Medicare Secondary Payer Compliance:

1. Medicare Secondary Payer Compliance: Perspectives Within the Industry

2. • 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

3. 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

4. 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!

5. 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.

6. 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 lump-sum payment.

7. 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.

8. 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.

9. 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?

10. LMSAs in the Federal Courts • “Prove up cases” and so-called LMSAs • 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)

11. 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?

12. Questions, Final Comments and Contact Information • Neil Selman • (310) 445-0800 • nselman@selmanbreitman.com • Aaron Frederickson • (651) 485-7036 • aaron@mspComplianceSolutions.com • James S. Price, ARM, CMSP • (415) 486-7230 • jim.price@aon.com • Michele Adams • (407) 397-6337 • Michele.Adams@disney.com