Unraveling The MMSEA Sec. 111 Reporting Requirements

1. Unraveling The MMSEA Sec. 111 Reporting Requirements

2. Terms CMS – The Centers for Medicare & Medicaid Services (CMS) COBC – Coordinator of Benefits Contractor MSPRC – Medicare Secondary Payer Recovery Contractor (www.msprc.info) MMSEA/SCHIP – New mandatory reporting law MSPA - Medicare Secondary Payer Act – Law passed in 1980 CP – Conditional payment (Medicare “lien”) MSA – Medicare Set-aside

3. Medicare Compliance

4. Medicare Compliance

5. Medicare Compliance SOLUTION: TECHNOLOGY CLAIMS HANDLER

6. Medicare Compliance SOLUTION: CLAIMS HANDLER CLIENTS DEFENSE COUNSEL PLAINTIFF COUNSEL

7. Background Subjectto Change Electronic Registration for all RRE’s Started May 2009 Testing of Electronic Transmissions January 2010 – Dec 2010 First Live Data Submission to CMS January 1, 2011 Reporting of Cases that Settle October 1, 2010 Updated 2/26/10 When does reporting start?

8. RRE Definition Change • CMS changed the definition of RRE • Drastic change • Affects which entity has to report • Many cases switches burden • From Insured to Carrier • Carriers will have burden of reporting many, many more cases

9. What are we reporting? • We are not reporting every case. • We are only reporting: • Medicare Beneficiary only; and • Settlement value of $5,000* or more. *decreases over time

10. MMSEA – Impact • Data collection • Especially for liability (SS# and ICD) • Concern about timely reporting • $1,000 day per case civil penalty • More emphasis placed on pre-settlement Medicare lien resolution • Introduction of MSAs to liability cases

11. “Connecting the Dots”

12. Settlement Provisions Parties cannot transfer their responsibilities under the MSPA to other parties. Settlement and Release

13. “Connecting the Dots” – Example 1

14. Conditional Payment Timeline Estimated CP Amount Final Demand Date of Settlement Date of Loss

15. Conditional Payment - Solutions • “Check” option • Best result for defendant – no worries about future issues • Case can be closed once payment is issued • Has to be spelled out in settlement documents • Difficult to convince opposing counsel to do this • “Escrow” option • More problematic – examiner has to deal with MSPRC • Files open longer post settlement • Risk that final demand is substantially greater than estimated conditional payment amount • Risk should be allocated in settlement documents

16. Medicare Liens and MSAs

17. Medicare Secondary Payer Act Date of Settlement Date of Injury Conditional Payment MSA

18. Medicare Set-asides

19. Medicare Set-asides • For liability cases: • CMS: No formal approval process • Settlement includes future medical • Settlement value a good indicator • They provide an extra layer of defense

20. Medicare Compliance - Tips • Determine if a claimant is on Medicare or Social Security Disability (SSDIB) as early as possible • Once a claimant is determined to be Medicare or SSDIB advise opposing counsel • “Put down your swords when it comes to Medicare issues” • Discuss with opposing counsel the possibility of dealing with conditional payments or Medicare set-aside in any future settlement

21. Medicare Compliance - Tips • Check your settlement documents • Include MSA language • Include CP language • Check your claims handling procedures • Evaluate CP implications • Evaluate MSA possibilities

22. Medicare Compliance - Tips • At settlement time have two things ready: • Estimated Conditional Payment Amount • MSA amount, if necessary • Incorporate those into your settlement

23. Medicare Compliance - Tips • If going to trial: • Be prepared to educate judge concerning Medicare issues • May need to do a special jury verdict form that contains: • Damages for future medical treatment • Damages for past medical treatment

24. Medicare Compliance – Important Points • Need to understand the distinction between a conditional payment and a Medicare set-aside • Each component requires separate analysis: • Reporting • Medicare set-aside • Conditional payment • Each case may need none, one, or more of each component to be compliant

25. Impact on Litigation Risk Managers Examiners Defense Attorneys Claimant Attorneys Judges Education Trial Strategies Early intervention with Medicare beneficiaries Cost to settle Time to settle

26. Questions?

27. Need Further Information? Michael R. Merlino II, Esq. Gwinnett Commerce Center 3700 Crestwood Parkway, Suite 600 Duluth, GA 30096 Business: (678) 628-1336 Mobile: (770) 842-9628 E-mail: Michael.Merlino@sedgwickcms.com