daniel.anders, Author at Tower MSA

Tower MSA Partners Sponsored WCI-TV Highlights WC Leaders at the 2018 WCI Conference

August 23, 2018

Tower MSA Partners was pleased to once again sponsor WCI-TV at the recently concluded 2018 WCI Educational Conference. Following last year’s theme, which explored opioids in WC claims, this year Tower MSA featured interviews with the preeminent professionals in the Workers’ Compensation Industry on the topic of Knocking Down Barriers to Settlement of Claims.

Tower MSA invites you to watch these short and informative interviews from these leaders in the field of Workers’ Compensation:

Anne Alabach, Workers’ Compensation Department Manager, CPC Logistics

Quick take: “We try to be transparent with our drivers from the onset of a claim.”
See Anne’s full interview here.

Dan Anders, Chief Compliance Officer, Tower MSA Partners

See Dan’s interview introducing the WCI-TV theme of Knocking Down Barriers to Settlement of Claims here.
See Dan’s interview providing a synopsis of lessons learned from the WCI-TV interviewees here.

Kimberly George, Senior Healthcare Advisor, Sedgwick Claims Management Services

Quick take: “The earlier you can begin talking about settlement the better, we shouldn’t be afraid of that.”
See Kimberly’s full interview here.

Andy Olwert, President, Next Level

Quick take: “Treat the injured worker the way we would like to be treated”
See Andy’s full interview here.

Michael Stack, CEO, AMAXX, LLC.

Quick take: Michael Stack highlighted the importance of leveraging vendor partners to identify claims ready for settlement
See Michael’s full interview here.

Marques Torbert, CEO, Ametros

Quick take: Marques Torbert explains how being an advocate for the injured worker can knock down barriers to settlement.
See Marques’ full interview here.

Mark Walls, Vice President of Communications and Strategic Analysis, Safety National

Quick take: “The time to control your medical costs isn’t when you are trying to settle your claim, its well before that.”
See Mark’s full interview here.

NAMSAP Bulletin Highlights Meeting with CMS on Liability MSA Reviews

August 16, 2018

man holding transparent icons of people with stakeholder in the center

Recently, the National Alliance of Medicare Set-Aside Professionals (NAMSAP) released a Special Edition Bulletin providing insight into a meeting between CMS and NAMSAP representatives on the topic of the planned expansion of the Workers’ Compensation MSA review process to liability MSA Reviews. NAMSAP’s April 2018 meeting was one of several with stakeholder organizations.

Your writer was one of the NAMSAP representatives who had the privilege of meeting with CMS to hear and discuss how such a Liability MSA Reviews may work. Mr. Tom Stanley, the Co-Chair of NAMSAP’s Liability Committee provided a summary of the following meeting highlights in the bulletin:

CMS stated they have an 18-month timeframe (from April 2018) before it rolls out a LMSA Review program.
The program would be voluntary.
CMS has indicated that their enforcement mechanism is the denial of services.
CMS felt strongly that the injured party must receive something (free and clear) through settlement.
CMS would not review an LMSA until Settlement has been reached.
CMS feels a LMSA is exclusively the responsibility of the plaintiff.
Regarding LMSA’s, CMS made it clear that the defendant(s), and their insurers, are not a target.
Medicare pricing of services was discussed.
CMS does not feel it can mandate professional administration.
CMS would publish a LMSA Reference Guide.
Eligibility remains the same as the current WCMSA system – Medicare beneficiaries or injured parties who have a reasonable expectation of Medicare eligibility within 30 months. Per statute, Medicare’s interest must be considered in every claim.
A workload threshold of $250,000 is anticipated – “NO SAFE HARBOR”. This level mirrors the $25,000 workload threshold for WCMSA’s.
For settlements between $250,000 and $750,000 threshold, CMS approval is available and encouraged by CMS. CMS would apply “a formula” to determine the LMSA amount. Starting with the total settlement amount, CMS would subtract certain expenses and apply the discount factor to total settlement.
Above $750,000 level is a full commutation. A traditional MSA would be prepared and, if submitted to CMS, evaluated by CMS for adequacy.

As Mr. Stanley advised, “everything discussed in the meeting was subject to change and related to liability Medicare Set-Asides only.” I would like to emphasize that point as well. You should not in anyway take the above points as final, rather they are points of discussion as CMS continues to listen to stakeholders and assess the best method for protecting Medicare’s interests in post-liability settlement injury-related medical.

Importantly, CMS realizes that in protecting those interests an eventual voluntary LMSA review process must continue to provide an incentive for the parties to settle their case. Consequently, some type of apportionment to ensure the plaintiff receives a portion of the settlement monies is expected in any final review process.

NAMSAP will to continue to dialogue with CMS and also discuss with its membership, both through a webinar and at the annual conference, the points presented by CMS. Given the launch of a CMS LMSA review process is not expected for some time, Tower MSA Partners will shortly be releasing a white paper on best practices for addressing future medicals in liability settlements.

If you have any questions or would like to discuss the topic of LMSAs further, please contact Dan Anders, Chief Compliance Officer, at 888.331.4941 or Daniel.anders@towermsa.com.

Related:

Liability Settlement Solutions

TOWER MSA PARTNERS SPONSORS WCI-TV

August 14, 2018

Tower MSA Partners brings you WCI-TV, the televised coverage of the WCI Conference (Aug. 19-22). Be sure to tune into WCI-TV in the conference hall or your hotel or while shuttling back and forth for insights on the topic of Knocking Down Barriers to Settlement of Claims. #WCI2018

Read it here

CMS to Host Webinar on Benefits of Medicare Secondary Payer Recovery Portal (MSPRP)

August 2, 2018

CMS recently announced it is hosting a webinar on Thursday, August 16, 2018, at 1:00 PM ET to “present the benefits of using the MSPRP.” The webinar will also include an update on the new MSPRP features which Tower MSA highlighted in a recent article, Enhancements to MSPRP Improve Conditional Payment Processes.

A link to the webinar registration information can be found here.

Note, we attempted to register using the registration information provided but received an error message. We are unclear whether this is a technical error on the past of CMS or registration is not allowed until shortly before the webinar is to begin. We have requested clarification from CMS, but we suggest assuming that logging in is not allowed until shortly before the webinar is set to begin.

We encourage anyone who regularly uses the MSPRP or is considering using the MSPRP to attend the webinar.

Enhancements to MSPRP Improve Conditional Payment Processes

July 27, 2018

Since its introduction six years ago, the Medicare Secondary Payer Recovery Portal (MSPRP) has increasingly become more reliable and useful in communicating to and receiving information from the Medicare conditional payment recovery contractors (BCRC and CRC). Earlier this month, a revised version of the MSPRP User Guide was released (Version 4.2) and provided for further enhancements to the portal:

To reduce the number of calls received by the BCRC regarding the status of case correspondence, a new read-only Letter Activity tab has been added to the Case Information page, which displays correspondence that has been received or letters that have been sent related to a Benefits Coordination & Recovery Center (BCRC) or Commercial Repayment Center (CRC) case (Section 13.1.1).
To make MSPRP more consistent so that both insurers and beneficiaries (and their representatives) can request electronic letters, the MSPRP now allows insurers, recovery agents on the Tax Identification Number (TIN) reference file, and insurer representatives with a verified Recovery Agent Authorization, who also log in using multi-factor authentication, to request electronic conditional payment letters (eCPLs) for BCRC and CRC insurer-debtor cases (Sections 13.1.5 and 14.5.4). Note: eCPLs may also be requested on cases that are in bankruptcy.
To help Account Managers (AMs) determine which currently active designees should be deleted because of long inactivity on an account, a Last Login Date column has been added to the Designee Listing page (Section 8.3.2).
In cases where Part A, non-inpatient, claims do not have a HCPCS or DRG code associated with them, the Primary Diagnosis Code will appear on the Payment Summary Form (PSF), in bold, under the DX Codes column, along with an explanatory footnote. When the Primary Diagnosis Code is bolded, the HCPCS/DRG column will be blank (Table 13-8).

Practical Implications

Tower MSA staff often spend hours on the phone with the CRC and BCRC to ensure correspondence, such as an authorization, was received and that a matter is progressing to completion. The addition of a Letter Activity tab confirming correspondence has been received and acted upon is a significant benefit as long as the recovery contractors properly update it with the most current documentation received.

Additionally, the ability for an insurer or Tower MSA, on behalf of an insurer, to request an electronic conditional payment letter (eCPL) provides for a more expeditious turnaround time in obtaining this letter which is otherwise sent through the mail. Previously, eCPLs were only available to Medicare beneficiaries.

Update on New Commercial Repayment Center

Since the transition from CGI Federal to Performant Financial as the CRC contractor in February 2018, Tower MSA has encountered a reasonably quick turnaround time (Less than 30 days) in receiving Medicare conditional payment information. Interestingly, in the first few months following the contractor transition the CRC had been issuing Conditional Payment Letters (CPLs), rather than the Conditional Payment Notices (CPNs) (The difference being that a CPL does not have a 30 day time-frame to dispute conditional payments, nor is it followed by a Demand Letter). However, we are now seeing the CRC again issuing CPNs followed by Demand Letters.

While obtaining an itemization of Medicare conditional payments has been a smooth process with the new contractor, the same cannot be said for disputes and appeals of those conditional payments. Our understanding is the new contractor inherited a backlog of these disputes and appeals and has been working through them which has added to the time needed to process new disputes and appeals (Hence the likely reason CPLs were issued rather than CPNs in the first few months of the new contractor). Some disputes and appeals are pending for more than 60 days. Additionally, there have been systematic issues at the CRC resulting in lost disputes/appeals, demand letters issued while disputes are pending and matters prematurely being referred to the Treasury Department for collection activities.

Tower MSA has been advised by Performant that it is continuing to reduce the backlog of dispute and appeal submissions while also addressing the systematic problems. We are optimistic the portal enhancements and Performant acting to reduce the backlog and the systematic challenges will increase the efficiency of the conditional payment process over time. Tower MSA will continue to monitor these processes and when warranted reach out to the CRC to request corrective action be taken.

New Medicare Numbers to Have Limited Impact on MSP Compliance Processes

July 12, 2018

sample image of a Medicare Health Insurance card

Since April 2018 the Centers for Medicare and Medicaid Services (CMS) has been issuing new Medicare identification numbers to some 60 million active Medicare beneficiaries. Pursuant to the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, a Medicare Beneficiary Identifier (MBI) is replacing the Social Security Number (SSN) based Health Insurance Claim Number (HICN) on all Medicare cards issued to beneficiaries. An MBI is a unique, randomly generated alphanumeric identifier which will no longer include any portion of a person’s SSN. The primary reason the identifiers are being replaced is to limit identity theft associated with use of SSNs in Medicare IDs.

The process of issuing new Medicare cards with MBIs is to be completed by April 2019. Medicare beneficiaries and medical providers requesting payment by Medicare can continue to use either the HICN or MBI through December 31, 2019. However, as of January 1, 2020, Medicare beneficiaries and medical providers must use the MBI to access Medicare-covered medical care and when requesting payment by Medicare for such care.

Limited Impact on MSP Compliance

While the statute requires CMS remove the SSN from Medicare IDs, it leaves an exemption allowing CMS to continue to utilize SSNs for purpose of Medicare Secondary Payer data exchanges and processes. Accordingly, for purposes of Section 111 Mandatory Insurer Reporting, Responsible Reporting Entities (RREs), may continue to use SSNs, HICNs or MBIs post January 1, 2020. However, when querying a claimant for Medicare beneficiary status or otherwise updating a report, if an MBI has been issued to the beneficiary, then the response file from CMS will be the MBI, not the HICN.

In regard to communication with the Benefits Coordination and Recovery Center (BCRC) and Commercial Repayment Center (CRC), SSNs, HICNs or MBIs may be utilized to ID the beneficiary. Correspondence from these entities, such as Conditional Payment Letters and Demands, will include either an HICN or MBI, depending upon the beneficiary ID which was most recently reported.

As for communication with the Workers Compensation Review Contractor pertaining to MSA submissions, SSNs, HICNs or MBIs may be utilized. Correspondence from the WCRC/CMS will include whatever beneficiary ID was submitted with the MSA proposal.

From a practical standpoint, what employers, carriers and other payers need to be aware of is they will increasingly be seeing these MBIs from claimants and responses from CMS and CMS contractors.

Tower MSA Partners will continue to monitor the transition from HICNs to MBIs and its impact on the MSP process. Any relevant updates will be provided with a breakdown of the implications to your practices and processes. If you have any questions please contact Dan Anders, Chief Compliance Officer, at 888.331.4941 or Daniel.anders@towermsa.com.

U.S. Attorney Recovers Against Plaintiff Attorney for Failure to Reimburse Medicare

July 2, 2018

close up of judge's gavel with the scales of justice in the background

A Philadelphia personal injury firm and its principal recently entered into a settlement agreement with the U.S. Attorney for the Eastern District of Pennsylvania to pay a lump sum of $28,000 for repayment of Medicare conditional payments. The June 18, 2018 press release from the U.S. Attorney’s Office explains that the law firm, Rosenbaum & Associates, and its principal, Jeffrey Rosenbaum, Esq., allegedly failed to reimburse this amount to Medicare stemming from nine settlements handled by the firm.

According to the release, Rosenbaum agreed to enter into a settlement with the federal government requiring not only reimbursement of the conditional payments but also to:

(1) designate a person at the firm responsible for paying Medicare secondary payer debts;

(2) train the designated employee to ensure that the firm pays these debts on a timely basis; and

(3) review any outstanding debts with the designated employee at least every six months to ensure compliance.

Rosenbaum also acknowledged as part of the agreement that “any failure to submit timely repayment of Medicare secondary payer debt may result in liability for the wrongful retention of a government overpayment under the False Claims Act.”

Practical Implications

This is another shot across the bow to plaintiffs’ attorneys warning them of their obligation under the Medicare Secondary Payer Act to ensure Medicare is appropriately reimbursed out of the settlement funds. Medicare regulations are clear in stating under 42 CFR 411.24 (g): “CMS has a right of action to recover its payments from any entity, including a beneficiary, provider, supplier, physician, attorney, State agency or private insurer that has received a primary payment.”

In regard to implications of this decision going forward, U.S. Attorney William M. McSwain said, “When an attorney fails to reimburse Medicare, the United States can recover from the attorney—even if the attorney already transmitted the proceeds to the client. Congress enacted these rules to ensure timely repayment from responsible parties, and we intend to hold attorneys accountable for failing to make good on their obligations.”

The provisions of the settlement agreement act as a roadmap for plaintiffs’ attorneys in ensuring Medicare conditional payments are properly resolved as part of settlement. For further consultation on Medicare conditional payment best practices in liability settlements, please contact Dan Anders, Chief Compliance Officer, at 888.331.4941 or Daniel.anders@towermsa.com.

Proposed PAID Act Intends to ID Medicare Part C, Part D and Medicaid Enrollees for Insurers

June 1, 2018

On 5/18/2018, the Provide Accurate Information Directly Act (or the proposed PAID Act) was introduced in Congress for the purpose of allowing settling parties an easy method to identify if a claimant is enrolled in a Part C or D plan or Medicaid. The bill, H.R. 5881, sponsored by U.S. Rep. Gus Bilirakis R-Fla and U.S. Rep. Ron Kind, D-Wisc, requires the Centers for Medicare and Medicaid Services (CMS) to share information on not only whether a claimant is a Medicare beneficiary, but also whether the claimant is enrolled in a Part C Medicare Advantage (MA) Plan, Part D Prescription Drug Plan or Medicaid. It also requires CMS to provide the identity of the MA or Part D Plan or state Medicaid program in which the claimant is or was enrolled.

The catalyst for this legislation comes from stepped up efforts by these various plans and programs, especially by MA Plans, to seek reimbursement from settling parties. MA Plans have largely prevailed against insurance carriers in seeking reimbursement under the Medicare Secondary Payer Act which has led to a heightened awareness of the potential for such claims and the need to identify claimants enrolled in such plans and programs prior to settlement.

While liability and no-fault carriers and workers’ compensation plans are now on notice of the potential for such reimbursement claims, there presently exists no universal method to identify a claimant’s enrollment status, short of asking the claimant. Accordingly, the bill provides a solution by requiring CMS to share such enrollment information.

A review of the proposed PAID act shows the enrollment information would be shared through the Section 111 Mandatory Insurer Reporting query process. In short, along with identification of whether a claimant is a Medicare beneficiary, the query response would also provide whether the claimant is or has been enrolled in a MA or Part D Plan or a state Medicaid program for the past three years and the name of the plan or program. The insurance carrier or self-insured entity would then be able to readily contact the Part C or D plan or Medicaid program to resolve any claim for reimbursement.

The bill was referred to the Committee on Ways and Means and the Committee on Energy and Commerce for further action. Tower MSA Partners will provide updates on the legislation when warranted.

Transition From Provider Resources to Capitol Bridge: 45 Day Update

May 7, 2018

On March 16, 2018, Capitol Bridge took over responsibility from Provider Resources as the Centers for Medicare and Medicaid Services’ (CMS) Workers Compensation Review Contractor (WCRC) (See New CMS MSA Review Contractor: Different Name, Same Policy and Procedures). The WCRC is responsible for reviewing all Workers’ Compensation Medicare Set-Asides (WCMSAs) submitted to CMS by providing a recommendation as to whether the WCMSA should be approved as proposed or increased or decreased. CMS then issues a determination letter based upon that recommendation.

We are now 45 days into the new WCRC contractor and have sufficient results from our MSA submissions to report on what has changed and what has remained the same:

Review Time: The prior WCRC was on average completing its review with a determination letter issued within 14 to 21 days from the date the WCMSA proposal was submitted. We were warned on March 7, 2018, CMS webinar introducing the new WCRC that the contractor would be using the full 20 business days allowed for review under the contract with CMS. Indeed, CMS was spot-on, as the time from submission of the WCMSA proposal to receipt of the determination letter now stands at approximately 28 to 30 days.

Development Letters: Development Letters, requests for additional documentation or information, are being issued between 21 and 28 days post-MSA submission, compared to nine and 15 days with the prior contractor. This is consistent with the overall review time of up to 30 days.

While the time for Development Letter issuance has increased, we have only found a slight uptick in the amount of Development Letters being issued. And even this uptick has been caused by Development Letters issued in error, i.e. request for documentation that has already been provided.

Review Policies and Procedures: On the March 7, 2018 webinar CMS advised that there would be no changes to their WCMSA review guidelines with the introduction of the new contractor.

The new WCRC has mostly followed the review guidelines, however, we have found an increase in pricing and frequency errors and the inappropriate addition of medical care on some WCMSA determinations.

Tower MSA can readily identify these errors through its Advanced CMS MSA Reconciliation System. Within 48 hours of receipt of a CMS MSA counter-higher, the following process occurs:

A line item comparison is systematically made between the Tower MSA proposed WCMSA and the CMS WCMSA determination to detect changes in pricing, frequency and the addition or modification of medical treatment and medications
Tower MSA’s clinical and legal team reviews the reconciliation to determine any reasonable basis for submission of a re-review to CMS.
If appropriate, re-review prepared and uploaded to CMS.

Client advised of CMS’s response and whether a re-review has been submitted.

The results and value of this process can be shown in two successful re-reviews from the past month:

WCMSA counter-higher as a result of a change in pricing of urine drug screens increased the MSA by $4,245. Tower MSA’s Reconciliation System identified the error in pricing and a re-review request letter was submitted.CMS responded by correcting its error resulting in a WCMSA amount approved as submitted.
WCMSA counter-higher as a result of CMS changing a shoulder arthroscopy to a total shoulder arthroplasty, a $23,901 increase to the MSA. Again, Tower MSA’s Reconciliation System, along with the legal and compliance team, identified CMS’s error and a re-review request was promptly submitted. CMS admitted that indeed while a total shoulder arthroplasty had been discussed in the records, the most recent recommendation from the treating physician was for an arthroscopy. The error was corrected and the WCMSA amount was approved as submitted.

In terms of time to complete a re-review, the new WCRC is taking between 16 and 21 days compared to the prior contractor which took between two and six days. The new WCRC should be credited with correcting errors when brought to their attention.

We also applaud the new WCRC for using the most recent state fee schedules in their review of the proposed WCMSA. While CMS guidelines require the most recent fee schedules to be used in the WCMSA, the prior contractor was often using outdated fee schedules, which were up to seven years out-of-date. The result was sometimes inappropriate counter-higher our counter-lower determinations from CMS.

Practical Implications

You can rest assured that if the new WCRC makes an error it will be identified by Tower MSA and a prompt request for correction made. In regard to these recent errors, we expect some of this is to be expected with a new contractor. We have already seen corrections made in pricing and frequency of allocated treatment since the initial WCMSA determinations received from the new contractor.

While Tower MSA will address any identified errors, we cannot change the WCMSA review time. As such, you do need to take into account the now 30-day review time in your settlement planning (and potentially an additional 21 days if a re-review is necessary).

All-in-all, the transition to the new contractor has gone smoothly, which is a credit to CMS and Capitol Bridge.

If you have any questions, please contact Dan Anders, Chief Compliance Officer, at 888.331.4941 or Daniel.anders@towermsa.com.

Medicare Advantage Plan Hits Speed Bump in Effort to Recover Against Medicare Beneficiary and Her Attorneys

March 22, 2018

Case law supporting Medicare Advantage Plans (MAPs) reimbursement rights against primary plans (WC, Liability, No-Fault) continues to accumulate with a recent decision from the United States District Court for the District of Connecticut in Aetna Life Insurance Company vs. Nellina Guerrera, et al., Civil Action No. 3:17-cv-621 (3/13/2018). Consistent with other recent decisions on the issue, the court found that the MAP, Aetna, has a right of reimbursement against the primary plan, Big Y, including double damages, if a suit is filed under the Private Cause of Action (PCA) provision of the Medicare Secondary Payer Act. In determining the rights of Aetna under the PCA provision, the court was persuaded by prior appellate court decisions in In Re Avandia, 685 F.3d 353 (3rd Cir. 2012) and Humana v. Western Heritage, 832 F.3d 1229 (11th Cir. 2016).

While the decision represents the first federal court in the Second Circuit to fully address the use of the PCA provision by a MA plan against a primary plan, what is potentially more significant is the court’s holding that MAPs cannot utilize the PCA to sue Medicare beneficiaries or their attorneys, a decision that is inconsistent with other federal court rulings.

Case Background

The case arose as follows:

The Medicare beneficiary, Nellina Guerrera, allegedly sustained personal injuries at a Big Y store on 2/20/2015.
Ms. Guerrera was enrolled in an Aetna MAO Plan which paid for injury-related medical in the amount of $9,854.16.
Ms. Guerrera retained the law firm Carter Mario to represent her in a liability claim against Big Y.
Beginning on 9/22/2015, a year before a settlement agreement, Aetna made multiple attempts to provide notice to defendants of their lien.
On 3/10/2016 Big Y agreed that it would not send the full amount of any settlement to Ms. Guerrera and her attorneys without first dealing with Aetna’s lien (We assume this may have been an agreement with Aetna).
Case was settled for $30,000 with full amount paid to Ms. Guerrera and her attorneys on 9/15/2016 without addressing the reimbursement claim of Aetna.
Aetna files suit not only against Big Y, but also Ms. Guerrera, and Ms. Guerrera’s attorneys under the PCA provision of the MSP Act.

Court Decision

The primary questions for the court were whether the PCA provision of the MSP Act is available to MAPs, who may be sued under the PCA (primary plans, Medicare beneficiaries, attorneys) and under what circumstances a suit may be brought. The PCA states as follows:

There is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs [(b)](1) and [(b)](2)(A).

The court reached the following conclusions on each question.

Why May Sue Under the PCA?

In reaching its decision regarding who may be sued under the PCA the court cited the appellate court decisions In Re Avandia and Western Heritage as being persuasive in concluding the PCA unambiguously permits suits by MAPs. The court went on to find that even if the PCA was interpreted to be ambiguous, CMS regulations stating MAPs may sue under the PCA would be given deference, thus leading to the same conclusion.

Who May Be Sued Under the PCA?

While the court notes the PCA does not specify against whom a suit may be filed, it cites to Second Circuit precedent which has interpreted primary plans or payers as entities which may be sued under the PCA. The court also finds that Big Y meets the definition of a primary plan under the MSP Act and as such the suit can proceed against it.

Aetna though not only filed suit against the primary plan, Big Y, but also Ms. Guerrera, the Medicare beneficiary, and her attorneys. As to these defendants the court reaches a different conclusion. While admitting that the PCA language is vague, the court nonetheless interprets the Congressional intent as only permitting suits against primary plans. It cites the language “a primary plan . . . fails to provide for primary payment” as what not only triggers the ability to sue under the PCA, but also limits recovery to solely primary plans. The court finds that had Congress intended the PCA to apply to Medicare beneficiaries and their attorneys, it would have created such a cause of action similar to that applicable to primary plans. While the court notes its ruling conflicts with CMS’s interpretation, which would provide MAPs with a right of reimbursement against a Medicare beneficiary and their attorney, the court held it will not defer to CMS’s interpretation in this regard.

In finding that the PCA does not provide for a suit against a Medicare beneficiary or the beneficiary’s attorneys, the court declined to follow other federal court decisions which have found such an action to be viable under the PCA, such as Humana Insurance Company v. Paris Blank LLP.

When is a Suit Proper under the PCA?

In regard to the question as to when a suit is proper under the PCA, the court looks to the term “appropriate reimbursement” and determines that Big Y’s payment to Ms. Guerrera and her attorneys did not amount to appropriate reimbursement when the primary plan has notice of a claim for reimbursement from a MAP. The court goes on to again cite the Western Heritage decision which in turn cites Medicare regulations:

If a beneficiary or other party fails to reimburse Medicare within 60 days of receiving a primary payment, the primary plan ‘must reimburse Medicare even though it has already reimbursed the beneficiary or other party.’ 42 C.F.R. § 411.24(i)(1)

Accordingly, once 60 days passed from the date of payment by Big Y to Ms. Guerrera and her attorneys and no repayment was made to Aetna, Big Y became obligated to reimburse Aetna and subject to a suit by Aetna under the PCA.

Practical Implications of Decision

This decision is at the district court level, thus does not have precedential value which would make it binding precedent as we have in the 3rd (Pennsylvania, New Jersey & Delaware) and 11th (Florida, Alabama & Georgia) Circuits. Nonetheless, it represents the first decision in the 2nd Circuit (Connecticut, New York and Vermont) to completely address MAP reimbursement under the PCA, thus will be used as persuasive authority in future cases both in and out of the 2nd Circuit. While the decision in this case continues the trend of court decisions finding in favor of MAPs rights of reimbursement against primary plans under the PCA, it has diverged with prior decisions in finding suits against Medicare beneficiaries and their attorneys are not allowed under the PCA.

What this means for primary plans is they have a target firmly planted on their backs, especially if future court decisions find MAPs cannot recover against Medicare beneficiaries or their attorneys. We suspect that this issue will eventually be addressed at the appellate court level, if not in this case, then in future litigation.

What steps then can you take as a primary plan to eliminate this risk:

Identify Medicare eligible claimants.
Determine whether Medicare eligible claimants are or were enrolled in a MAP since the date of injury.
If enrolled in a MAP, then investigate whether the plan is seeking reimbursement stemming from the injury.
Make arrangements to directly reimburse the MAP for injury-related payments.

Tower MSA is readily available to assist you with our MA Plan investigation, negotiation and resolution service. Please contact us at (888) 331-4941 or info@towermsa.com for further information or questions.