Since my last post on the issue of medicare reimbursements, there are some new updates on the topic because Medicare posted an alert on May 11, 2009. the following reflect some of the changes and updates.

  • The Medicare, Medicaid and SCHIP Extension Act of 2007, or MMSEA, requires defendants and insurance carriers to report settlements with Medicare beneficiaries to the secretary of Health and Human Services. Section 111 of the MMSEA requires that insurers register electronically with the  CMS, and report all settlement claims for the purpose of providing the CMS within information to recover  on its superlien.
  • Insurers are to register with the CMS between May 1 and June 30. After that there is a process of testing the system to ensure smooth operation.
  • The penalty for non-compliance for failing to advise the CMS of a settlement is $1,000 per day per reportable Medicare claim.

Testing for mandatory reporting has been extended to Dec. 31, but claims must be reported retroactively to July 1.

The following changes are identified by the Garretson law firm, lien specialists,

Those changes are as follows:

1. Extension of Registration Period. The registration period for non-Group Health Plan RREs, previously scheduled to end on June 30, 2009, has been extended through September 30, 2009.

2. Submission of Live Production Files. RREs are now required to submit its first live production files no later than its assigned window in Q2 2010 (April – June) instead of Q1 2010 (January – March).

3. Testing Period. The testing period for the submission of Claim Input Files will take place from January 1, 2010 through March 31, 2010. Previously, this period was to last from July 1, 2009 through December 31, 2009.

4. Early Submission. If an RRE completes the registration process and completes testing successfully prior to its assigned submission window, it may begin submitting live production files starting January 1, 2010.

5. Query Files. Query files may be submitted starting on July 1, 2009, but only if the RRE has completed registration and is in testing status according to CMS standards.

6. TPOC Reporting Exception. A Total Payment Obligation to the Claimant (“TPOC”) does not have to be reported if the settlement occurs between July 1, 2009 and December 31, 2009.

7. ORM Reporting. Reporting related to Ongoing Responsibility for Medicals (“ORM”) must still be reported if it occurs on or after July 1, 2009, but should be reported according to the revised time periods provided in the Alert.

8. Multiple TPOCs. If there are multiple TPOCs present, only those occurring on or after January 1, 2010 should be reported.

In light of the Alert, the revised MMSEA implementation timeline looks like this:
• May 1, 2009 – Sept. 30, 2009: Registration
• July 1, 2009: Test/Production Query Input Files Accepted
• January 1, 2010: Claim Input File Testing Begins
• January 1, 2010: Production Claim Input Files Accepted
• April 1, 2010 – June 30, 2010: Initial Production Claim Input Files Due

To view the Complete Alert, please click here.

The following are recommendations previously suggested by Attorney Tom Annopol at his blog:

Recommendations for the Practitioner

While the insurer is now obligated to register all claims and verify lien resolution, plaintiffs must fully cooperate and provide all necessary information before a settlement can be finalized. Whether it’s a mass tort claim or an individual action, the verification and resolution process will be lengthy. In order to prevent unnecessary and unreasonable delay, both parties should begin the verification process early and well before any claims are resolved. To streamline the settlement process, we recommend the following actions.

• Start early: The CMS will be inundated with requests for proof of no lien statements and for lien payoff amounts. The sheer magnitude of the number of liability settlements effected by this law coupled with the anticipated bureaucratic delay of any expanded governmental program must create angst and concern with even the most organized and efficient attorneys. To avoid delays on the back end, best practice for plaintiffs’ counsel is to advise the CMS of the claim once suit is filed or well before resolution if pre-suit settlement is anticipated. This advance notice should allow the CMS ample time to provide the lien amount in advance of settlement. Not only will this help with the new MMSEA Act, but it will also help the parties better prepare for settlement by knowing the lien amounts. Additionally, accuracy is critical. A missing digit from a Social Security number or a misspelled name creates a reporting nightmare and will guarantee extensive delay. If the case ultimately fails to garner a recovery, a simple letter to the CMS that the claim was unsuccessful will close the file on their end.

• Stay in touch with the CMS: While the case is pending, make sure to stay in contact with the CMS to ensure that a lien amount is forthcoming. Be mindful that the lien amount is ever changing. A Medicare lien today will grow over time as additional services are provided. Final lien resolution must be timely with the settlement and distribution.

• Review services provided and negotiate: Plaintiff counsel must not simply accept the CMS accounting concerning lien amounts. Services provided must be examined to confirm that the treatment and billing is claim-related and reasonable. The CMS is prepared and routinely negotiates liens based upon a multitude of factors including the lien and settlement amounts, as well as liability and the likelihood of success or failure of a future judgment if a settlement offer is rejected.

• Coordinate settlement time: Settlement should occur in conjunction with lien resolution. If lien resolution is completed in conjunction with settlement, not only is the claimant provided with the best opportunity to negotiate the lien, the defendant can more quickly report and verify the settlement so as to not delay the release of funds to plaintiffs.

• Confirm: Once the CMS verifies in writing the lien resolution or the fact that no lien exists, settlements can be funded.

To print a handy reference guide regarding some of the requirements under the MMSEA, click here.