PRESENTED BY:
Tim Doherty
SRS – Specialty Risk Services
PO Box 5340
Manchester, New Hampshire 03108
(603) 222-9318
Elizabeth Hurley, Esq.
GETMAN,SCHULTHESS & STEERE, P.A.
Three Executive Park Drive – Suite 9
Bedford, New Hampshire 03101
(603) 634-4300
MEDICARE,
MEDICAID & SCHIP
EXTENSION ACT OF 2007
(MMSEA)
Legislative Intent:
Mandatory reporting requirements to aid in
enforcement of Medicare Secondary Payer
Act
HISTORY OF MSP
 Enacted
1965
 Clarified Secondary vs. Primary
Payer Status
 Workers Compensation Cases –
W/C – Primary Payer
HISTORY OF MSP
 Amended
in 1980 to Include Liability
Policies
 Medicare Secondary to Liability
Insurance
Road Map for MMSEA Section 111
 Identification:
Did the Plaintiff receive
Medicare benefits?
Road Map for MMSEA Section 111
 Notification:
claim
Medicare – we have a
Road Map for MMSEA Section 111
 Reimbursement:
How much does
Medicare get paid back?
Road Map for MMSEA Section 111
 Reporting:
We have settlement or
judgment – now what?
MMSEA Applies to Primary Payers
Primary Payers
“any entity that is or was required or
responsible to make payment with
respect to an item or service (or any
portion thereof) under a primary plan.”
MMSEA Applies to Primary Payers
Primary Payers Responsibility:
 Judgment
 Payment Pursuant to a Compromise
 Settlement
 Award
 Contractual Obligation
Who Must Contact Medicare?
Primary Payer = Responsible Reporting
Entity (RRE)
 Liability Insurance Plan
 No Fault Insurer
 Workers Compensation Plan
 Self-Insurers
 Third-Party Administrators
 Group Health Plans
IDENTIFICATION
CMS QUERY SYSTEM
Method by which RRE’s can determine
claimant’s Medicare entitlement status
 RRE submits claimant’s name, SSN, date of
birth & gender
 Confirms entitlement status only – not dates or
basis of entitlement
 Written verification of entitlement status provided
 Submission of query alone does not satisfy
reporting requirements

http://www.cms.gov/MandatoryIns
Rep/Downloads/NGHPregistration
Alert.pdf
Direct Data Entry option for
occasional reporters, The
registration and outline fully
explain this reporting option,
IDENTIFICATION
HOW TO ACQUIRE THE NECESSARY
INFORMATION
AUTHORIZATION FOR RELEASE OF
RECORDS
 DISCOVERY REQUESTS

Notification
Identification
Send release as soon as
claim is made
Notification

Mail Consent to Release to MSPRC at:
MSPRC Auto/Liability
[check address as it changes]
P.O. Box 33828
Detroit, MI 48232-0998
Fax: (734) 957-0998
Identification
SAMPLE INTERROGATORIES
1.
Please provide the following information about yourself:
(a)
Date of birth;
(b)
Social Security Number or your health insurance claim number (“HICN”);
(c)
Gender.
2.
Are you currently a Medicare beneficiary? If so, Please identify any and all amounts that have been
paid by Medicare in satisfaction of medical expenses from any healthcare provider involved in the
treatment of your injuries you are claiming in this lawsuit. Please outline any communications that
you have had with Medicare and specifically any Medicare secondary payer contractor regarding
their lien.
3.
If you are not currently a Medicare beneficiary, do you anticipate becoming one during the pendency
of this litigation either due to your age or applying for Social Security Benefits? If so, please be sure
to supplement your discovery responses accordingly.
The information outlined in the above interrogatories is necessary so that the defendant or any insurer of
the defendant can comply with the Medicare regulations. See 42 U.S.C. 1395(y)(b)(8) otherwise known
as Medicare, Medicaid and SCHIP Extension Act of 2007 (“MMSEA”), Section 111.
Identification
SAMPLE INTERROGATORIES
WRONGFUL DEATH CASES:
1. Please provide the following information about the decedent:
(a)
Date of birth;
(b)
Social Security Number or their health insurance claim number
(“HICN”);
(c)
Gender.
2.
Was your decedent a Medicare beneficiary? If so, please identify any and all amounts
paid by Medicare in satisfaction of medical expenses for any healthcare provider
involved in the treatment of your decedent for which are being claimed in conjunction
with this lawsuit.
The information outlined in the above interrogatories is necessary so that
the defendant or any insurer of the defendant can comply with the Medicare
regulations. See 42 U.S.C. 1395(y)(b)(8) otherwise known as Medicare, Medicaid
and SCHIP Extension Act of 2007 (“MMSEA”), Section 111.
Identification
Sample Request for Admissions:
REQUEST FOR ADMISSION NO. 1: Admit that on ____________
[here insert the date of the accident in question] you were not a
Medicare beneficiary and not entitled to Medicare.
ADMIT OR DENY:
REQUEST FOR ADMISSION NO. 2: Admit that since___________
[here insert the date of the accident in question] you have not become
a Medicare beneficiary and are not presently entitled to receive benefits
from Medicare.
ADMIT OR DENY:
Identification
SAMPLE REQUEST FOR PRODUCTION
Please produce copies of any and all medical expenses or bills that you
are claiming in this case with an outline of the specific amounts that have
been paid by Medicare. Please also produce any conditional payment
summary that you have been provided through Medicare or the Medicare
secondary payer contractor. If you do not have this document, please
complete and return the attached CMS/MSPRC Consent to Release
Authorization.
Identification
CMS QUERY SYSTEM
 RREs
can Query 1 x Month
 Each Query can have Multiple Claimants
Identification
CMS QUERY SYSTEM – Pros & Cons
 Insurer
(RRE) no longer has to rely on
opposing counsel to determine
claimant/plaintiff’s Medicare status
 Insurer (RRE) is now directly responsible
for determining Medicare eligibility status by
submitting inquiry to CMS
Notification








Medicare’s Coordination of Benefits Contractor
(COBC) 1-800-999-1118
Date of Birth
Health Insurance Claim Number (HICN)
Type of Insurance (liability, no-fault, workers’ comp)
Date of Incident
Plaintiff’s Full Name, Address and Telephone No.
Opposing Counsel’s Name, Address and Telephone
No.
RRE’s address, Telephone No., Agent and Policy No.
List of all Claims using ICD-9 categories
Notification
 COBC
opens a potential recovery case and
refers matter to second contractor – the
MSP Recovery Contractor (MSPRC)
 MSPRC
issues a “MSP Rights and
Responsibilities Letter”
 New
Rules: MSPRC might not work
directly with RREs or their counsel
Reimbursement
How Much Does Medicare Get Paid Back?
 Medicare
sends conditional payment letter
from CMS/MSPRC
 This is Initial Demand
Reimbursement
NEGOTOATING THE LIEN:
 Write letter to plaintiff’s counsel to send to
CMS re: why treatment is not related.
 Provide IME Reports.
 Outline pre-existing conditions with copies
of selected key records.
Reimbursement
NEGOTIATING THE LIEN:
 Procurement Cost
– 42 C.F.R 411.37 provides for the reduction
based on “procurement costs” or plaintiff’s
attorney fees and costs.
costs are incurred because the claim is disputed;
and
 costs are borne by the party against which CMS
seeks to recover.

Reimbursement
An Example Calculation of a Recovery Situation with
Represented
Medicare Claimant in a Liability Case


Facts: Settlement of $20,000.00. Attorney’s
contingency arrangement of 30% with actual cost of
$500. Medicare is asserting a lien of $5,000.00
Attorney’s fees are $6,000.00 ($20,000 x 30%) plus
$500.00 provides for total “Cost of Procurement” of
$6,500.00
Reimbursement

$6,500.00 divided by $20,000.00 = .325, which
is the proportional share of the fees and costs.

.325 x $5,000.00 Medicare Lien = $1,625.00,
which is Medicare’s proportional amount of
procurement costs.

Subtract $1,625.00 from Medicare’s original lien
amount of $5,000.00; which equals $3,375.00.

Medicare’s recovery is $3,375.00 from the
settlement proceeds of $20,000.00
Reimbursement
NEGOTIATING THE LIEN:
“Hardship Exceptions”
waiver of lien § 1870(c)
The plaintiff has the opportunity to apply for
a hardship waiver. Medicare can issue a
full or partial waiver, or deny the waiver
completely
Reimbursement
Hardship Waiver
50.6.5.1 – Examples of Financial Hardship
(Rev. 1, 10-01-03)

The demonstrated beneficiary income and
resources are at a poverty level standard, such as
being in an SSI pay status.

Unforeseen severe financial circumstance existing
at the time Medicare’s claim comes into existence
so long as and no other financial resources to
meet this legal obligation.
Reimbursement
50.6.5.2 – Recovery Would Be Against Equity and Good
Conscience (Rev. 1, 10-01-03)

The degree to which the beneficiary contributed to
causing the overpayment;
Reimbursement
 The
degree to which Medicare and/or its
contractors contributed to causing the
overpayment;
Reimbursement
 The
degree to which recovery or
adjustment would cause undue
hardship for the beneficiary;
Reimbursement
 Whether
the beneficiary would be
unjustly enriched by a waiver or
adjustment of recovery; and
Reimbursement
 Whether
the beneficiary changed their
position to their material detriment as a
result of receiving the overpayment or
as a result of relying on erroneous
information supplied to the beneficiary
by Medicare.
 Hadden
v. U.S.
Slip Copy, 2009 WL 2423114
W.D.Ky.,2009
 Plaintiff
filed suit to have lien amount
reduced. Suit Dismissed.
Reimbursement
Final Demand Letter
This is the actual amount of the lien
“We have determined that you are
required to repay the Medicare Program
$XXX.xx.”
Reimbursement
Funds Distribution Strategies
 Await
final conditional payment statement,
then issue a separate check directly to
Medicare, with the balance to the plaintiff.
 Hold
the funds in trust until the Medicare
issue can be resolved
Reimbursement
Almost Final Letter will State:
“We have received check number XXXX in
the amount of $XXX.xx
Reimbursement
Final Letter will State:
“The amount has been applied to outstanding
debt due Medicare. The principal amount
of the debt and interest (if applicable) has
been reduced to zero and our file is being
closed.”
Reimbursement
MEDICARE SET-ASIDE (“MSA”) ALLOCATION
May be needed when settling future medical
benefits for individuals who are or will become
entitled to Medicare
 Applies when there is foreseeable, ongoing
medical treatment related to settled claim
 Future Medicare entitlement cannot be waived by
claimant
 Not needed if medicals are left open, i.e. workers
comp.

Reimbursement
CALCULATING AMOUNT OF MSA
 Amount based on reasonable projection of
future medical costs related to injury that
would otherwise be covered by Medicare
 Based on amount that Medicare would
ordinarily pay (considering deductibles &
co-pays)
 Based on life expectancy & rated age of
beneficiary
Reimbursement
MSA OPTIONS

Self-Administered Accounts
– For small amounts
– Plaintiff administers following same accounting rules as a professional administrator

Custodial Accounts
– Larger Amounts
– Administered by a professional custodian for a fee

Medicare Set Aside Trust
– Plaintiff receiving means-tested public benefits (SSDI, Food Stamps, Veterans
Benefits or Section 8 Housing.
– A formal trust with a trustee

Pooled Trust

– Plaintiff receives means-tested public benefits
– Operated by a non-profit
– Pools with other funds for investment purposes.
Structured Settlements
Reimbursement
Medicare Set-Asides & Future Medicals

Payment of future medicals and approval of Medicare SetAsides (MSA) are required for workers’ comp claims:
Total Payment Obligation to Claimant (TPOC)

Section 111 does not specifically require non-WC liability
carriers to provide for ORMs or establish MSAs

Medicare expects attorneys to disclose future medicals to
CMS and may require MSAs in future and can seek claw
backs
Proposed Release / Settlement Agreement
Language
 acknowledges and stipulates that claimant
has consulted with physician and avows
that there are no expected future medical
expenses associated with this accident.
Reimbursement

parties have made reasonable efforts to
recognize and protect the interests of
Medicare pertaining to its conditional
payments and possible future payments
of medical expenses
Reimbursement

agrees to indemnify, defend and hold
defendant, carrier and their attorneys
harmless from any future medical,
Social Security, Medicaid, Medicare or
contract government health insurance
fund claims
Reimbursement

agree that the amount of the final
Medicare lien as stated in the Final
Demand Letter, which shall be provided
to the defense, will be paid in full out of
the proceeds of this settlement and the
remainder of the settlement funds paid
in accordance with the instructions of
counsel.
Reimbursement

The defense shall then be provided with
a copy of Medicare’s Final Discharge
Letter
Reimbursement
Proposed Release Language
SIMPLE MSA
Same language as above PLUS:
- avows
that claimant has consulted with her
health care providers relative to the need for
future care and treatment for injuries related to the
incident and the expected costs for same
Reimbursement
- avows that he
will establish a selfadministered Medicare Set-Aside
account funded by proceeds from this
settlement in the amount of $x,xxx,
which is a reasonable amount for
payment of certain future medical
expenses related to the incident.
Reimbursement
- avows that this amount will be used
exclusively for payments that Medicare
might otherwise be called upon to pay
in the absence of a Medicare Set-Aside.
Reimbursement
- avows that the defendant and its carrier
have relied in good faith on the
representations of claimant and his
counsel as to his agreement to honor
the obligations herein and adhere to the
provisions of The Medicare Secondary
Payer Act, 42 U.S.C. sec. 1395y.
Reimbursement
SUBSTANTIAL MSA
Same language as above PLUS:
(a)
(b)
(c)
Claimant will establish a dedicated account in which
settlement funds in that amount shall be deposited;
Claimant has attempted, through a Certified Medicare SetAside Consultant or otherwise, to seek review and
approval of that amount and account, and to apprise the
defense of any decision, or none, of Medicare regarding
the Medicare Set-Aside plan set forth or referenced
herein;
Medicare Set-Aside Account will be funded by the
defense
Reimbursement
The Medicare Set Aside Account must have restrictions
in place such that withdrawals can only be made for
purposes of medical care that would have otherwise
been paid for by Medicare.
AND/OR
A strict accounting requirement must be in place in case
of future action by Medicare.
Reporting
Reporting – When to Report…
Section 111 Requires “reporting” of
Settlements, Judgments, Awards, or other
Payments by RREs
Reporting
Triggering Event
 “Payment”
= Obligation to repay lien arises
when payment to claimant has been made.
 “TPOC”
Claimant
= Total Payment Obligations to
Reporting
Date Reporting Requirement Commenced
0ctober 1, 2010
Reporting
THRESHOLDS:
There are thresholds for Reporting General Liability
Claims under Section 111 that impact when a
settlement is required to be reported.
No need to Report if:
-Less than $5,000.00 between January 1, 2011 and December
31, 2011
-Less than $2,000 between January 1, 2012 and December 31,
2012;
–Less than $600.00 between January 1, 2013 and December 31,
2013;
Reporting
After January 1, 2014, EVERY payment made to a
Medicare beneficiary concerning a general liability claim
must be reported whether the payment is made as a
result of settlement, judgment, or for any other reason
whether a release is obtained or not.
Reporting
Section 111 of the Medicare, Medicaid & SCHIP
Extension Act
– These thresholds do not apply or otherwise
relieve a RRE from any obligations under the
Medicare Secondary Payer Act to protect
Medicare’s interest.
In other words…..
Still Must Pay the Lien and Protect
Medicare from paying for future
related treatment.
Reporting
Final Reporting
 RRE
must “report” using CMS website
using “Claim Input File”
 This can only be done by the RRE
Penalties
REIMBURSEMENT TO MEDICARE
Medicare must be reimbursed within 60 days of
receipt of payment by Medicare beneficiary
 If a liability insurance settlement is made and
Medicare is not reimbursed, the third party payer
must reimburse Medicare even if it has already
paid the beneficiary!
 Applies regardless of how amounts are
designated in settlement (i.e. pain & suffering)

Penalties
CMS’ STATUTORY RIGHTS TO RECOVERY
UNDER MSP
 Interest if not paid within 60 days of
notification – 42 U.S.C. 1395y(b)(2)(B)(ii)
 Double damages if US must bring action to
recover against primary payers –
42 U.S.C. 1395y(b)(2)(B)(iii)
 Subrogation rights – 42 U.S.C.
1395y(b)(2)(B)(iv)
Penalties
Fines and Penalties Associated with Section III

Any “entity” which fails to comply with the
reporting requirements mandated by 42 U.S.C.
1395y(b)(8), which is the codification of Section
111, is subject to a $1,000.00 a day fine, per
claim, for noncompliance.
Penalties
PENALTIES FOR NONCOMPLIANCE
Penalties for noncompliance with
reporting requirements are $1,000
per day!!!
Penalties
U.S. v. Harris
 The U.S. Government sued claimant’s attorney in
personal injury case seeking to assert its recovery rights
under the MSP.

CMS had paid approximately $22,549.67 in Medicare
claims submitted on the beneficiary’s behalf.

Underlying case settled for $25,000.00 and Medicare
agreed to reduce its conditional payments to $10,253.59.

Counsel never filed any such appeal and also failed to
pay CMS within the statutorily required 60-day time
period.
Penalties
U.S. v. Harris

Holding: The government was entitled to recover
funds received by a Medicare beneficiary from a
settlement in a personal injury action from a ladder
retailer. Because the defendant took responsibility for
the payment of beneficiary's medical services, the
government statutorily reserved the right for
reimbursement for the medical services paid for by
Medicare.
Penalties
U. S. v Stricker (E.D. N.D. Ala. 2009) (No. CV-09PT-2423-E)

The U.S. government sued to recover conditional
payments and double damages plus interest
under the Medicare Secondary Payer Act.

The parties named in the suit include claimants’
counsel, insurers and corporate defendants.
Penalties
Plaintiff May Have Cause of Action

Medicare beneficiaries also have a potential private
cause of action against a “primary plan which fails to
provide for primary payment”
– Plaintiff can seek double damages against RRE

Examples:
– Beneficiary can sue if a beneficiary’s Medicare benefits are
suspended because an agreement did not properly protect
his/her interest; OR
– If insurer’s/self-insured’s post-settlement reporting or
reimbursement violations interrupted the plaintiff’s Medicare
payments
WHAT IS THE IMPACT ON RESOLVING
CLAIMS?

Indemnification clauses shifting responsibility to
plaintiff are no longer sufficient to protect the
insurer

Insurers have an affirmative obligation to report

Efforts to address Medicare liens must begin at an
early stage in litigation

Claimant’s Medicare status must be determined
by liability insurer or worker’s compensation
carrier
Websites

Centers for Medicare-Medicaid Services:
– www.cms.hhs.gov

CMS User’s Guide:
– www.cms.hhs.gov/MandatoryInsRep/Downloads/NGHPUserGuide022210.
pdf

CMS Downloads:
– www.cms.hhs.gov/MandatoryInsRep/

Town Hall Transcripts:
– www.cms.hhs.gov/MandatoryInsRep/07 NGHP
Transcripts.asp/#TopOfPage

Medicare Advocacy Recovery Coalition:
– www.marccoalition.com

MSPRC:
– http://www.msprc.info/

www.mymedicare.gov
QUESTIONS?
THANK YOU FOR YOUR
PARTICIPATION!
GETMAN, SCHULTHESS & STEERE,
P.A.