West Virginia attorney Paul Harris is learning the hard way that you don't mess with Uncle Sam's efforts to get reimbursement of Medicare conditional payments.

Harris's client was injured by an allegedly defective ladder. Harris sued the retailer of the ladder and settled for $25,000.  Medical expenses for the injury had been paid by Medicare to the tune of $22,000 and change.  Medicare was never reimbursed by Harris or his client.

The Centers for Medicare and Medicaid Services (CMS) started enforcement proceedings, namely a federal court suit against attorney Harris to get reimbursement.  The case is pending in the United States District Court for the Northern District of West Virginia.  Mr. Harris filed a motion to dismiss, arguing that as an attorney for the Medicare beneficiary, he had no duty to protect Medicare's interest and is not liable for failing to reimburse Medicare. The judge assigned to the case disagreed.

U.S. District Court Judge Frederick Stamp, Jr. denied Harris' motion on November 13, 2008.  In his written opinion Judge Stamp ruled that a lawyer can be held individually liable under 42 USC section 1395y(b)(2) when he or she distributes settlement funds without satisfying an existing Medicare reimbursement right.

The court cited approvingly the language of 42 CFR section 411.24(g) which provides that Medicare can recover from any entity that receives payment from a primary payer, including the beneficiary, a medical provider, a supplier, a physician, a state agency, a private insurer OR AN ATTORNEY.  Mr. Harris is an attorney. When the ladder retailer (who became a primary payer as soon as it paid the settlement) sent the settlement check to Mr. Harris and the check proceeds were distributed, Mr. Harris received an attorney fee. He thus became an entity that received payment from a primary payer, thus making him personally liable to Medicare.

The morale of the story:  even the little cases require care in dealing with Medicare liens, and attorneys cannot leave it up to someone else to deal with the issue.

The Baltimore-based Centers for Medicare and Medicaid Services (CMS) is playing Santa Claus to U.S. software programmers this year.  New CMS rules implementing the Mandatory Insurer Reporting law (Public Law 110-173) passed by Congress late in 2007 will require thousands of U.S. insurers and self-insured companies to engage software programmers to make big changes to the complex computer programs by which workers’ compensation, liability, no fault and group health claims are administered.

 

The MIR law requires all U.S. companies that insure or self-insure workers’ compensation, liability, no fault and group health claims to begin reporting data on all claims involving Medicare beneficiaries during 2009. That reporting will be electronic-only and will require factual information that most of the thousands of existing claims handling systems do not current capture.

 

Reporting entities will need, for example, to tell the feds about each Medicare beneficiary’s injury - including medical diagnosis, body part involved and cause of injury. The medical diagnosis must be reporting using the International Statistical Classification of Disease (ICD-9) codes.  The body part and cause of injury information must be reporting using the Workers Compensation Insurance Organization (WCIO) codes.  A vast majority of existing claim systems do not currently capture ICD-9 or WCIO codes.

 

According to the U.S. Bureau of Labor Statistics the job prospects of computer programmers has been declining in recent years. But with all the thousands of claim systems that will need to be reprogrammed quickly to meet the new CMS reporting requirements, those prospects have to looking a lot better for the near future.

For more info on MIR, visit www.gullenlaw.com.

 

Parties to personal injury claims of Medicare beneficiaries who continue ignoring their duties to the federal government could get a wake up call next year. Like Santa, Uncle Sam is making a list and checking it twice; going to find out who’s naughty and nice.

The Centers for Medicare and Medicaid Services (CMS) apparently believes that the parties to personal injury claims of government healthcare beneficiaries are neglecting to meet their duties under federal law. Such as the duty to report the claim. And the duty to reimburse Medicare for payments it made for medical treatment arising out of the injury underlying the claim.

Around Christmas 2007 Congress passed and President Bush signed into law Public Law 110-173, the Medicare, Medicaid and SCHIP Extension Act of 2007, now frequently referred to as the Mandatory Insurer Reporting law (or MIR) - 42 USC sec. 1395y(b)(7) and (8). Under the new law group health, workers’ compensation, liability and no fault insurers and self-insurers will be required to provide information to CMS-beginning in 2009- on each claim of a Medicare, Medicaid or SCHIP beneficiary. Triggers for reporting include a decision to honor a claim and issuance of a check to pay a settlement, judgment or award.

Once that reporting is done, CMS will have a quick and easy list of which of its beneficiaries received a settlement for an injury claim, what type of injury was suffered and who the settling party was. That will be very helpful information, making it easy to determine:

· Whether CMS made any payments for treatment of that same injury, and

· Whether the parties to the settlement made arrangements to reimburse CMS for any payments it made for that treatment, and

· If no reimbursement was made, who CMS can go after to get reimbursement, and

· Who CMS can go after to collect the penalties ($1,000 per claim per day’s delay in reporting and double damages for failing to reimburse conditional payments.)

Even before the December 2007 amendment to the Medicare Secondary Payer law, Congress made clear it was not going to listen to any quibbling about lack of liability on the underlying personal injury claim. Under the existing law, if an insurer or self-insured enters into a settlement of the personal injury claim, that insurer/self-insured is primary to Medicare for medical expenses related to that injury.

Uncle Sam is looking for a little cash to help fund the Medicare trusts, and with the new reporting that will start in 2009, he is expected to have no trouble finding lots of new pockets to dip into to help keep those trusts going.