A Punch After The Bell? Let Plaintiff's MSA And Lien Solutions Fight Your Battle

Therebs nothing worse than a late hit. As experts in Plaintiff’s MSA and Lien Solutions, we see these too often. Most likely, you never even see it coming. You roll with the punches, win your case, and win a settlement for your client. Case closed, right? Wrongb&because thatbs when the blow comes. Medicare starts denying payment of settlement-related bills because they know about your clientbs settlement. They know everything, your clientbs settlement amount, how much money was spent in attorneybs fees, litigation costs and liens, and the ICD-9 or ICD-10 disease codes that were settled as part of the case. The feeling that this is going to come back to bite you is unshakeableb&but just you wait.
You didnbt report your client to Medicare, and your client didnbt report themselves, so how does Medicare know all of this? The only way you client would self-report is if they had become Medicare eligible post-settlement. A Medicare Secondary Claim Development (SCA) Red Letter and questionnaire would have compelled them to self-report.B However, your client was Medicare eligible on or before theB date of settlement. B That only leaves one possible entityb&the defendant. What is their motivation to report your clientbs settlement to Medicare? B A big, bad, scary stick in the form of the Section 111 Medicare Secondary Payer Mandatory Report. The first part of the law is shown below:

structured settlements

The language used in this mandatory Medicare liability settlement reporting requirement is disturbingly vague, leaving a lot of questions. What exactly are the defendants reporting about you and your client? How much information are they turning over, and when? The answers are alarming. B

How Plaintiff’s MSA and Lien Solutions Can Help

Here is what we discovered:
There are 196 data points within a Section 111 report, and three of them are critical to plaintiffs. They are:
(1) The date of settlement.
(2) The total amount of the settlement, otherwise known as the Total Payment Obligation To Claimant or TPOC.
(3) The ICD-9 or 10 codes that describe the injuries or conditions settled as part of your clientbs case.
Thatbs it. Yet, if these three points arenbt alarming enough, just imagine what is reported in the rest of the data pointsb&all 193 of them.
All of this information is reported at the date of settlement, meaning the date the settlement agreement is signed or the date that you have a court order approving the settlement if you need that. The responsible reporting entity (usually the defendant or the self-insured) that does not report a Medicare-eligible beneficiarybs liability settlement to Medicare is subject to $1,000 per day, per claimant penalty. The exact text is shown below:

structured settlements

What does all of this mean for your client? Once this information is reported, Medicare files it away for future use. The expectation is that Medicare is now, from the date of settlement forward, B secondary payer to the settlement your client has just received for all of the future Medicare-allowable, accident or incident related expenses covering the conditions or injuries that were the subject of the settlement. Those ICD-9 and ICD-10 disease codes? Those are matched up with future medical bills. A match means payment is denied, and your client is left footing the bill until they can prove they have spent their TPOC on Medicare-allowable bills, after which Medicare covers everything for the rest of clientbs life. If your clientbs settlement money has already been spent, or otherwise allocated, it gets worse. In the end, your client may be left with insufficient funds to both take care of denied payments and all of their other needs. And who are they likely to take it out on? Most likely itbs you. An angry phone call, a bar complaint, a malpractice claim? One or all of these could be your fate.
Donbt let this happen to you. Put proper planning in place from the very beginning, and take control of your clientbs Medicare issues with the Plaintiffbs MSA and Lien Solution. What you don’t know about Medicare reporting and skillful use of strategically minimized (and still voluntary) MSAs to avoid major client Medicare issues can affect your time, money and reputation. Let us help you through it. Sign up for our free video training series: How to Avoid Stress, Reduce Risk and Save Money in Cases Involving Liability MSAs, Structured Settlements and Lien Resolutions.


The Truth About Medicare Set-Aside Solutions—How What You Don’t Know Could Hurt You

Medicare eligible. It seems that when a defendant hears these words, they automatically place a target on your client’s back and aim for the bullseye. Here at Settlement Professionals, we have seen this happen year in and year out. That’s why we have crafted the ability to provide attorney’s with holistic Medicare Set-Aside solutions.
The label of being “medicare eligible” can lead to many un-truths. For example, defendants may claim that your client is required to create an MSA. Un-true. And this one: that defendants won’t be able to settle your case until they have proof that Centers for Medicare and Medicaid Services (CMS) has approved your client’s MSA.  Un-true. Or, that you must obtain a CMS letter stating that an MSA is not required in your client’s case.  Un-true, and not even possible. If any of this sounds familiar, it’s because defendants have been telling you un-truths about Medicare Set-Aside (MSA) arrangements for years. The truth is that MSAs aren’t legally required at all in liability personal injury cases, CMS is not approving liability MSAbs, and CMS will not provide a letter stating that an MSA is not required in a specific case. In fact, MSA’s are entirely voluntary – a conclusion that was once again confirmed as a result of the Aranki vs. Burwell case. Yet, this outcome doesn’t mean that MSA’s should be ignored. That is why SPI has tirelessly sought to provide Medicare Set-Aside solutions that address these untruths to help your client make an informed decision. Part of making an informed decision is knowing the history of MSA’s and understanding why MSA’s should not be ignored.

The History Behind Medicare Set-Aside Solutions

The Aranki vs. Burwell case evolved from a medical malpractice case that started in 2009 in Arizona. While a settlement had been reached, the defendants were still concerned about its finality due to the uncertainty of the MSA question. A lot was unknown about MSA’s back then, and the defendants thought that they would be liable without a court decision on its necessity. They demanded that the plaintiffs supply them with a letter from CMS stating whether or not the client was required to set up an MSA. With no immediate answer, the settlement was held up for three years. That is until a federal judge issued a pronouncement.
The judge stated that, no federal law or CMS regulation requires the creation of an MSA in a personal injury settlement.  It gets better. This judge was also asked to rule on forcing CMS to issue a letter as to whether or not this client needs an MSA.” The ultimate finding being that there’s no federal law that requires it [CMS to issue a letter], so the court doesn’t see any standing here to even comment. No MSA required meant case closed, and this decision has acted as the ruling going forward. Yet, recent events indicate that a change could be coming soon.
More critical insight can be found in the Stalcup memo released in 2011 by Sally Stalcup, Regional Director of Region 6 for Medicare and CMS in Dallas. Her memo states that Medicare trust funds must be protected from payment for future services whether it’s Worker’s Comp. or liability. Surrounding language indicates that while CMS does not mandate a specific mechanism to protect those interests, and the law does not require a set-aside in any situation, that an MSA is the preferred method. Also of note is that any time settlement funds can be expected to pay for future services, Medicare is not to be billed for future medical services until these funds are exhausted. Exact text is shown below:

Medicare Set-Aside solutions
Medicare Set-Aside solutions

After this memo, a clamor for guidance followed and with that came an advance notice of proposed rulemaking, issued on June 15, 2012. This advance notice, addressing liability cases, included seven different options for handling the liability Medicare Set-Aside issue. Especially alarming was option number four, shown below, because it required submitting a proposed MSA to CMS for review and approval.
Medicare Set-Aside solutions
Fast forward two years later to October 8, 2014. The Project for Public Guidance, which this advance notice was part of, was withdrawn. Yet, expectations that CMS will resubmit at some point in the future still loom large. Added to these is another concern. Earlier this year, CMS published an update to an earlier pre-solicitation for a workers compensation review contractor. The update explains that the Statement of Work (SOW) is being updated to include the processing of Non-Group Health Plan (NGHP) Medicare Set-Aside arrangements, with an anticipated award date of November 7, 2016.
Medicare set-aside solutions
All of these are signs that the U.S. Government has pivoted and is looking once again at Medicare Set-Aside arrangements in liability personal injury cases.
In the meantime, it’s important to decide whether, and which Medicare Set-Aside solution is right for your client. That depends on their unique facts and circumstances, and whether their personality is that of a do-it-yourself or a do-it-for-you type. Since the government has already stated that the law requires that the Medicare Trust Funds be protected from payment for future services whether it is a Worker’s Compensation or Liability case. There is no distinction in the law. How exactly will your client comply with the law? The old pick a number out of the air, or a professionally produced MSA Allocation Study? Then, next question, self-administer, or professionally administered?  If they go the do-it-yourself route, can you trust that they will follow through and put some amount of money from their settlement in some sort of account? And then what, just decide on their own which Medicare bills should be paid out of it?  If and/or when Medicare comes around and questions how your client determined the amount of their account, and demands a detailed accounting of how they spent that money, how will your client answer?  If Medicare dislikes their answers, and decides to deny future benefits for a time, will your client still be happy with the advice you gave them today?  Whatever you do, don’t make these decision alone. Take advantage of consultation services from the Plaintiff’s MSA and Lien Solution and let us help.
Sign up to receive our 2 Ways to Avoid an MSA guide. Together, we can decide if one of these can work for you. If an MSA can’t be avoided and your client wants professional help, B we’ll create a custom, strategically minimized Medicare Set-Aside allocation to the lowest possible, reasonable and defensible number. The end result? More settlement funds in your client’s pocket and less potential for future liability for you.

Settlement Professionals, Inc. is here for you. Please visit our website at www.settlepro.com or call us with any questions at (800) 666 – 5584.