Medicare Secondary Payer – Process and Best Practices October 21, 2009

1. Medicare Secondary Payer – Process and Best Practices October 21, 2009 Roy A. Franco, Safeway Inc./ Medicare Advocacy Recovery Coalition

2. Tax Revenue Consumed By Medicare & Social Security 61% 49% $89 Trillion 27% 13% 2040 2020 2030 2010

3. MSP History 1980 Medicare Secondary Payer Act 1965 2003 2007 MMSEA § 111 Medicare Secondary Payer 2003 Medicare Modernization Act Medicare Act 1965 Medicare Act

4. MMSEA - §111 § 411.25 Primary payer’s notice of primary payment responsibility. If it is demonstrated to a primary payer that CMS has made a Medicare primary payment for services for which the primary payer has made or should have made primary payment, it must provide notice about primary payment responsibility and information about the underlying MSP situation to the entity or entities designated by CMS to receive and process that information. [54 FR 41734, Oct. 11, 1989; as amended at 55 FR 1820, Jan. 19, 1990; 73 FR 9684, Feb. 22, 2008] § 411.24 (i) Recovery of conditional payments. Special rules. (1) In the case of liability insurance settlements and disputed claims 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. Medicare Secondary Payer Act 42 USC §1395y(b)(2) Medicare Set Aside

5. Timelines

6. Contingent Liabilities • Electronic Reporting Penalties • 42 CFR 411.24(i) • Double Damages • No Safe Harbor • No Defenses • Estoppel • Shelf life • No Appeal • Finality

7. Accident occurs. Reports accident to COBC per 42 CFR 411.25 (a). Populates Common Working File. Injuries associated with accident are paid by Medicare. Negligent Party becomes aware of accident involving Medicare Beneficiary. 10-14 days COBC gathers additional facts about the accident. MSP leads identified and related case claims retrieved. Parties sends settlement Documents to MSPRC. Settlement occurs. 30 days 45 days COB acknowledges claim notification or sends notice to negligent party. Consent form attached. $$$ 14 days 30 days MSP CONDITIONAL PAYMENTS LIFECYCLE Updated Conditional Payment Letter is sent. MSPRC works with negligent party to reach agreement on accident related claims. MSPRC sends Conditional payment letter. MSPRC receives ReMAS Alert and applies filters to identify related claims. 30 days MSPRC identifies $ owed to Medicare; sends demand letter. Payment Dispute Agrees Acknowledges receipt of claim and investigates conditional payments related to accident. ReMAS Send MSPRC the refund check. MSPRC case complete. Reported information is submitted to the Recovery Management Accounting System to identify conditional payments. Post demand correspondence regarding relatedness. Resolved If full refund not received MSPRC sends Intent to Refer letter. Dispute Interest accrues, if full refund not received in 60 days. If full refund not received after 120 days, case is referred to Treasury. Waiver or Compromise. Duplication without express written consent of MARC is prohibited

8. 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

9. Allocation Challenges Conditional Payments – 42 USC §1395y(b)(2)(B) Damages Bars to Settlement Judicial Determination SETTLEMENT Zinman v. Shalala Hadden v. U.S. Medical Specials All Other Damages

10. 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)

11. $100,000 Settlement Example $20,000 $80,000 Past Medical Expense Net to Plaintiff ?

12. 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

13. Questions and Answers