Personal Injury Medicare Liens-Other Issues

Personal Injury Medicare Liens-Other Issues-Advantage Plans

Many people subscribe to Medicare Advantage plans.  These are plans that are substitutes for Medicare.  They are approved by Medicare.  They provide the benefits under Parts A and B and may provide other benefits.

If the client has a Medicare Advantage plan, then you cannot rely upon the Medicare portal.  The portal may show that the case is closed or that there is a zero balance.  You may also receive a letter from Medicare saying that.  That’s because you don’t owe Medicare any money for this injury claim.  You may however owe the Medicare Advantage plan money.

These plans operate their own portals to recoup money.

Don’t Be Afraid To Challenge

There does exist a question as to whether or not they have a right of subrogation.  That may especially apply in a state like Virginia which has an anti-subrogation law.  In Virginia health insurance plans cannot subrogate.  As a result there is a question as to whether or not these plans can recover any money.

The question I believe is based upon the status/standing of these Medicare Advantage Organizations (MAO). In Humana v. Paris Blank LLP, 187 F.Supp 3d, 676, the court held a law firm liable for double-recovery for failure to pay the advantage plan. That case cited Potts v. Rawlings, 897 F.Supp 2d, 185, 196-197 (S.D.N.Y. 2012) which touched on the issue of whether state anti-subrogation laws may have been preempted by the MAOs right of recovery. That court indicated that preemption does apply. In MSP v. United, 60 F.4th 1314 (11th Cir. 2023), the court seemed to create an exception as to preemption insofar as an MAO is concerned. The MAOs based their recovery on 42 C.F.R. § 422.108.F which says that they will exercise the same rights of recovery that CMS exercises.

Further Research

I don’t think that squarely addresses the issue of whether or not a state anti-subrogation law is preempted vis a vis an MAO. Clearly it is as to CMS. The point to be made is that if confronted with a request for any substantial payment to an MAO, further research on their status/standing to preempt Virginia’s anti-subrogation law may be time well spent.

The two (2) issues that I believe have not been clearly answered by the case law are:

• Does an MAO have the same standing as CMS in terms of preempting state anti-subrogation laws?
• Is an MAO, unlike CMS, really just an insurance plan and therefore subject to state insurance laws since the USA typically defers to state law in regards to insurance issues?

Advantage Plan Lien Reductions

If you’re dealing with an advantage plan and there arises an issue of whether or not they will reduce their lien by the amount of the attorneys’ fees, as consistent with Medicare, you need to tread cautiously. The plans will take the position that they do not have to reduce. The arguments as to why they do have to reduce are:

• These plans avail themselves of the same recovery as Medicare Parts A and B and therefore they should be held to the same reduction;
• 42 C.F.R. § 411.37 cites reduction plans for Medicare;
• See 42 C.F.R. § 422.108.F.
• Ask them whether or not they can cite a case or a statute that says that the claimant does not get the same reduction formula as Parts A and B.

Personal Injury Medicare Liens-Other Issues-Medi-Gap Plans

Aside from Medicare and/or Medicare Advantage plans, many people may have Medi-Gap plans. A Medi-Gap plan picks up what Medicare Parts A and B do not cover and may also provide additional coverage. Those plans are just insurance plans and would be subject to Virginia’s anti-subrogation law.

Set Asides

In addition to paybacks, there may be a need for a Medicare set-aside.  A set-aside is a fund of money created out of the settlement to cover the future payments that Medicare may have to make on behalf of the client.  These set asides are required at this point only in workers’ comp cases.

Sometimes an insurance company will demand a set-aside in cases other than workers’ comp.  As of September 2019 you are not required to agree to such.  CMS however has indicated that it may be moving towards that. There are a number of companies that can help with set asides. One of them is Medivest. It can be found at medivest.com.  Another company is Synergy.  One contact there is Rod Santomauro, (202) 368-2520.

CMS Guidelines

Although Medicare set asides are not required in liability claims, they are mentioned in the CMS Guidelines listed on their website.  You should look at 42 U.S.C. 1395Y(b).  CMS will not pay for injury-related expenses after a liability settlement if you don’t have a set aside.  On the other hand, if you have a set aside and it runs out of money to pay for post-injury treatment, then CMS will pay the bills if it believes the set aside was adequate.  In a workers’ comp case, CMS has set forth very specific guidelines.  Unfortunately it has not done so in regards to liability claims.

Some people to potentially consult with about Medicare set-asides are Synergy, Joanna Wynes, Rothrock Settlement Consultants and John Cattie in Charlotte, NC.

Further factors

A few things to keep in mind in regards to set asides are:

• Some liability carriers are requiring letters from Medicare showing that there is no outstanding lien.  The only legal obligation of the liability carrier is to report the claim.  They have no other obligations and therefore no other rights.
• What will trigger Medicare’s interest in future treatment are the ICD codes.  These codes are the diagnosis codes. They are used by the doctors.  If the codes used for the injuries recur in the future, then Medicare may claim that future treatment is injury related.  Where it is injury related there may be a battle as to whether Medicare will pay for it.
• If you believe there will not be future treatment, then it makes sense to try to get a letter from the treating doctor. The letter should say that the treatment for the injury related to the settlement has been completed and future medical items and/or services for that injury will not be required. Furthermore it should say as of the date of the settlement future medical treatment for this injury will not be required.  With that letter in hand there is probably no need for a set aside in a liability case.
• With smaller liability claims under $25,000, if there has been no claim for future medicals, no award for such and likewise no basis for such, then there probably is no need for a set aside.
• The Medicare rules require that not only those people who are Medicare-eligible but that those who are reasonably expected to become Medicare-eligible have to comply with the rules.  That reasonable expectation of going on Medicare occurs if the person is less than 30 months out from such Medicare eligibility.
• Although MSAs are not required now in liability claims, if Medicare has future exposure, it probably makes sense to do a Medicare set-aside even though Medicare is not involved in it.  That way there is a fund of money established to protect Medicare and to protect you and the client.

Providers Refusing to Bill Medicare

Where this happens, you need to refer them to Va. Code § 8.01-27.5. If they refuse to bill Medicare, then they may lose their right to payment.

There are important things to keep in mind when you’re dealing with Medicare-participating providers:

1. During 120 days after the injury, Medicare can decide not to pay a claim because it looks like somebody else will step in and pay it.
2. Participating providers have 12 months after the treatment was provided to file a claim with Medicare. In the alternative, they can assert a lien or otherwise demand that the patient pay them. If the participating provider does not make their claim to Medicare within 12 months, then Medicare will not honor their claim. In addition, Medicare will require that the provider withdraw any claim or lien against the patient. See the Medicare memorandum dealing with this issue of November 2023.
3. When a provider submits a bill to Medicare, the provider is forever limited to the Medicare payment rate. This is true even if Medicare denies the claim or if the provider refunds Medicare.

Carriers Requiring Direct Payment

In some instances, liability insurance carriers will require that they pay Medicare directly. It makes sense to fight that. If the carrier however is adamant, then request that they sign an indemnification agreement, agreeing to indemnify you from liability in the event they don’t make the payment. Make sure that the release expressly says that they will timely pay the lien, be responsible for any penalties associated with delays and that it confirms that the amount being paid is based upon the final demand letter and not the Conditional Payment Letter.

Personal Injury Medicare Liens-Other Issues-Informing Medicare of Errors

Sometimes an instance will arise where you know that Medicare has made a mistake as far as what they are claiming. That is, they may be claiming too little. Is there an obligation to inform them? Your obligation is to exercise good faith. Medicare defines good faith as consisting of fully informing them of the accident details, providing complete settlement information and paying the final demand.

Medicare Demanding Payment by First Party Payor

Since Medicare is a secondary payor, they can on occasion demand payment by the first party payor. That may be a Med Pay carrier. It could also be a liability carrier. Most often it would be a Med Pay carrier. If they make such a demand, then go onto the portal to see if they have opened up a no-fault file. If they have, then have the no-fault carrier send in the exhaustion letter. It must come from the Med Pay carrier, not you. You probably also want to check with the provider to make sure that the outstanding balance has been adjusted to the Medicare repayment rate.

There are several other blogs on this site dealing with different types of liens:

• Personal injury liens
• Erisa liens miscellaneous
• Medicaid liens
• Medicare liens
• Erisa liens
• Tricare liens
• Workers comp liens

Seeking Legal Help for Medicare Issues

Call or contact us for a free consult. Also for more information on personal injury see the other pages on this site. For more information about Medicare see the page on Wikipedia.