Medicare Secondary Payer
Compliance:
Perspectives Within the Industry
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• James S. Price, ARM, CMSP Senior Consult
AON Global Risk Consulting
• Michele Adams, Director,
Claims Management & Business Strategies,
Walt Disney World Resort
• Neil Selman, Esq. Attorney/Partner,
Selman Breitman
• Aaron Frederickson, Esq. Chief Legal Officer,
MSP Compliance Solutions, LLC
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What to Expect
•Understand how the conflict between law
and policy has shaped MSP compliance
•Appreciate the impact of MSP compliance
on the law and claims management
•Identify the compliance assistance
available from service providers
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Key MSP Numbers to Consider
• $524B – CMS 2014 Budget
• $1.84b – CMS WCMSA “saving” for 2013
• 30-40K WCMSA per year
(cost our industry $66m – $96mm PER YEAR)
• Since7/23/2001 est. $55B in MSA trusts
• CMS cannot say how much actually pay out of MSA
trusts for Medicare items and services
• So-called LMSA “tax” could easily double these
amounts!
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Medicare Secondary Payer Act
42 U.S.C. § 1395y (b) (2)—Medicare secondary payer
(A) In general
Payment under this subchapter may not be made, except as provided
in subparagraph (B), with respect to any item or service to the
extent that—
(i) payment has been made, or can reasonably be expected to be
made, with respect to the item or service as required under
paragraph (1), or
(ii) payment has been made [3] or can reasonably be expected to be
made [3] under a workmen’s compensation law or plan of the
United States or a State or under an automobile or liability
insurance policy or plan (including a self-insured plan) or under no
fault insurance.
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42 C.F.R. §411.46—Lump Sum Payments
(a) Lump-sum commutation of future benefits. If a
lump-sum compensation award stipulates that
the amount paid is intended to compensate the
individual for all future medical expenses
required because of the work-related injury or
disease, Medicare payments for such services are
excluded until medical expenses related to the
injury or disease equal the amount of the lumpsum payment.
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42 C.F.R. §411.46—Lump Sum Payments
(b) Lump-sum compromise settlement.
(1) A lump-sum compromise settlement is deemed
to be a workers' compensation payment for
Medicare purposes, even if the settlement
agreement stipulates that there is no liability
under the workers' compensation law or plan.
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42 C.F.R. §411.46—Lump Sum Payments
(b) Lump-sum compromise settlement.
(2) If a settlement appears to represent an attempt to shift to
Medicare the responsibility for payment of medical expenses
for the treatment of a work-related condition, the settlement
will not be recognized. For example, if the parties to a
settlement attempt to maximize the amount of disability
benefits paid under workers' compensation by releasing the
workers' compensation carrier from liability for medical
expenses for a particular condition even though the facts
show that the condition is work-related, Medicare will not pay
for treatment of that condition.
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MSP Manual Chapter 7, Section 50.5 “Contractor Action If a Liability Claim Is
Pending and Medicare Benefits Were Paid”
“There should be no recovery of benefits paid for services
rendered after the date of a liability insurance settlement.
However, the entire amount of a settlement is subject to
recovery, whether the liability payment is made at the time of
the settlement, or over a period of time agreed to by the
parties in a structured settlement.”
Question: Why is Chapter 7 now “Under Review” by CMS and
not a part of the current MSP Manual?
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LMSAs in the Federal Courts
“Prove up cases” and so-called LMSAs
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Finke v. Hunter’s View, 2009 U.S. Dist. LEXIS 126830 (D.
Minn. 2009)
Big R. Towing v. Benoit, 2011 U.S. Dist. LEXIS 1392 (W. D.
La. 2011)
Frank v. Gateway Ins. Co., 2012 U.S. Dist. LEXIS 33581 (W.
D. La. 2012)
Bertrand v. Talen’s Marine & Fuel, LLC, 2012 U.S. Dist.
LEXIS 78053 (W. D. La. 2012)
Early v. Carnival Corp., 2013 U.S. Dist. LEXIS 16711 (S. D.
Fla. 2013)
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MSP and Future Medicals
Medicare Program; Medicare Secondary Payer and
“Future Medicals,” CMS-6047-ANPRM
• Seven proposed options for a consolidated “future
medicals” program
• Industry response was “not helpful” to CMS
• Many challenged CMS statutory/regulatory
authority
• To date, CMS has NOT done anything further
• What will CMS and MSA industry’s next move be?
• What should be YOUR next move?
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Questions, Final Comments and
Contact Information
James S. Price, ARM, CMSP
(415) 486-7230
jim.price@aon.com
Neil Selman
(310) 445-0800
Michele Adams
(407) 397-6337
Michele.Adams@disney.com
Aaron Frederickson
(651) 485-7036
nselman@selmanbreitman.com
aaron@mspComplianceSolutions.com
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