court Won’t Hear In Re: Avandia appeared first on Garretson Resolution Group.