This article, written by two lawyers, questions whether MMSEA is “Another Y2K or Cause for Concern.”  No question it’s a provocative title however the conclusion lands exactly where we expected… yes, this is a real concern and not comparable to Y2K or the analog-to-digital broadcast TV conversion that was supposed to bring about technological catastrophe.

The conspiracy is here.

Orlando, Florida-based Lien Settlement Solutions provided a nice summary of the discussion about the confusion over liability MSA, which we addressed in our prior post about AAJ’s August letter to members of the plaintiff bar.

In this workers compensation case, the claimant, not the employer-carrier, was responsible for administering the MSA.  The E/C was supposed to provide the “seed money” for the account and purchase an annuity.  The contract held the specific amounts were not subject to change, even if the Center for Medicare and Medicaid Services (CMS) later determined a different figure.  The agreement specifically held that if CMS “determines more money is necessary for future medical expenses,” the Claimant was responsible.  Of course, the facts developed where the CMS determined a different amount and the E/C argued that it had overpaid.

The full panel of the appellate court held that the contract was unambiguous and there were no grounds to interpret or re-write the agreement to allow it to be amended.  To wit, the contact held, “neither [payment rights] can be acclerated, deferred, increased or decreased…” and “… no action by CMS concerning claimant’s eligibility or the sum of money required to be set aside for claimant’s future Medicare-covered costs will render this release void or otherwise ineffective…”

Instead, the court appeared to admonish the E/C for depositing the seed money but holding off on buying the annuity.  Of note, the date of the accident was January 1993 and the opinion was issued in June 2009, if that ultimately makes a difference under MMSEA.

The case is United States v. Paul J Harris (N.D.W.Va. 2008) and involves a plaintiff lawyer who settled a personal injury case for $25,000.  The underlying plaintiff was a Medicare beneficiary for whom CMS paid $22,550 in medical services.  Prior to settlement, Medicare agreed to accept a little over $10,000 of the $25k settlement.

But plaintiff’s counsel apparently did not distribute CMS’ money within the required sixty day period after settlement and CMS upped the amount to $11,367.78 (notably, CMS was not seeking double pay or other penalties).

On a motion to dismiss, plaintiff-attorney-turned-defendant argued that he could not be liable since he allegedly had forwarded the details of settlement to the government and they did not act.

The Court held that MSPS (1395y(b)(2)(B)(ii)) gave the government a right of recovery on CMS’ condition payments for medical services and that the government could bring suit to exercise that right.  Specifically, anyone who benefited from CMS’ payment could be liable, including any “supplier, physician, attorney, state agency or private insurer…” see section 1395y(b)(2)(B)(iii) or 42 CFR 411.24(g).

In short, this order reflects a case where the federal government is chasing after a small figure against a plaintiff lawyer because CMS did not get its full recovery of medical services payments.  Lawyers are concerned, of course, because this case illustrates that Medicare can and will do what it can to recover its “secondary” payment, even to the extent of suing lawyers…

Great read and perfect insight.  Some quick highlights of the issues:

1.  Medicare must be paid within 60 days of resolution

2.  If Plaintiff does not pay, the Defendant is on hook

3.  Plaintiff lawyer (and anyone else who benefited) may be liable

4.  MMSEA puts reporting requirements on defendants

5.  Stiff penalties (MMSEA $1000 per day)

6.  Six year limitation period for Medicare to seek reimbursement

The Memo is available on the links to the right of your screen, under “Resources.”

It should be clear that the memo is not so much directed at explaining MMSEA as it is an attempt to dispel an apparent rumor or concern about MMSEA affecting MSAs (incidentally, we agree with Mr. Tarricone: MMSEA does not affect MSAs, to the extent there was a concern here).  Admittedly, we had not heard the concern he was addressing — however, it suggests a continued misunderstanding and misapprehension of the new MMSEA requirements.

In his memo, he confirms that “attorneys for both the plaintiff and defendant are required to report certain information to [CMS].”  He then notes, however, that MMSEA’s new reporting requirements are directed at “defendants and insurers, but it does not include plaintiffs’ attorneys.”  True, but hopefully those sentences won’t be overinterpreted to suggest that plaintiff lawyers do not need to report to CMS nor that the new reporting requirements may bog down settlements.  Indeed,  plaintiff counsel should still be wary that all liens are timely assessed and resolved since greater attention is being paid in light of the new law and serious fines are contemplated.

His point in the memo, however, is that MSA situations, where the trust fund has made conditional payments for medical costs, must be reported in workers compensation claims but there is no law regarding liability claims — and that MMSEA does not change the picture.

Fair enough.  Looking ahead though, it does seem a logical next step for CMS to require mandatory MSA reporting in liability cases once the MMSEA wrinkles have been ironed out.

Hats off to Cal Biz Lit website, which noted that a CMS telephone conference discussion likewise noted that the “concern” about MSAs in light of MMSEA is off topic.

If there was a confusion or problem, it appears solved.  That said, the fact that MMSEA created this confusion is indicative of a larger, looming problem.

September 28, 2009

• Added new information to the GHP and NGHP pages regarding RRE use of Agents. For the GHP page, see the section titled New Section 111 Provisions For GHP Arrangements, found at U.S.C. 1395y(b)(7). For the NGHP page, see the section titled New Provisions For Liability Insurance (including Self-Insurance), No-Fault Insurance and Workers’ Compensation, found at 42. U.S.C. 1395y(b)(8).

September 25, 2009

• Updated the MMSEA 111- Revised- June 18, 2009 – 270/271 Health Care Eligibility Benefit Inquiry and Response; HIPAA Guidelines for Electronic Transactions – Companion Document for Mandatory Reporting GHP Entities, now dated September 24, 2009. This document is posted on the “GHP” section page.
• Updated the MMSEA 111- Revised- June 19, 2009 – 270/271 Health Care Eligibility Benefit Inquiry and Response; HIPAA Guidelines for Electronic Transactions – Companion Document for Mandatory Reporting Non-GHP Entities, now dated September 24, 2009. This document is posted on the “NGHP” section page.
• Added new information to the Reporting Do’s and Don’ts section page. See section titled E-Mail Communications/SPAM.
• Added new information to the Overview section page. See Questions About MMSEA 111.

If you research these issues on the internet, your stuck with either (1) government websites or (2) companies trying to sell their services.  Clear information is hard to find but lawyers, RRE’s, and litigants are deemed to know these rules and be in compliance.

This site is intended to monitor the developments of MMSEA and MSP as the new requirements go into effect in 2009 and 2010.  As mentioned in the Terms of Service (click on the bar above), this is not an advertisement for anything and we do not take a “side” in terms of plaintiff, defendant, insurance companies or government entities.  The site exists to chronical the developments.  I fully expect we will trip over requirements, get things wrong and watch others do the same.  So be on your guard.  But feel free to share your materials, thoughts, and experiences — anonymously or otherwise.  You can email me at cbhopkins@gmail.com.