Transcript Slide 1

2010 Medical
Professional Liability
Symposium
MMSEA Section 111 Reporting:
The Elephant in the Room?
Chicago, IL ~ March 18 & 19, 2010
MMSEA Section 111
Reporting: The Elephant
in the Room?
Moderator:
Jim Blinn, MBA, Principal, Advisen Ltd.
Panelists:
Samuel D. Carucci, Esq., US Casualty Claims Manager,
Allied World Assurance Company
Paul Lavelle, President, LVL Claims Services LLC
Mark Popolizio, JD, Vice President of Customer Relations, NuQuest/BridgePointe
Lindsay Turner, Esq., Senior Associate, Wiley Rein LLP
Session Overview
• Overview of MMSEA Section 111
• The Challenges of Section 111
• Claims Issues and Medical
Professional Liability Concerns
• Open Discussion
Overview of MMSEA Section 111
(Medicare, Medicaid, and SCHIP Extension Act of 2007)
Mandatory Insurer Reporting
Lindsay Turner
Wiley Rein LLP
[email protected]
www.wileyrein.com/section111
Chicago, IL ~ March 18 & 19, 2010
Why are you here?
• You fear those $1,000 a day penalties
for non-compliance with Section 111
• You know Section 111 will change
your company’s claims handling and
settlement practices
• You’ve heard CMS has changed the
rules AGAIN
• You were assigned the coveted job of
Section 111 Coordinator
Why did Congress Mandate
Section 111 Reporting?
1980 Medicare Secondary Payer (MSP) Statute made
P&C Insurers (also called Non- Group Health Plans
or NGHPs) the primary payers

Statute permits recoupment of Conditional Payments from:
• Medicare beneficiaries or their counsel
• Providers who receive payment from insurer settlements
• Private Insurers

Conditional Payments occur when Medicare pays because
• It doesn’t know an NGHP claim exists or that the claim has
been paid
• The NGHP claim won’t be resolved anytime soon
(Cont’d)
Why did Congress Mandate
Section 111 Reporting?
• Problems Remain:
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CMS has had limited success pursuing recovery
of Conditional Payments from beneficiaries
Medicare seldom learned about NGHP
settlements/claims payments
NGHPs have had little incentive to identify
themselves as primary payers or have not been
aware of claimant’s Medicare beneficiary status
Insufficient federal funds to ferret out NGHPs
• The Latest Fix: Section 111 Reporting
MMSEA Section 111:
A Quick Overview
• Who reports? Responsible Reporting
Entities (RREs) – typically the Insurer or
Self-Insured Entity
• What is reported? All settlements,
judgments, awards and other payments
made to Medicare beneficiaries
• As compensation for/in exchange for
release of: medical expenses

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Typically arising out of claims for bodily injury
But also claims for pain and suffering/emotional
distress
(Cont’d)
MMSEA Section 111:
A Quick Overview
• Why? Medicare may have paid medical
expenses related to these claimed injuries
• Both lump sum payments and payment of
future medicals must be reported

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
TPOC: Total Payment Obligation to the
Claimant
ORM: Ongoing Responsibility for Medicals
Structured settlements/Medicare Set Asides not
required
What Insurers?
What Policies?
• Section 111 requires “Applicable Plans” to
report
• Why? Applicable plans are the primary
plans under the MSP Statute and Medicare
wants a roadmap to recover conditional
payments
• For NGHPs this means:

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Liability carriers (including PL lines) and self-insured
entities
No-fault insurance carriers
Workers’ compensation plans and carriers
(Cont’d)
What Insurers?
What Policies?
• Major Issues Remain Unresolved


Potential exception for undefined professional
lines
Foreign insurers
• CMS doesn’t have regulatory powers under the
Constitution to require all foreign insurers to report

Multiple Defendant/Mass Tort Settlements
• Who reports?
• Claims payments excluded by 1980 MSP cut-off date?

No-Fault Policies
• CMS may be sweeping other policy types under this
umbrella
Reporting Timeline
• NGHPs do not begin reporting until First
Quarter 2011 (previously Second Q 2010)
• Push Back of Dates Triggering TPOC and
ORM Reporting:

TPOC Settlements: On or after October 1, 2010
(previously January 1, 2010)

ORM Settlements/Payments: Existing
responsibility as of January 1, 2010 (previously
July 1, 2009), regardless of initial date
responsibility was accepted
Who Must Report?
RRE Determination
• RRE determination is “fact and situational” specific
• CMS’ RRE directives contained in the 2/24/10 “Alert”
• Generally, RREs fall within the following classes:

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Carriers
Self insurance
• Deductible v. SIR key determinant per new RRE guidelines
Reinsurance, excess, umbrella, etc.
Fronting insurance
Joint pools/JPAs
State assigned claims funds
Bankruptcy & liquidation
• TPAs & RRE status
• Role and limitations of Section 111 “reporting agents”
• Specific issues and considerations
Determining Medicare
Status
RREs required to determine CL’s Medicare status
• However, Section 111 does:
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NOT provide the process or procedure to use
NOT require CL and/or his/her lawyer to release necessary
information to help make this determination
NOT provide an informed consent provision.
• Issues & Considerations


RREs must develop practice and protocol directed at
determining Medicare status
CMS’ Query Function & Model Language
• Operating Mechanics
• Limitations
• Safe Harbor & Due Diligence Protections?
Section 111 “Reporting
Triggers” & Exceptions
• Section 111 Reporting – In general
• When Must I Report?
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Two Reporting Triggers
1.
2.
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TPOC v. ORM
TPOC reporting exceptions:
•
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Total Payment Obligation to the CL ---- TPOC 10/1/10
Base Date
On-Going Responsibility for Medical --- ORM 1/1/10
Base Date
Interim Monetary Thresholds
ORM reporting exceptions:
•
•
•
Qualified
Special
WC
Section 111 “Reporting
Triggers” & Exceptions
Issues & Considerations

Determining TPOC Date

“Assuming” ORM

“Terminating” ORM
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Look Back Period

Risk Management Write Offs, Gift Cards,
Good Will Gestures, etc.
Mass Torts
• Reporting
▫ Cost of reporting v. costs of not reporting
▫ Claim balance
• Defense Counsel
▫ Collecting data
▫ Protecting notice
• Settlements
▫ Use of trusts (468B)
17
Structured Settlements
• Data Collection
▫ Use of a third party
▫ Resistance from plaintiff?
• Future Medicals
▫ Future CMS and the never ending trip
18
Medical Professional Liability
• The claim within a claim within a claim
and multiple reporting.
• How these cases will gum up the
works.
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Open Discussion
Chicago, IL ~ March 18 & 19, 2010