MSP Questions and Answers
Jennifer Jordan recently presented Medicare Secondary Payer Act: Protecting Medicare’s Interest in Insurance Settlements for Lorman Education Services. The following are selected questions and answers from the audio conference. For a complete transcript of the questions and answers, visit www.medval.com.
Some health care systems have fronting PL/GL policies from domestic U.S. insurers that are 100% reinsured by the systems’ offshore captive insurance companies. If the system is self-administering the claims, the U.S. insurer typically requires that the system pay the claimants directly for settlements. The systems realize that they should be the RRE in this situation, rather than the U.S. insurer. However, they have questions about how to populate certain reporting fields, specifically fields 72, 73, and 75 (see attached). Does the system use its own TIN, office code/site ID, and claim number, or the fronting insurance company’s TIN, office code ID, and claim number?
I think you need to review the Alert from April 5, 2010 (also may be implemented in the latest user guide under foreign RREs). If the system is making payments directly than it is the RRE and the answers to your data fields lie in the creation of the fake TIN in field 72 and utilizing the options to populate the other fields with zeros or spaces pursuant to the descriptions in the chart for the other fields. The form for the fake TIN is 9999xxxxx, the x’s representing a 5 digit number of the system’s selection.
Our firm currently has a claim where the claimant has a reasonable expectation of Medicare entitled in the next 30 months but the settlement amount is less than 250K. We had an MSA prepared and it is our position that in doing so, we have taken Medicare’s interests into consideration and that is all we need to do. Our client, however, insists that is not the case. My question is: is it?
It is all you need to do as far as I am concerned from a MSP compliance standpoint, but as you will recall from the presentation, you can do more with regard to funding and administration to make sure that the money meets its intended purpose and Medicare not placed in a position in the future of making payments even though its interests were considered and funded at settlement. You cannot force CMS to opine as to the sufficiency if doesn’t meet the criteria for review, and in fact CMS has complained recently that about a third of its submissions are non-threshold and rejecting those is bogging down its process. Another thing I’ve seen is adopting a statement of understanding as an appendix to the settlement agreement, outlining the responsibilities and understanding of all parties with regard to the MSP. Like I said in the presentation, adopt a level of compliance that you are fully prepared to defend if and when the time comes – that’s all you can do right now.
According to the presentation, an insurer is required to report a settlement. It is my understanding that a hospital is required to report any possible liable third parties that are discovered to CMS; however, is a hospital required to notify CMS at the time of settlement (if the hospital knows of the settlement) that the Medicare beneficiary is about to receive settlement proceeds? Or is it sufficient for a hospital to inquire of the patient/their representative as to whether any Medicare liens have been satisfied? (The general practice at the hospital in question is to wait to receive payment until any outstanding Medicare lien is satisfied).
The hospital has no MMSEA reporting requirement of a third party liability settlement where it is not the RRE. As a Medicare provider it has an obligation to ask all the right questions about a potential primary payer situation and report those back to Medicare, but no obligation that I am aware of to continue to follow the matter and report developments [but that is not an area of Medicare knowledge that I am proficient in so don’t hold me to that]. I’m assuming you are referring to a situation where the hospital is holding a lien against the settlement rather than accepting the Medicare payment pursuant to chapter 2 of the MSP manual § 40.2. In that case, the general practice is prudent because if the hospital accepts payment from the settlement proceeds prior to Medicare being reimbursed, it is subject to a reimbursement claim pursuant to 42 USC 1395y(b)(2)(B)(ii) as a party in receipt of settlement funds.
If funds are set aside and the beneficiary does not survive long enough to spend the money on treatment, who owns the remaining money?
Medicare only has rights to reimbursement for payments made, so after repaid, the money reverts to the estate of the deceased unless in some kind of a custodial situation where the carrier retained a reversionary interest or perhaps a pooled trust situation where the funds remain with the trust for the benefit of other trustees.