section_sign

Medicare Secondary Payer – Governing Statute

MEDICARE SECONDARY PAYER – GOVERNING STATUTE
SOCIAL SECURITY ACT SEC. 1862. [42 U.S.C. 1395Y] EXCLUSIONS FROM COVERAGE AND MEDICARE AS SECONDARY PAYER
(B) MEDICARE AS SECONDARY PAYER.—
(2) MEDICARE SECONDARY PAYER.—

(A) In general.—Payment under this title 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 or can reasonably be expected to be made 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.

Read More
(B) CONDITIONAL PAYMENT.—

(i) Authority to make conditional payment.—The Secretary may make payment under this title with respect to an item or service if a primary plan described in subparagraph (A)(ii) has not made or cannot reasonably be expected to make payment with respect to such item or service promptly (as determined in accordance with regulations). Any such payment by the Secretary shall be conditioned on reimbursement to the appropriate Trust Fund in accordance with the succeeding provisions of this subsection.

(ii) Repayment required.—A primary plan, and an entity that receives payment from a primary plan, shall reimburse the appropriate Trust Fund for any payment made by the Secretary under this title with respect to an item or service if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service. A primary plan’s responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon the recipient’s compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan’s insured, or by other means. If reimbursement is not made to the appropriate Trust Fund before the expiration of the 60-day period that begins on the date notice of, or information related to, a primary plan’s responsibility for such payment or other information is received, the Secretary may charge interest (beginning with the date on which the notice or other information is received) on the amount of the reimbursement until reimbursement is made (at a rate determined by the Secretary in accordance with regulations of the Secretary of the Treasury applicable to charges for late payments).

(iii) Action by united states.—In order to recover payment made under this title for an item or service, the United States may bring an action against any or all entities that are or were required or responsible (directly, as an insurer or self-insurer, as a third-party administrator, as an employer that sponsors or contributes to a group health plan, or large group health plan, or otherwise) to make payment with respect to the same item or service (or any portion thereof) under a primary plan. The United States may, in accordance with paragraph (3)(A) collect double damages against any such entity. In addition, the United States may recover under this clause from any entity that has received payment from a primary plan or from the proceeds of a primary plan’s payment to any entity. The United States may not recover from a third-party administrator under this clause in cases where the third-party administrator would not be able to recover the amount at issue from the employer or group health plan and is not employed by or under contract with the employer or group health plan at the time the action for recovery is initiated by the United States or for whom it provides administrative services due to the insolvency or bankruptcy of the employer or plan.

(iv) Subrogation rights.—The United States shall be subrogated (to the extent of payment made under this title for such an item or service) to any right under this subsection of an individual or any other entity to payment with respect to such item or service under a primary plan.

(v) Waiver of rights.—The Secretary may waive (in whole or in part) the provisions of this subparagraph in the case of an individual claim if the Secretary determines that the waiver is in the best interests of the program established under this title.

(vi) Claims-filing period.—Notwithstanding any other time limits that may exist for filing a claim under an employer group health plan, the United States may seek to recover conditional payments in accordance with this subparagraph where the request for payment is submitted to the entity required or responsible under this subsection to pay with respect to the item or service (or any portion thereof) under a primary plan within the 3-year period beginning on the date on which the item or service was furnished.

 Governing Provisions
Title 42: Public Health
PART 411—EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE PAYMENT

Subpart B—Insurance Coverage That Limits Medicare Payment: General Provisions

§ 411.20 Basis and scope.
§ 411.21 Definitions.
§ 411.22 Reimbursement obligations of primary payers and entities that received payment from primary payers.
§ 411.23 Beneficiary’s cooperation.
§ 411.24 Recovery of conditional payments.
§ 411.25 Primary payer’s notice of primary payment responsibility.
§ 411.26 Subrogation and right to intervene.
§ 411.28 Waiver of recovery and compromise of claims.
§ 411.30 Effect of primary payment on benefit utilization and deductibles.
§ 411.31 Authority to bill primary payers for full charges.
§ 411.32 Basis for Medicare secondary payments.
§ 411.33 Amount of Medicare secondary payment.
§ 411.35 Limitations on charges to a beneficiary or other party when a workers’ compensation plan, a no-fault insurer, or an employer group health plan is primary payer.
§ 411.37 Amount of Medicare recovery when a primary payment is made as a result of a judgment or settlement.

Subpart C—Limitations on Medicare Payment for Services Covered Under Workers’ Compensation

§ 411.40 General provisions.
§ 411.43 Beneficiary’s responsibility with respect to workers’ compensation.
§ 411.45 Basis for conditional Medicare payment in workers’ compensation cases.
§ 411.46 Lump-sum payments.
§ 411.47 Apportionment of a lump-sum compromise settlement of a workers’ compensation claim.

Subpart D—Limitations on Medicare Payment for Services Covered Under Liability or No-Fault Insurance

§ 411.50 General provisions.
§ 411.51 Beneficiary’s responsibility with respect to no-fault insurance.
§ 411.52 Basis for conditional Medicare payment in liability cases.
§ 411.53 Basis for conditional Medicare payment in no-fault cases.
§ 411.54 Limitation on charges when a beneficiary has received a liability insurance payment or has a claim pending against a liability insurer.

 

Medicaid: State Statutes & Regs.

Medicaid State-Specific Tort Recovery Statutes

State
Citation
Alabama Ala. Code 1975 §22-6-6
Alaska Alaska Stat. §§47.05.070, 47.07.025
Arizona Ariz. Rev. Stat. Ann §§36-2903(F), -2903.01 (K), -2915, -2916:12-962
Arkansas Ark. Code Ann §§20-77-302, -307
California Cal. Welf. & Inst code §§14124.70, et seq. ; 4124.71; 14124.74
Colorado Colo Rev. Stat. §26-4-403(3), (4), (5)
Connecticut Conn. Gen. Stat. §§17b-94; 17b-265
Delaware
DC DC Code §§ 4-601 to -607
Florida Florida Statutes, §409.910
Georgia Ga. Code Ann. §§ 49-4- 140. -148(a), -149(a), 149(d), -157
Hawaii Haw. Rev. Stat. §§ 346-29(c), -37
Idaho Idaho Code Ann., §56-209b
Illinois 305 Ill. Comp. Stat. 5/11-22
Indiana IC 12-15-1, et seq; IC 12-15-29-9
Iowa
Kansas Kan. Stat. Ann. §39-719a
Kentucky Ky. Rev. Stat Ann. § 205.520. 624, 626, 628, 629
Louisiana La. R.S. 46:446.2; 46:446
Maine Me. Rev. Stat. Ann. tit. 22, § 14
Maryland Md. Code Ann. Health – Gen. §§ 15-120 to- 121.3
Massachusetts Mass. Gen Laws ch. 118E, § 22; ch. 18 § 5G; ch. 152 § 46A
Michigan Mich. Comp. Laws §400.106
Minnesota
Mississippi Miss. Code Ann. § 43-13-125
Missouri Mo. Rev Stat. §§ 208.2159, 287.266
Montana Mont Code Ann. §§ 53-2-612.-613
Nebraska
Nevada
New Hampshire N.H. Rev Stat. Ann. § 167: 14-A
New Jersey N.J. Stat. Ann §§ 30:4D-7(K), D-7.1
New Mexico
New York N.Y. Soc. Serv. Law §§ 366(4)(h), 367- a(2)(b), 104-b
North Carolina N.C.G.S.A. § 108A-70
North Dakota N.D. Cent. Code § 50-24.1 -02.1
Ohio Ohio Rev. Code Ann §§ 5101.58 and .59
Oklahoma OS 63-5051.1
Oregon Or. Rev. Stat. §§416.510 to .610
Pennsylvania
Rhode Island R.I. Gen. Laws § 40-6-9
South Carolina S.C. Code Ann. §§ 43-7-410 to -440
South Dakota S.D. Codified Laws § 28-6-7.1
Tennessee T.C.A. § 71-5-117
Texas Texas Human Resources Code, §32.033
Utah Utah code Ann. §§ 26-19-1 to -19
Vermont Vt. St. T. §1910
Virginia
Washington Wash. Rev. Code §§ 43.20B.050, 060, 070
West Virginia W. Va. Code, §§ 9-5-11, 11a, 11b
Wisconsin Wis. Stat. § 49.89
Wyoming Wyo. Stat. Ann. § 41-2-201, -203; 42-4-202, -203

 

Medicare Set Asides

Medicare Set Asides (MSA’s)

The need to protect Medicare’s future exposure in a Workers’ Compensation, liability or no-fault insurance matter has been the subject of ongoing discussion for years. In some cases these discussions can slow the settlement process to a grinding halt. While it is standard practice to protect Medicare’s future exposure in a Workers’ Compensation matter when Comp is commuted, it is highly disputable as to whether protecting Medicare’s future exposure is even required in a liability matter.

Click to Read More

The Center for Medicare and Medicaid Service’s (CMS) position is that Medicare’s future interest must be considered.  It is based upon language in the MSP statute that has been in effect since 1980. The MSP statute at 42 U.S.C. §1395y(b)(2)(A)(ii) states that where payment has been made, or can reasonably be expected to be made 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 its interest must be considered.

Regulation 42 C.F.R. §411.46 states that Medicare must be considered in any Workers’ Compensation settlement when the client might rely on Medicare to cover any future medical costs related to the covered work injury.

The above regulation does not mention liability settlements. Furthermore, there is not a CFR that states when Medicare’s future exposure must be protected in a liability claim. In addition there is not a statute that mandates Medicare Set Asides (MSA) in any situation. An MSA is simply Medicare’s preferred method of protecting its future interest.

Since 2001 the Centers for Medicare and Medicaid Services (CMS) has published numerous policy memoranda on how to best protect their future exposure in a Worker’s Compensation matter.  There is one such memo that discusses liability matters.  An unofficial CMS policy memo release in May of 2011 states that “Medicare’s interest must be protected; however CMS does not designate a specific mechanism to protect those interests.  The law does not require a “set aside” in any situation.  The law requires that the Medicare Trust Fund be protected from payment for future services whether it is a Workers’ Compensation or Liability case.  There is no distinction in the law.”

Claims Administration

Administering WCMSAs

The Centers for Medicare and Medicaid Services (CMS) has very clear rules on how to administer a Workers’ Compensation Medicare Set Aside (WCMSA). The following claims administration information, taken directly from their website, states the following:

Click to Learn More

Professional vs. Self-Administration of WCMSAs

A WCMSA should be placed in an interest bearing account. WCMSAs should also be administered by a competent administrator (the representative payee, a professional administrator, etc.). When a claimant designates a representative payee, appointed guardian/conservator, or has otherwise been declared incompetent by a court; the settling parties must include that information in their Medicare set-aside arrangement proposal to CMS.(Ref: 10/15/04 Memo Q2)

In addition, the claimant may self-administer his or her own WCMSA, if permitted under State law. Claimant should submit an annual self-attestation form when monies have been exhausted. (Ref:4/21/03 Memo Q8)

In professional administrative situations, the administrator of the set-aside arrangement must forward annual accounting summaries concerning the expenditures of the arrangement to the CMS Medicare contractor responsible for monitoring the individual’s case. Additionally, the Medicare contractor is responsible for verifying that no payments from Medicare are made for medical expenses related to the injury or illness/disease until the WCMSA is exhausted. (Ref: 7/23/01 Memo Q3)

Administrative Fees/Expenses and/or Attorney Costs

(Ref: 5/7/04 Memo)

Administrative fees/expenses for administration of the WCMSA and/or attorney costs specifically associated with establishing the WCMSA cannot be charged to the set-aside arrangement. The CMS will no longer be evaluating the reasonableness of any of these costs because the payment of these costs must come from some other payment source that is completely separate from the WCMSA funds.

For example, if the settling parties submit a WCMSA proposal to CMS that claims that the claimant will need $50,000 worth of work-related medical expenses that would otherwise be reimbursable under Medicare and the settling parties claim that it will cost $10,000 in administrative and attorney fees in order to both administer and establish the Medicare set-aside arrangement proposal of $50,000, then CMS will only review the reasonableness of the $50,000 figure.

The CMS will not review whether or not the $10,000 in administrative and attorney fees are reasonable nor will CMS permit the settling parties to add that $10,000 amount to the $50,000 WCMSA amount. Therefore, if CMS approves that proposal for a $50,000 WCMSA, the settling parties $10,000 in administrative and attorney fees cannot be charged to/against the WCMSA of $50,000 because CMS considers those costs to be a separate issue for the settling parties to negotiate.

Treatment of Taxable Interest Income Earned on a WCMSA

(Ref: 7/11/05 Memo Q6)

If a claimant receives a Form 1099-INT for the interest income earned on his or her WCMSA account, the claimant or his/her administrator may withdraw an amount equal to the additional tax as a “cost that is directly related to the account” to cover the additional tax liability. This assumes that there is adequate documentation for the amount of incremental tax that the claimant must pay for the interest earned on this WCMSA. Moreover, such documentation should be submitted along with the annual accounting.

Beneficiaries that Request Termination of a WCMSA Account

(Ref: 7/11/05 Memo Q10)

The administrator of the CMS-approved WCMSA should not release set-aside funds for any purpose other than the purpose for which the WCMSA was established without review from CMS. However, if the treating physician concludes that the claimant’s medical condition has substantially improved, then the claimant (or the claimant’s representative) may submit a new WCMSA proposal covering future expected medical expenses. Such proposals must justify at least a 25% reduction in the outstanding WCMSA funds. In addition, such proposal may not be submitted until at least five years after a previous CMS approval letter and should be accompanied by all supporting documentation not previously submitted with the original WCMSA proposal. The CMS decision on the new proposal is final and not subject to administrative appeal. The above proposals shall be submitted to:

CMS
c/o Coordination of Benefits Contractor
P.O. Box 33849
Detroit, MI 48232-5849
Attention: WCMSA Proposal

If CMS determines that a 25% or greater reduction is justified, CMS will issue a new approval letter. After CMS issues a new approval letter, any funds in the current WCMSA in excess of the newly calculated amount may be released to the claimant.

Effective August 25, 2008, the July 11, 2005 memorandum at Question and Answer 10, entitled “Beneficiaries that Request Termination of a WCMSA Account,” is rescinded.

Death of a Claimant Prior to Exhaustion of the Medicare Set-Aside Money

(Ref: 4/21/03 Memo Q21)

Once the Regional Office (RO) and the contractor responsible for monitoring the claimant’s case verify that all of the claimant’s claims have been paid, then any amount left over in the claimant’s WCMSA may be disbursed pursuant to State law. This may involve holding the WCMSA open for some period after the date of death, as providers, physicians, and other suppliers are permitted to submit their initial bill to Medicare for a period ranging from 15-27 months after the date of service.

Transfer Mechanism for Items and Services Not Covered by Medicare

(Ref: 7/11/05 Memo Q15)

Should a WCMSA provide for items and services that are not covered by Medicare but later become covered, those funds should then be considered part of the set-aside and treated accordingly, i.e., used to pay for any services as they were designated in the non-Medicare portion of the set-aside included in the WC settlement. These funds do not have to be transferred to a separate WCMSA bank account or be included in the annual WCMSA accounting.

Workers’ Compensation


Workers’ Compensation Medicare Set Asides (WCMSA)

In situations where Workers’ Compensation benefits are fully commuted as a result of a settlement, Medicare does not have to pay for future related medical care that it otherwise would normally pay for.

CMS believes that a Medicare Set Aside is the best method to protect its future exposure.

 

Read More

Medicare has published quite a few policy memorandum on items that need to be considered when protect its future exposure in a Workers’ Compensation matter and additional memorandum on the development of a WCMSA including when Medicare will review and WCMSA and how to administer and fund a WCMSA.  The CMS policy memorandum listed below detail the following topics related to WCMSAs:

  • No Medicare Payments for a Claimant’s Work-Related Injury or Disease until the WCMSA has been Exhausted  (Ref:  7/23/01 Memo)
  • No Compromise of Future Medical Expenses (Ref: 7/11/05 Memo Q11)
  • No Waivers of Specific Services Related to a WC Case (Ref: 4/21/03 Memo Q18)
  • WC Claims Not Covered in the Settlement (Ref:  4/21/03 Memo Q16)
  • Loss of Medicare Entitlement after CMS Approval of a WCMSA (Ref. 7/11/05 Memo Q9)
  • Effect of WCMSA on Medicaid Eligibility (Ref: 7/11/05 Memo Q13)
  • Use of WC Settlement Funds Prior to Medicare Entitlement (Ref: 7/11/05 Memo Q3)
  • WCMSAs in Cases Where There are Both a WC Claim and a Third Party Liability Claim (Ref: 4/21/03 Memo Q19)
  • Review of a WCMSA
  • Administering a WCMSA
  • Funding a WCMSA

Claims Administration

Administering WCMSAs

 The Centers for Medicare and Medicaid Services (CMS) has very clear rules on how to administer a Workers’ Compensation Medicare Set Aside (WCMSA).  The following claims administration information, taken directly from their website, states the following:

Click to Read More

Professional vs. Self-Administration of WCMSAs

A WCMSA should be placed in an interest bearing account. WCMSAs should also be administered by a competent administrator (the representative payee, a professional administrator, etc.). When a claimant designates a representative payee, appointed guardian/conservator, or has otherwise been declared incompetent by a court; the settling parties must include that information in their Medicare set-aside arrangement proposal to CMS.(Ref: 10/15/04 Memo Q2)

In addition, the claimant may self-administer his or her own WCMSA, if permitted under State law. Claimant should submit an annual self-attestation form when monies have been exhausted. (Ref:4/21/03 Memo Q8)

In professional administrative situations, the administrator of the set-aside arrangement must forward annual accounting summaries concerning the expenditures of the arrangement to the CMS Medicare contractor responsible for monitoring the individual’s case. Additionally, the Medicare contractor is responsible for verifying that no payments from Medicare are made for medical expenses related to the injury or illness/disease until the WCMSA is exhausted. (Ref: 7/23/01 Memo Q3)

Administrative Fees/Expenses and/or Attorney Costs

(Ref: 5/7/04 Memo)

Administrative fees/expenses for administration of the WCMSA and/or attorney costs specifically associated with establishing the WCMSA cannot be charged to the set-aside arrangement. The CMS will no longer be evaluating the reasonableness of any of these costs because the payment of these costs must come from some other payment source that is completely separate from the WCMSA funds.

For example, if the settling parties submit a WCMSA proposal to CMS that claims that the claimant will need $50,000 worth of work-related medical expenses that would otherwise be reimbursable under Medicare and the settling parties claim that it will cost $10,000 in administrative and attorney fees in order to both administer and establish the Medicare set-aside arrangement proposal of $50,000, then CMS will only review the reasonableness of the $50,000 figure.

The CMS will not review whether or not the $10,000 in administrative and attorney fees are reasonable nor will CMS permit the settling parties to add that $10,000 amount to the $50,000 WCMSA amount. Therefore, if CMS approves that proposal for a $50,000 WCMSA, the settling parties $10,000 in administrative and attorney fees cannot be charged to/against the WCMSA of $50,000 because CMS considers those costs to be a separate issue for the settling parties to negotiate.

Treatment of Taxable Interest Income Earned on a WCMSA

(Ref: 7/11/05 Memo Q6)

If a claimant receives a Form 1099-INT for the interest income earned on his or her WCMSA account, the claimant or his/her administrator may withdraw an amount equal to the additional tax as a “cost that is directly related to the account” to cover the additional tax liability. This assumes that there is adequate documentation for the amount of incremental tax that the claimant must pay for the interest earned on this WCMSA. Moreover, such documentation should be submitted along with the annual accounting.

Beneficiaries that Request Termination of a WCMSA Account

(Ref: 7/11/05 Memo Q10)

The administrator of the CMS-approved WCMSA should not release set-aside funds for any purpose other than the purpose for which the WCMSA was established without review from CMS. However, if the treating physician concludes that the claimant’s medical condition has substantially improved, then the claimant (or the claimant’s representative) may submit a new WCMSA proposal covering future expected medical expenses. Such proposals must justify at least a 25% reduction in the outstanding WCMSA funds. In addition, such proposal may not be submitted until at least five years after a previous CMS approval letter and should be accompanied by all supporting documentation not previously submitted with the original WCMSA proposal. The CMS decision on the new proposal is final and not subject to administrative appeal. The above proposals shall be submitted to:

CMS
c/o Coordination of Benefits Contractor
P.O. Box 33849
Detroit, MI 48232-5849
Attention: WCMSA Proposal

If CMS determines that a 25% or greater reduction is justified, CMS will issue a new approval letter. After CMS issues a new approval letter, any funds in the current WCMSA in excess of the newly calculated amount may be released to the claimant.

Effective August 25, 2008, the July 11, 2005 memorandum at Question and Answer 10, entitled “Beneficiaries that Request Termination of a WCMSA Account,” is rescinded.

Death of a Claimant Prior to Exhaustion of the Medicare Set-Aside Money

(Ref: 4/21/03 Memo Q21)

Once the Regional Office (RO) and the contractor responsible for monitoring the claimant’s case verify that all of the claimant’s claims have been paid, then any amount left over in the claimant’s WCMSA may be disbursed pursuant to State law. This may involve holding the WCMSA open for some period after the date of death, as providers, physicians, and other suppliers are permitted to submit their initial bill to Medicare for a period ranging from 15-27 months after the date of service.

Transfer Mechanism for Items and Services Not Covered by Medicare

(Ref: 7/11/05 Memo Q15)

Should a WCMSA provide for items and services that are not covered by Medicare but later become covered, those funds should then be considered part of the set-aside and treated accordingly, i.e., used to pay for any services as they were designated in the non-Medicare portion of the set-aside included in the WC settlement. These funds do not have to be transferred to a separate WCMSA bank account or be included in the annual WCMSA accounting.

If you have any questions on how to administer a Medicare Set Aside please give us a call.

Contact Us

Medicaid Claims and Lien Resolution

Medicaid’s Right to Recover its Past Interest in a Lawsuit

US MapMost states have statutes requiring parties of a lawsuit to notify Medicaid of the matter so the agency can determine if they have paid past related claims.  In these states it is mandatory that Medicaid’s past interest be resolved.

  • Each state has a different tort claim recovery process.
  • States also have unique positions on offsetting the claim or lien for attorney fees and expenses.
  • Most states have varying policy and case law on how to treat the US Supreme Court decision Ahlborn v. Arkansas Department of Health and Human Services, which allows for a reduction of the Medicaid claim or lien.

Shapiro Settlement Solutions is very familiar with how each state treats the above items.  Our expertise allows for the best possible outcome for the injured party.

Will Shapiro

President/Founder

11211 Taylor Draper Ln, Austin, TX 78759

Website: https://www.lienteam.com

512-382-5100 (phone)

512-382-5955 (fax)

info@lienteam.com

West Coast Office:

101 W Broadway, #220, Oakland, CA 94607

 

CONTACT US
221, Mount Olimpus, Rheasilvia, Mars,
Solar System, Milky Way Galaxy
+1 (999) 999-99-99
PGlmcmFtZSBzcmM9Imh0dHBzOi8vd3d3Lmdvb2dsZS5jb20vbWFwcy9lbWJlZD9wYj0hMW0xOCExbTEyITFtMyExZDYwNDQuMjc1NjM3NDU2ODA1ITJkLTczLjk4MzQ2MzY4MzI1MjA0ITNkNDAuNzU4OTkzNDExNDc4NTMhMm0zITFmMCEyZjAhM2YwITNtMiExaTEwMjQhMmk3NjghNGYxMy4xITNtMyExbTIhMXMweDAlM0EweDU1MTk0ZWM1YTFhZTA3MmUhMnNUaW1lcytTcXVhcmUhNWUwITNtMiExc2VuITJzITR2MTM5MjkwMTMxODQ2MSIgd2lkdGg9IjEwMCUiIGhlaWdodD0iMTAwJSIgZnJhbWVib3JkZXI9IjAiIHN0eWxlPSJib3JkZXI6MCI+PC9pZnJhbWU+
Thank You. We will contact you as soon as possible.
Shapiro Settlement Solutions
CONTACT US FOR CONSULTATION
Thank You. We will contact you as soon as possible.