These articles have been published in "The Advocate", a monthly publication of the Arizona Association for Justice/Arizona Trial Lawyers Association, October and November 2010 issues,
@2010 by Steven J. Bruzonsky, Esq.
MEDICARE LIEN CHECKLIST, PART 1
(This is the first part of a two part series which gives you a checklist on how to handle Medicare liens.)
Go to each of the above websites and familiarize yourself with each website.
Whenever you fax and/or submit documents to Medicare, be sure to write client’s name and Medicare identification number at the top right of each document that you send, including all forms and letters. Medicare uses that number to file documents, and absent that number don’t be surprised if the document is misplaced or returned to you.
Be sure that when you report insurance (or self-insurance) coverages when the Medicare lien claim is opened (see Step 2 below), and when you submit the "Final Settlement Detail Document" (see Step 4 below) reporting settlement funds received, that you report not only liability, underinsured and uninsured, but also all medical payments, personal injury protection and no fault coverages. Pursuant to the Medicare Mandatory Insurance Reporting [Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA), which amended the Medicare MSP (Medicare Secondary Payer) statute, 42 U.S.C. § 1395y(b), Medicare has enacted tight reporting requirements with substantial penalties for noncompliance. Insurers now routinely provide injured claimants’ SSNs and DOBs and whether they currently receive or in the near future may become eligible for Medicare benefits, as well as the attorney’s TIN (Taxpayer Identification Number) and/or SSN (Social Security Number) for all of these coverages. What can happen if you fail to report all of this coverage information to Medicare? An example is that the attorney reports only the liability settlement to Medicare, but doesn’t report the medical payments settlement. Medicare gives the procurement cost reduction, the attorney pays the Medicare lien and disburses the remaining settlement funds. Then the medical payments insurer reports the medical payments coverage and settlement. So the MSPRC reopens your liability lien file, adjusts the procurement cost reduction appropriately (procurement cost reduction is only given on the amount of the lien above the funds received from medical payments), and the MSRPC, which has your Taxpayer Identification Number or Social Security Number reported by the insurer, then withholds the lien due plus interest and penalty from your federal income tax return. The MSRPC can and has done this withholding from insurers’ tax returns as well.
Wrongful Death Claims by Decedent’s Survivor(s): In Gartin v. St. Joseph’s Hospital, 156 Ariz. 32, 749 P.2d 941, in a Wrongful Death case brought by the decedent’s survivors, the Court held that a hospital lien didn’t apply to the Wrongful Death settlement because the decedent’s medical expenses are not recoverable to the survivors under the Arizona Wrongful Death Act. The Arizona Wrongful Death statutes, A.R.S. § 12-611 to § 12-613, do not permit a person’s survivors to assert the claims and rights that the decedent has at time of death or to recover the decedent’s medical expenses. However, if there is no surviving spouse, children or parents, and the estate’s personal representative brings a Wrongful Death action on behalf of the estate, then damages are limited to financial including the decedent’s medical bills. The Medicare Secondary Payer (MSP) Manual, Chapter 7, § 184.108.40.206.1 states that "When a liability insurance payment is made pursuant to a wrongful death action, Medicare may recover from the payment only if the State statute permits recovery of these medical expenses." However, insurance defense attorneys are often very concerned about Medicare liens, and on their advise, insurers may insist on including Medicare as a payee on the settlement check or refuse to pay the settlement until they receive proof of the amount of the Medicare lien or that Medicare has waived the lien. My advise is to report the Wrongful Death survivor(s)’ claim to Medicare early on and obtain Medicare’s written agreement that they claim no lien interest in the Wrongful Death settlement.
(The second part will be in next issue.)
MEDICARE LIEN CHECKLIST, PART 2
(This is the second part of a two part series, continuing from the prior issue, which gives you a checklist on how to handle Medicare liens)
Check off each step below as its completed.
Step 1: Obtaining Claim Information from http://my.medicare.gov/:
Go on the web to http://my.medicare.gov/ . Register as a representative of the client.
Enter the necessary information, including setting up your User Name and Password. Give them your email address (not the client’s). In most cases in which you represent a Medicare insured, you will not be able to sign into this website and obtain up to date info on claims and payments by Medicare during the prior 15 months. You can periodically check to update this information.
Step 2: Initiating the Medicare Lien Process:
A. Contact Medicare to start the lien process by calling the Medicare Coordination of Benefits Call Center (1-800-999-1118). Have handy your client’s personal and accident insurance information which is necessary to open the Medicare lien file: Medicare identification number (usually the client’s social security number followed by an A, or sometimes a B, but check your client’s Medicare card or the Medicare # listed in medical records); date of birth, address and phone; date of accident;and information regarding liability/UM/UIM carriers, etc.
Keep in mind that under the Medicare Mandatory Insurance Reporting [Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA), which amended the Medicare MSP (Medicare Secondary Payer) statute, 42 U.S.C. § 1395y(b)], Medicare has enacted tight reporting with substantial penalties for noncompliance. Insurers now routinely provide injured claimants’ SSNs and DOBs and whether they currently receive or in the near future may become eligible for Medicare benefits to Medicare for all liability, underinsured, uninsured, no fault, personal injury protection, and medical payments claims. Be sure to provide all of this information when you initially report the lien claim to Medicare.
Once you have called in the Medicare lien claim, Medicare’s standard procedure is to promptly set up a Medicare lien file, and then to send you within 10 days the "Medicare Secondary Payer Development" questionnaire and also the most current "Proof of Representation" or "Consent to Release" form which must be signed by your client; and Medicare’s system now sets a deadline to mail you a Conditional Payor Letter (lien itemization) that is 65 days from the date you initially contacted Medicare to start the lien process (plus another 12 days for mailing).
B. Complete and sign (client signature not necessary) the "Medicare Secondary Payer Development" questionnaire. Keep copy in your file, and mail original to:
Medicare – Coordination of Benefits
Medicare Claims Investigation Project
P.O. Box 33847
Detroit, MI 48232-5847
C. Medicare has two release of information forms, "Proof of Representation" and "Consent to Release Form". When a client is attorney represented, the "Proof of Representation" form is technically the better form to use and have the client sign and then submit to the MSPRC, because this form permits the attorney to represent and act on behalf of the client. Complete, and have client sign, the "Proof of Representation" form. Keep copy in your file, and mail original to:
Medicare Secondary Payer Recovery Committee
P.O. Box 33828
Detroit, Michigan 48232-5828
However, if the claim also involved a related Worker’s Compensation claim, then mail the original to:
Medicare Secondary Payer Recovery Committee
MSPRC Workers’ Compensation
P.O. Box 33831
Detroit, Michigan 48232-5831
All further phone calls and correspondence now go to the above.
D. Inform Medicare of Accident vs Non-Accident Medical Care and Claims Paid:
I recommend that you fax and mail a letter to the MSPRC briefly explaining your client’s accident-related injuries, accident-related healthcare providers, what care post-accident isn’t accident-related, any custoff date for accident-related care, etc. Also, enclose a printout from
http://my.medicare.gov/ (see Step 1 above), circle claims paid which are not accident-related, and note that you have done this. Have handy your client’s personal and accident information (see Step 2A above)
Step 3: Suspense Your Calender:
Beware: The MSRPC can have long hold times. Use a speakerphone or headset and do other work while you or your staff are waiting for a live MSRPC person to get on the line. Suspense your calendar for the following:
(1) Suspense your calendar so that 10 days after you have completed all of the above, to call the MSPRC (866-677-7220) and verify that they have received all of the above documents, that the system is set to issue the Conditional Payor Letter (lien itemization) in 65 days (plus another 12 days for mailing), and that the information in your above letter (accident vs non-accident medical expenses) has also or is being entered into the system so that the lien itemization hopefully will contain only accident-related medical benefits paid by Medicare.
(2) Suspense your calendar so that every time you send a document to the MSPRC, you call them in 10 days to ensure the document is received and filed, and that any action which you have requested has been ordered.
(3) Suspense your calendar so that 78 days after you have completed all of the above, that you call the MSPRC (866-677-7220) if you have yet to receive the Conditional Payor Letter. If the Conditional Payor Letter is already done and in the system, they can tell you the total lien amount and if necessary, enter into the system to mail the Conditional Payor Letter to you, which you should then receive within 12 days. If they missed the 65 days (plus 12 days for mailing) deadline, request that they transfer you to the "Q" so that a representative will talk with you and enter the information so that the system will generate a Conditional Payer Letter thereafter within 7 days (add 12 days for mailing). At this time, be sure that they read your previous letter and enter information for accident vs non-accident medical expenses. Then suspense your calendar to call the MSRPC again if you haven’t received the Conditional Payor Letter within another 20 days.
Step 4: Obtaining the Final Demand Letter (final Medicare lien):
When you are close to settling or obtaining judgment of your client’s tort claim, doublecheck the last Conditional Payment Letter which you have received and/or claims paid as shown at http://my.medicare.gov/ (Step 1 above), and if the lien itemization includes non-accident medical expenses, fax and mail a letter to the MSRPC explaining this (see Step 2D above) (suspense your calendar to call the MSRPC in 10 days to ensure they received and are processing this).
Once you have ensured that the original or revised and reissued Conditional Payor Letter is correct: Complete the "Final Settlement Detail Document" concerning all insurance settlements including self-insured, liability, underinsured, uninsured, medical payments, personal injury protection or other no fault; attorney’s fees and costs; etc. You can obtain the "Final Settlement Detail Document" at http://www.msprc.info/index.cfm?content=includes/toolkits/attorney_nghp.
When Medicare calculates the final lien amount, Medicare, per the MSP (Medicare Secondary Payor) regulations, will give a procurement cost reduction and reduce the lien by the ratio of attorney’s fees and costs divided by the total settlement funds. However, the lien will not be reduced for procurement costs to the extent that your client received any medical payments, personal injury protection or no fault settlements, because under federal law and MSP regulations, such coverages are primary to Medicare.
If you desire to request that Medicare provide compromise/waiver of the Medicare lien more than the procurement cost reduction, do this by separate letter and explain your basis in detail, perhaps with some brief supporting documents. If this request for compromise/waiver of more than the procurement cost is made, since the MSPRC only has authority for the procurement cost reduction, they will forward the file to the regional office for handling:
90 Seventh Street, Ste 5-300 5W)
San Francisco, CA 94103-6706
My understanding is that there is no time deadline for the regional office to complete its review and issue its Final Demand Letter. One of my cases recently went through this process and it took about 60 days once my request was made for compromise/waiver of more than the procurement cost reduction.
Step 5: Payment:
The Final Demand Letter will include:
A. Lien itemization
B. The amount you are required to repay Medicare (after deduction of procurement costs)
C. Payment of the above amount is due within sixty (60) calender days from the date of the Demand Letter, and if unpaid within that time, then a (high) rate of interest will be specified on any remaining balance from the date of the Demand Letter
D. If you disagree with the amount demanded, you have a right to Appeal by sending a letter explaining your reasons therefor (E.G., some expenses aren’t accident-related, reasons why lien should be further compromised or waived) which must be filed within 120 days. (One of my cases recently went through this process and it took about 60 days once my request was made.)
E. That if in future you receive additional money from this liability recovery or any other liability recovery (Medicare defines "liability" to include first party Uninsured and Underinsured Motorist), you must notify Medicare (because Medicare has lien rights against each settlement as they occur) (42 C.F.R. §§ 411.120–411.126 cover appeal and hearing procedures and Administrative review if you disagree with the CMS Medicare lien reduction determination.)