MSP Compliance Continues to be Placed at the Forefront

Conditional Payments, Medicare, MSP News on March 20, 2019
Posted by Jean S. Goldstein, JD, CMSP

On Monday, the U.S. Department of Justice’s (DOJ) Attorney’s Office for the District of Maryland issued a press release concerning a settlement arrangement involving the repayment of conditional payments with the law firm of Meyers, Rodbell & Rosenbaum, P.A., a firm based out of Maryland.  The law firm entered into the settlement agreement to resolve allegations that it failed to reimburse Medicare for payments made to medical providers on behalf of a firm client.  

According to a press release issued by the Department of Justice, in and prior to 2012, Medicare made conditional payments to healthcare providers to satisfy medical bills for a client of the law firm from a claim arising out of a medical malpractice action.  In December 2015, the firm secured a $1,150,000 settlement stemming from the client’s injuries.  After Medicare was notified of the settlement, Medicare demanded repayment of the conditional payments made, which the firm did not repay.

The press release issued by the Department of Justice further provides a key summary of the settlement agreement between the parties and specifically notes that,

“Under the terms of the settlement agreement, the firm agreed to pay the United States $250,000 to resolve the Government’s claims.  The firm also agreed 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.”

The press release also states that this enforcement action “…reminds attorneys of their obligation to reimburse Medicare for conditional payments after receiving settlement or judgment proceeds for their clients.  This settlement should also remind attorneys not to disburse settlement proceeds until receipt of a final demand from Medicare to pay the outstanding debt.”

You may recall that we saw a similar enforcement action in June of 2018, when the U.S. Attorney issued an unambiguous reminder for attorneys and all parties of the statutory obligation to reimburse Medicare for conditional payments.  At that time, the U.S. Attorney entered into a similar settlement agreement with a Philadelphia personal injury law firm.  

Takeaway and Commentary:

This enforcement action is another clear reminder that the United States (or a similar situated party or entity) has a statutory right to recover payments made by Medicare for medical services where another payer is responsible for the payment.  This statutory right to seek reimbursement may be enforced against a primary payer, attorney, or others who have received settlement proceeds; this essentially means anyone with some sort of a nexus to the claim [1]. This notice issued by the DOJ is further a reminder to parties to satisfy the Medicare reimbursement obligation, when present.  In fact, over the last year we have seen Medicare Secondary Payer (MSP) compliance emphasized, from the issuance of a new Workers’ Compensation Medicare Set-Aside Reference Guide, which implicitly stated that MSP obligations cannot be circumvented, to the proposed issuance of a rule to address the manners and methods by which to satisfy MSP obligations.  This latest development further evidences the government’s continued plan of action to place MSP compliance at the forefront, and is another example supporting the need to implement proper internal protocols and best practices to timely address conditional payments. 

[1] 42 C.F.R § 411.24, which provides a right to recover payments from a primary plan or “any entity, including a beneficiary, provider, supplier, physician, attorney, State agency or private insurer that has received a primary payment.”