How to Spot Issues and Consider
Medicare's Interests
settling parties are required to consider
Medicare's interests to avoid shifting any
medical responsibility from a primary
payer to Medicare. This obligation has
been around since 1980, when the
Medicare Secondary Payer (MSP) Act
Centers for Medicare & Medicaid Services
(CMS) have focused mostly on workers'
compensation settlements, which have
more clearly defined obligations for past
and ongoing medical payments. But since
then, the possibility of needing a Liability
Medicare Set-Aside (LMSA) has seemed
more of a myth than a reality. CMS did not
formally acknowledge the LMSA until a
2009 update to the Medicare Secondary
Payer Manual and a September 29, 2011,
CMS Memorandum.
is a two-step analysis of (1) medical
expenses already paid by Medicare
("conditional payments"), and (2) future
medical expenses which Medicare may pay
(commonly referred to under the catch-all
term "MSA").
payer or anyone who receives payment,
directly or indirectly, from a primary
payer. This opens liability to not only the
insurance carrier, but also to the Medicare
beneficiary, the plaintiff's attorney and even
medical providers. Medicare may seek
reimbursement for conditional payment
liens, including double damages, taking
priority over any other primary payers.
by the terms of settlement.
CMS may seek reimbursement or
pursue subrogation when one of two things
happens: (1) the medical portion of the claim
settles; or (2) a final legal adjudication is
reached establishing liability of a primary
payer. So until the parties either settle the
medical liability or resolve the matter in
court, there can technically be no enforce-
able Medicare lien.
SCHIP Extension Act of 2007 (MMSEA)
requirements for claims involving Medicare
beneficiaries, including notification of
how the claim is resolved. Once a claim
is reported, Medicare can track related
medical treatment by CPT medical codes
submitted by medical providers seeking
payment. If a reported claim is settled
without considering Medicare's interests,
particularly with regard to conditional
payments, then Medicare will eventually
find out and could seek reimbursement.
The current penalty for failure to report
under Section 111 is $1,000 per day,
per claim. But regardless of mandatory
reporting, the bottom line is the stakes are
just too high not to consider Medicare's
interests at all.
Payments?
Medicare has already made any
payment, conditioned upon the right to
reimbursement, for medical services
allegedly related to the underlying injury,
for which the defendant may be deemed
Certified, regulated by the International Commission on Health
Care Certification, and regularly speaks on the topic of Medicare
Secondary Payer issues in the context of both liability and workers'
compensation settlements. He is licensed to practice law in both
North Carolina and South Carolina.
P.O. Box 19207
4700 Falls of Neuse Road
Suite 450
Raleigh, North Carolina (NC) 27619-9207
919.873.1814 Fax
teaguecampbell.com