president’spage]
A Broken
System
Who among us hasn’t experienced the frustration of
being unable to verify the
precise amount of a Medicare lien or make contact
with a live person at the Centers for
Medicare and Medicaid Services (CMS)
to address its resolution? Too often,
elderly or severely injured plaintiffs
don’t survive long enough to benefit from
a long-awaited resolution of a Medicare
lien, calling to mind the phrase “justice
delayed is justice denied.”
The Medicare Secondary Payer (MSP)
system is intended to ensure that Medicare does not pay for health care services
when a third party—for example, a group
health or workers’ compensation plan—
has primary responsibility.
But the current system is unwieldy
and impossibly sluggish. It makes it difficult to obtain reliable verification of the
amount of a Medicare lien and retains
antiquated procedures for communicating with CMS, meaning delayed justice
for plaintiffs and delayed payback of
Medicare benefits to the government.
Moreover, if a party responsible for
repaying funds to Medicare disagrees
with CMS’s calculation, there is no clear
and timely appeals process.
As a result, plaintiff lawyers sometimes must delay settlement negotiations
and routinely hold settlement funds in
escrow for many months and even years
while attempting to verify and resolve
Medicare liens. In some cases, Medicare
has demanded additional reimbursement after a case has been settled and
funds have been distributed.
A Better Way
AAJ has been working with the Medicare
Advocacy Recovery Coalition (MARC)
on a bill that would solve many of the
recurring problems with the MSP system. MARC’s broad-based membership
includes major insurers and large companies like Target. With the coalition,
AAJ is supporting the Medicare Secondary Payer Enhancement Act (MSPEA),
which will streamline and expedite MSP
procedures and provide some certainty
that will benefit all involved in resolving
third-party liability claims.
The MSPEA (H.R. 4796), which enjoys
bipartisan sponsorship, would establish a
workable procedure for parties to determine how much is owed to Medicare
before a case is settled, create a right of
appeal for parties who disagree with
CMS’s calculation of the amount due, and
establish a reasonable period of limitations. One notable feature: Plaintiffs may
calculate the amount they believe is due,
and Medicare will have 75 days to appeal
that calculation. Or plaintiffs may request
a final reimbursement amount, and CMS
will have only 60 days to respond or lose
its right to reimbursement.
On a related front, there remains considerable confusion and misinformation
concerning set-aside requirements for
third-party liability claims under §111 of
the MSP Act. Many insurers and defendants erroneously require set-asides as
a condition of payment. AAJ has drafted
an MSP fact sheet, which we believe provides the correct interpretation of §111
and related regulations.
The fact sheet and my August 2009
letter to AAJ members regarding §111
reporting requirements can be found on
AAJ’s Web site at www.justice.org/msp.
Recent statements from CMS regarding
the use of set-asides in liability cases can
be found at www.cms.hhs.gov/Mandatory
Ins Rep/Downloads/Oct2209NGHP
Transcript.pdf.
The AAJ Exchange offers two litigation
packets that provide in-depth information regarding MSP reimbursement: the
“Medicare and Medicaid Reimbursement
Claims Survival Guide” and the “ERISA
Reimbursement Claims Survival Guide.”
To purchase these packets, visit www.
justice.org/exchange, or call (800) 344-
3023 or (202) 965-3500, ext. 8615.
Past AAJ teleseminars on the topic—
“A Survival Guide to ERISA-Based Liens,”
“Medicare—Liens and Set-Asides,”
and “Preparing for Absolute Medicare
Compliance: Understanding the New
Requirements and Their Effect on Your
Practice and Set-Asides”—can be purchased by visiting www.iplaybackaaj.com
or calling (800) 241-7785.
Until the system is overhauled, these
resources can help you handle claims
involving MSP reimbursement. But it’s
clear that the system is sorely in need of
the fix the MSPEA provides. Go to www.
peopleoverprofits.org to send a message to
your congressional representative asking
him or her to cosponsor H.R. 4796.
