Top 10 Medicare Compliance Myths - National Council of Self Insurers

Top 10 Medicare Compliance Myths Presented By: Charles G. Brown, Esq. Chair, Medicare Compliance Group Bridget Langer Smith, Esq., MSCC Vice Chair, Medicare Compliance Group Katherine S. Gallagher, Esq., MSCC Associate, Medicare Compliance Group

Medicare Compliance Myths Myth #10 • Being Medicare compliant means I only have to worry about protecting Medicare’s interests with a Medicare Set-Aside analysis.

Medicare Compliance Myths Myth #10 • Wrong. There are actually three areas of Medicare compliance that must be addressed in each claim.  Medicare Conditional Lien  Medicare Set-Aside  Section 111 Mandatory Reporting

Medicare Compliance Myths Myth #10 • Conditional Lien Satisfaction  Medicare may pay for a beneficiary’s medical treatment if the primary plan “has not made or cannot reasonably be expected to make payment … promptly. Any such payment by the Secretary shall be conditioned on reimbursements of the appropriate Trust Fund…” 42 U.S.C. 1395y(b)(2)(B)(i).  Medicare has a “Super Lien” if it pays for injury-related care for which a primary payer has responsibility.

Medicare Compliance Myths Myth #10 • Conditional Lien Satisfaction  Failure to pay for injury-related expenses can result in the following penalties: 1. 2. 3.

CMS can bring suit against any entity involved in the claim, including a liability insurer, self-insured defendant and attorney. CMS can seek double damages. CMS can terminate a plaintiff’s benefits.

Medicare Compliance Myths Myth #10 • Medicare Set-Aside Allocation  The setting aside of funds for the future care of the claimant which is related to the injury/illness giving rise to the claim or potential claim.

Medicare Compliance Myths Myth #10 • Section 111 Mandatory Reporting  Requires a primary payer to verify a claimant’s Medicare status; and  Reporting a settlement, judgment, award or other payment for a Medicare-eligible claimant.

Medicare Compliance Myths

Medicare Compliance Myths Myth #9 • If the claimant is under age 65, I don’t have to worry about Medicare.

Medicare Compliance Myths Myth #9 • Wrong. An individual will be Medicare eligible if they are:  65 years of age or older;  In receipt of Social Security Disability benefits for a period of 24 months or longer; or  Suffering from end-stage renal failure.

Medicare Compliance Myths

Medicare Compliance Myths Myth #8 • If my client or I query a claimant’s Medicare eligibility status on the CMS web site and the query is returned stating that there is no record of a claimant being a Medicare beneficiary, I do not have to worry about protecting Medicare’s interests.

Medicare Compliance Myths Myth #8 • Wrong. The query system is not infallible.  The right information needs to be put into the query system in order to obtain a valid query result.  Also, in workers’ compensation cases, if the claimant has a reasonable expectation of Medicare eligibility in the next 30 months, and the amount of the settlement exceeds $250,000, Medicare’s interests must be protected and a formal Medicare Set-Aside proposal must be sent to CMS.

Medicare Compliance Myths

Medicare Compliance Myths Myth #7 • In workers’ compensation cases, if the claimant is Medicare eligible but the amount of the settlement is less than $25,000, I do not need to worry about a Medicare Set-Aside.

Medicare Compliance Myths Myth #7 • Wrong. A workers’ compensation Medicare Set-Aside proposal must be submitted to Medicare in the following situations:  The claimant is currently Medicare eligible and the total amount of the settlement is greater than $25,000; or  The claimant has a reasonable expectation of Medicare enrollment within the next 30 months of the settlement date and the anticipated total amount of the settlement for future medical expenses and disability/lost wages over the life or duration of the settlement agreement is expected to be greater than $250,000.

Medicare Compliance Myths Myth #7 • However, CMS notes on its web site, in pertinent part, as follows: “CMS wishes to stress that this is a CMS workload review threshold and not a substantive dollar or ‘safe harbor’ threshold. Medicare beneficiaries must still consider Medicare’s interests in all WC cases and ensure that Medicare is secondary to WC in such cases. In other words, if the total settlement amount is $25,000 or less, the parties to the settlement are still required to consider Medicare’s interests. The recommended method to protect Medicare’s interest is to enter into a Medicare Set-Aside arrangement…”

Medicare Compliance Myths

Medicare Compliance Myths Myth #6 • In workers’ compensation cases, Medicare will not have a conditional lien because the insurer has been paying for the claimant’s medical treatment.

Medicare Compliance Myths Myth #6 • Wrong. Medicare can pay for a Medicare beneficiary’s medical expenses even if they are on workers’ compensation. Conditional liens can arise in some of the following situations:  The claim was initially denied and prompt payment was not being made by the primary payer for the claimant’s medical treatment related to the injury;  The provider sends bills directly to Medicare for reimbursement;  The claimant sends bills directly to Medicare for reimbursement.

Medicare Compliance Myths

Medicare Compliance Myths Myth #5 • If I am a primary payer under Section 111 Mandatory Reporting and I have an agent, I have no reporting responsibilities.

Medicare Compliance Myths Myth #5 • Wrong. Although an agent can act on a primary payer's behalf in reporting to Medicare on cases involving Medicare beneficiaries where there is a settlement, judgment, award or other payment, primary payers are still responsible for failure to properly report.  Primary payers and not agents will be charged $1,000 a day in penalties per claimant for failure to timely and properly report to Medicare.  What agents report is just as important as when they report.

Medicare Compliance Myths

Medicare Compliance Myths Myth #4 • When it comes to Medicare Set-Asides, a legal analysis of the claim is not necessary as Medicare only bases its decision on the medical records provided to it.

Medicare Compliance Myths Myth #4 • Wrong. Medicare will review judicial decisions and orders impacting the claim.  Legal analysis of the claim can help reduce the Medicare SetAside amount.  In Medicare’s sample submission under Section 25, it notes that it will review court/workers’ comp board documents.  Failure to include a legal analysis of the claim may result in the inclusion of medical treatment which is not related to the accepted claim.

Medicare Compliance Myths

Medicare Compliance Myths Myth #3 • I can wait until the end of the case to obtain conditional lien information from Medicare.

Medicare Compliance Myths Myth #3 • Wrong. Obtaining conditional lien information from Medicare can take approximately three months or longer. Instead,  Get the claimant to sign the appropriate release to obtain conditional lien information early on in the claim.  Once conditional lien information is received from Medicare, audit the information to see if there are charges that should not be included in the lien.

Medicare Compliance Myths

Medicare Compliance Myths Myth #2 • If I put settlement language in the release stating that I protected Medicare’s interests and have the claimant indemnify me in the event that Medicare’s interests are not protected, I have done my due diligence and Medicare cannot come after me for penalties and fees.

Medicare Compliance Myths Myth #2 • Wrong. Medicare is not bound by the parties’ settlement language.  Putting into the settlement release that you have protected Medicare’s interests is not enough. Language reflecting how Medicare’s interests were protected should be contained in the release.  Medicare can come after any party involved in the claim who did not protect its interests regardless of whether the release places the burden on the claimant.

Medicare Compliance Myths

Medicare Compliance Myths Myth #1 • If I need to find out if a claimant is Medicare eligible, I can simply ask the claimant or claimant’s counsel regarding his or her eligibility status.

Medicare Compliance Myths Myth #1 • Wrong. Oftentimes, the status of a Medicare beneficiary’s entitlement is unknown to both the claimant and claimant’s counsel.  Claimant may be awarded Social Security Disability benefits and be entitled to Medicare and is not aware that they are Medicare eligible or counsel is not aware of the Medicare eligibility requirements.  Obtaining the Social Security award/determination is imperative to confirming a claimant’s Medicare eligibility status.  Use discovery to your benefit in obtaining this information.  Create a Medicare file within your workers’ compensation file.

Medicare Compliance Myths

Case Law Updates • • • • •

Big R Towing v. David Wayne Benoit, et al. Zaleppa v. Seiwell Bradley v. Sebelius United States v. Stricker, et al. MARC – AJR 42 and HR 4796 (Medicare Advocacy Recovery Coalition)

QUESTIONS

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Contact Information

Charles G. Brown [email protected] 412-392-5204

Bridget Langer Smith [email protected] 412-392-5624

Katherine S. Gallagher [email protected] 412-392-5413