to settle or not to settle? that is the medicare question presented to dri trucking law seminar...
TRANSCRIPT
TO SETTLE OR NOT TO SETTLE? THAT IS THE MEDICARE QUESTION
Presented to DRI TRUCKING LAW SEMINAR
February 16-17, 2012Jay Barry Harris, Esquire
FINEMAN KREKSTEIN & HARRISChuck Perry, Corporate Director of Claims
KNIGHT TRANSPORTATION
HARO VS. SEBELIUS
CMS cannot require prepayment of its interest while appeal or waiver is pending
Interest accruesPlaintiff’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 allocationSettlements become more difficultImpact 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 REGULATIONSAND ALERTS
$300 thresholdMed pay, gift cards, etc.Physical based traumaLump sumNo other benefits expectedMedicare has not issued a recovery
demand letterInsurer has not paid medical billsEffective September 2011
$5000 LIABILITY SETTLEMENT - FIXED PERCENTAGE OPTION
Pay Medicare 25% of the settlementPhysical based traumaMedicare has not issued a demand letterNo other payments anticipatedEffective November 2011
SELF-CALCULATED FINAL CONDITIONAL PAYMENT AMOUNT
Physical trauma based injury$25,000 maximum settlementDate of loss at least six months before
submission of proposed conditional amounts to Medicare
Treatment completedNo medical treatment in past 90 daysEffective 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 paymentSet aside an amount to cover Medicare’s
interestHold 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 CMSPay undisputed amountSeek judicial involvementPay full amount with protective language
in the releaseRefuse to pay; continue the litigation
PLAINTIFF’S CONDITION GUARDED - RELEASE LANGUAGE
Maximum medical improvementIME report – no future treatment neededPlaintiff does not anticipate need for
future treatmentPlaintiff confirms that settlement monies
to be used for future treatmentNo attempt to shift burden to CMSCourt approval, if possible
PLAINTIFF AGREES TO LMSA
Evaluate all physician reports (plaintiff and defendant) and life care plans
Reduce future care to present valueSubmit to CMSSeek court approval◦Smith v. Marine Terminals of Arkansas◦Guidry v. Chevron
PLAINTIFF REJECTSNEED FOR LMSA
Educate plaintiff’s counselEvaluate need for LMSA by independent
third-partyNotify plaintiff’s counsel of need for
LMSASeek court approvalTake case to verdict
SOME SUGGESTED CLAUSES FOR LMSA RELEASE
Plaintiff’s injuries may be permanent and progressive and recovery uncertain
Plaintiff may need future treatmentPlaintiff will set aside monies to solely
pay for medical treatmentPlaintiff provides proof of set asidePlaintiff will not seek payment from
Medicare until set aside exhausted