Transcript TO SETTLE OR NOT TO SETTLE? THAT IS THE MEDICARE QUESTION

TO SETTLE OR NOT TO
SETTLE? THAT IS THE
MEDICARE QUESTION
Presented to
DRI TRUCKING LAW SEMINAR
February 16-17, 2012
Jay Barry Harris, Esquire
FINEMAN KREKSTEIN & HARRIS
Chuck Perry, Corporate Director of Claims
KNIGHT TRANSPORTATION
RECENT DEVELOPMENTS
IMPACTING SETTLEMENTS
HARO VS. SEBELIUS
CMS cannot require prepayment of its
interest while appeal or waiver is pending
 Interest accrues
 Plaintiff’s counsel cannot be held
responsible for disbursing settlement
proceeds
 Primary payer can be held responsible

HADDEN VS. UNITED STATES
Medicare entitled to complete
reimbursement
 No fault allocation
 Settlements become more difficult
 Impact of Joint and Several Liability

BRADLEY V. SEBELIUS
Medicare not entitled to complete
reimbursement
 Medicare not entitled to any share of the
surviving child’s claim
 Chilling effect on settlements

CMS REGULATIONS
AND ALERTS








$300 threshold
Med pay, gift cards, etc.
Physical based trauma
Lump sum
No other benefits expected
Medicare has not issued a recovery
demand letter
Insurer has not paid medical bills
Effective September 2011
$5000 LIABILITY SETTLEMENT FIXED PERCENTAGE OPTION





Pay Medicare 25% of the settlement
Physical based trauma
Medicare has not issued a demand letter
No other payments anticipated
Effective November 2011
SELF-CALCULATED FINAL
CONDITIONAL PAYMENT AMOUNT






Physical trauma based injury
$25,000 maximum settlement
Date of loss at least six months before
submission of proposed conditional
amounts to Medicare
Treatment completed
No medical treatment in past 90 days
Effective February 2012
LIABILITY SET ASIDES
ARRANGEMENT

Treating physician certifies treatment is
completed as of date of settlement
◦ Incur additional cost
◦ Who pays?
Submitting a certification for review and
approval no longer necessary
 Confirms notion that LMSAs are
required in liability cases?
 Effective October 2011

PRIMARY PAYER’S DILEMMA
Cannot assert Medicare’s right to
reimbursement
 Only U.S. government is authorized to
assert Medicare’s right after demand
letter issue
 Cannot delay payment of settlement
proceeds pending Medicare’s response
 The Zaleppa and Wilson quandary

CONFIRMING MEDICARE
STATUS

Pre-suit
◦
◦
◦
◦

Authorization
Obligation to unrepresented party
Do not use information for any other purpose
Safe harbor language
Litigation
◦ Discovery
◦ Motion to compel
MEDICARE’S INTEREST
UNKNOWN AT SETTLEMENT
Request conditional payment
 Set aside an amount to cover Medicare’s
interest
 Hold harmless language in the release

PLAINTIFF DISPUTES MEDICARE’S
INTEREST AT SETTLEMENT
Pay undisputed amount and escrow the
remainder
 Release language

◦ Medicare obligated to be paid in 60 days from
settlement
◦ Plaintiff provides Medicare’s final notice
within 45 days of receipt of settlement funds
◦ After 45 days, primary payer pays Medicare
directly
PLAINTIFF DEMANDS FULL AMOUNT
OF SETTLEMENT WITHOUT REGARD
TO MEDICARE’S INTEREST





Notify CMS
Pay undisputed amount
Seek judicial involvement
Pay full amount with protective language
in the release
Refuse to pay; continue the litigation
RESOLVING CASES WHERE
FUTURE MEDICAL TREATMENT
IS UNCERTAIN
PLAINTIFF’S CONDITION GUARDED RELEASE LANGUAGE






Maximum medical improvement
IME report – no future treatment needed
Plaintiff does not anticipate need for
future treatment
Plaintiff confirms that settlement monies
to be used for future treatment
No attempt to shift burden to CMS
Court approval, if possible
PLAINTIFF AGREES TO LMSA
Evaluate all physician reports (plaintiff
and defendant) and life care plans
 Reduce future care to present value
 Submit to CMS
 Seek court approval

◦ Smith v. Marine Terminals of Arkansas
◦ Guidry v. Chevron
PLAINTIFF REJECTS
NEED FOR LMSA





Educate plaintiff’s counsel
Evaluate need for LMSA by independent
third-party
Notify plaintiff’s counsel of need for
LMSA
Seek court approval
Take case to verdict
SOME SUGGESTED CLAUSES
FOR LMSA RELEASE





Plaintiff’s injuries may be permanent and
progressive and recovery uncertain
Plaintiff may need future treatment
Plaintiff will set aside monies to solely
pay for medical treatment
Plaintiff provides proof of set aside
Plaintiff will not seek payment from
Medicare until set aside exhausted
SUMMARY

Monitor
◦ CMS Regulations and Alerts
◦ Case law
◦ Legislation

Release Language is Critical
◦ Maximize your client’s protection
◦ Document the good faith efforts