Medicare Secondary Payer – Process and Best PracticesMedicare Secondary Payer – Process and Best Practices

October 21, 2009October 21, 2009

Roy A. Franco, Safeway Inc./ Medicare Advocacy Recovery CoalitionRoy A. Franco, Safeway Inc./ Medicare Advocacy Recovery Coalition

20102010 20202020 20302030 20402040

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$89 Trillion$89 Trillion

Medicare ActMedicare Act

Medicare Medicare Secondary PayerSecondary Payer

MSP History

19651965 20032003

1965 Medicare

Act

1980 Medicare Secondary Payer Act

2003 Medicare Modernization

Act

2007 MMSEA § 111

MMSEA - MMSEA - §111§111

Medicare Secondary Payer Act Medicare Secondary Payer Act 42 USC 42 USC §1395y(b)(2)§1395y(b)(2)

Medicare Set AsideMedicare Set Aside

§ 411.25 § 411.25 Primary payer’s notice of primary payment responsibility.Primary payer’s notice of primary payment responsibility.

If it is demonstrated to a primary payer that CMS has made a MedicareIf it is demonstrated to a primary payer that CMS has made a Medicareprimary payment for services for which the primary payer has made or primary payment for services for which the primary payer has made or should have made primary payment, it must provide notice about primary should have made primary payment, it must provide notice about primary payment responsibility and information about the underlying MSP situation payment responsibility and information about the underlying MSP situation to the entity or entities designated by CMS to receive and process that to the entity or entities designated by CMS to receive and process that information. information.

[54 FR 41734, Oct. 11, 1989; as amended at 55 FR 1820, Jan. 19, 1990; 73 FR [54 FR 41734, Oct. 11, 1989; as amended at 55 FR 1820, Jan. 19, 1990; 73 FR 9684, Feb. 22, 2008]9684, Feb. 22, 2008]

§ 411.24 (i) Recovery of conditional payments.

Special rules. (1) In the case of liability insurance settlements and disputedclaims under employer group health plans and no-fault insurance,

the following rule applies: If Medicare is not reimbursed as required by paragraph (h) of this section, the third party payer must reimburse Medicare

even though it has already reimbursed the beneficiary or other party.

Timelines

Process Time Period

Registration 5/1/2009 – 9/30/2009

Test and Production Query 7/1/2009

Claim Input File Testing 1/1/2010 – 3/31/2010

Production 2nd quarter 2010 (April 1 – June 30)

Contingent Liabilities

• Electronic Reporting Penalties

• 42 CFR 411.24(i)• Double Damages• No Safe Harbor• No Defenses• Estoppel• Shelf life• No Appeal• Finality

Interest accrues, if full refund not received in 60 days.

Accident occurs. Injuries associated with accident are paid by Medicare.

Negligent Party becomes aware of accident involving Medicare Beneficiary.

COBC gathers additional facts about the accident.

Reports accident to COBC per 42 CFR 411.25 (a).

Populates Common Working File.

COB acknowledges claim notification or sends notice to negligent party. Consent form attached.

10-14 days

Acknowledges receipt of claim and investigates conditional payments related to accident.

Reported information is submitted to the Recovery Management Accounting System to identify conditional payments.

MSP leads identified and related case claims retrieved.

MSPRC receives ReMAS Alert and applies filters to identify related claims.

ReMAS

MSPRC works with negligent party to reach agreement on accident related claims.

Settlement occurs.Parties sends settlement Documents to MSPRC.

14 days $$$MSPRC identifies $ owed to Medicare; sends demand letter.

Post demand correspondence regarding relatedness.

Send MSPRC the refund check.

If full refund not received MSPRC sends Intent to Refer letter.

If full refund not received after 120 days, case is referred to Treasury.

MSPRC case complete.

Waiver or Compromise.

MS

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MSPRC sends Conditional payment letter.

45 days

Resolved

AgreesDispute

Payment

Dispute

30 days

Updated Conditional Payment Letter is sent.

30 days

30 days

Duplication without express written consent of MARC is prohibited

• Waiver of the private cause of action under 42 U.S.C. 1395y(b)(3)(A);

• Identify injuries related to the tort with applicable ICD-9 codes;

• Settlement may impact plaintiff’s future benefits, and claimant has the right to seek waiver, compromise and otherwise reduce the amount sought by Medicare based upon costs to procure the settlement;

• Cooperation Clause / survivability of consent form;

• Affirmative obligation requiring plaintiff to provide copies of any settlement agreements or other communications plaintiff has with Medicare on case;

• Statement that the plan has exhausted all benefits, listing the TPOC date and amount.

• How disbursements are to be handled.

Pay Attention to the Settlement Release

Conditional Payments – 42 USC §1395y(b)(2)(B)

Allocation Challenges

Medicare Payments for

item or service

PP has notmade or cannot

reasonably be expected to make

100% Zero reduction

for PP fault

Zinman v. Shalala

Hadden v. U.S.

Bar

s to

S

ettle

men

t

Damages

Medical Specials All Other Damages

SETTLEMENT

Judicial Determination

Liability Medicare Set Asides• No Regulations

• No Bulletins / Alerts

• No safe harbor – applying Worker’s Compensation guidelines

• Statutory basis

– MSP provisions say Medicare is always secondary to WC and other insurance

– No payment may be made under Medicare for covered items or services to the extent that payment has been made, or can reasonably be expected to be made.

– Medicare’s authority to review liability settlements arises under same statute as its authority to review Worker’s Compensation settlements (See 42 USC §§1395y(b)(5)(d), 1395y(b)(6)

$20,000$80,000 Past

Medical ExpenseNet to

Plaintiff ?

$100,000 Settlement Example

• Legislature• Regulatory• Common Law –

– Hadden v. U.S.

• To Join:– Visit http://www.marccoalition.com– Contact Susan Murdock – susan@murdockinc.com

• Financial contributions needed!

Medicare Advocacy Recovery Coalition

Questions and Answers