Protecting Medicare’s Interests in Liability & No-Fault Cases
Medicare’s future interests must be considered in Liability and No-Fault Cases. Pursuant to the Medicare Secondary Payer Statute (MSP) 42 U.S.C Section 1395 y(b) (2), Medicare may not make payment when payment has been made or can reasonably be expected to be made under a Liability or No-Fault Insurance plan. The Centers for Medicare and Medicaid Services (CMS) is the government agency authorized to enforce Medicare’s Secondary Payor status. On July 23, 2001, the CMS Central Office issued its first Directive Memorandum to the CMS Regional Offices. The “Patel” Memo, as it became known, stated that Medicare’s interests must be considered in all Workers’ Compensation settlements involving Medicare beneficiaries. The Memo further stated that Medicare’s interests could be protected by establishing a “Medicare Set-Aside.” CMS has since issued a series of Directive Memos that govern Workers’ Compensation MSA projections and submissions.
The Medicare Administrative Contractor (MAC) has stated that as of October 1, 2017, they will deny payment for treatment that should have been paid from a Liability (LMSA) or No-Fault (NFMSA) Medicare Set-Aside.
The reporting portal was also updated to allow the parties to report the amount of the settlement dollars that are allocated for future injury-related medical care.
Practice Tip: if an allocation is not made at the time of settlement for future injury-related care that would otherwise be paid by Medicare, Medicare may consider the entire amount of the settlement as compensation for future injury-related medical costs.
However, even though Medicare has signaled that they may deny payment for treatment that they deemed should have been paid from an LMSA or NFMSA, and the same section of the MSP applies to both Workers’ Compensation and Liability/no-fault cases, there has been little guidance from Medicare regarding how the amount to be “Set-Aside” should be calculated for Liability Medicare Set-Asides and NFMSAs.
Allocation of Liability & No-Fault MSA Accounts
The only formal guidance CMS has issued regarding LMSAs and NFMSA is the September 30, 2011 Memo from Charlotte Benson. The Memo states: “Where the beneficiary’s treating physician certifies in writing that treatment for the alleged injury related to the Liability insurance (including self-insurance) “settlement” has been completed as of the date of the “settlement,” and that future medical items and/or services for that injury will not be required, Medicare considers its interest, with respect to future medicals for that particular “settlement,” satisfied. If the beneficiary receives additional “settlements” related to the underlying injury or illness, he/she must obtain a separate physician certification for those additional “settlements.”
However, even though MSP statute compliance requires that the parties to a Liability or no-fault settlement consider Medicare’s future interests, CMS has not issued any guidance regarding how Medicare’s future interests should be protected when the beneficiary needs future medical treatment. Unlike the Workers’ Compensation arena where the carrier has ongoing Liability for the payment of future medical benefits, the Liability and no-fault arena brings complicated issues such as policy limits and issues of comparative fault. This creates quite the quandary for attorneys trying to balance Medicare’s interests with those of their clients.
Professional Administration of Liability and No-Fault MSA Accounts
MSA Meds can Professionally Administer liability MSAs and NFMSAs using the guidelines already established for WCMSAs. All bills are reviewed to make sure they are causally related to the injury and covered by Medicare. All record-keeping is maintained and annual accountings are prepared and used to document the file when the MSA has been reviewed by CMS. MSA Meds provides the documentation necessary to prove to Medicare that settlement funds were properly spent and avoids Medicare’s denial of treatment when funds are exhausted.
Implications of Not Protecting Medicare’s Interests in a Liability Case
Medicare has begun denying payment of medical treatment where a settlement resulted in the creation of funds that should have been spent on the treatment. This places the burden of showing that settlement funds were properly set aside and spent on Medicare beneficiaries and requires Beneficiaries to appeal Medicare’s denial of payment in a 5 step process. This process is lengthy and onerous and it will be difficult for most Beneficiaries to obtain a favorable outcome on their own.
Click here to learn more about the Medicare Appeals Process.
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