Rafael Gonzalez No Comments

A Tale of Two Courts: Can MAPs Recoup MSP Double Damages from Medical Providers That Have Received Payment from Primary Payer?

Rafael Gonzalez, Esq. President, Flagship Services Group

 

What a difference a couple of miles and a couple of days make. On March 2, 2018, the United States District Court for the Middle District of Florida, (Orlando), published its opinion on MSPA Claims 1, LLC v. Halifax Health, Inc., in which the court found that a private right of action under the Medicare Secondary Payer Act, which provides for double damages when a primary payer does not reimburse Medicare payments that were the responsibility of the primary payer, is unavailable against providers of medical services. Just 18 days later, on March 20, 2018, the United States District Court for the Southern District of Florida (Miami), published its opinion on MSPA Claims 1, LLC v. Bayfront HMA Medical Center, LLC, concluding that because CMS has a right of action to recover its payments from any entity, including a beneficiary, supplier, physician, attorney, state agency, private insurer or medical provider that has received a primary payment, Medicare Advantage Organizations and their assignees also have a private cause of action for double damages against recipients of a primary payment, in this case Bayfront, a medical provider.

 

Florida Middle District Court Concludes Medical Providers Are Not Subject to Double Damages Under MSP Act Private Cause of Action

 

MSPA Claims 1, LLC v. Halifax Health, Inc., is one of many lawsuits filed by MSPA Claims 1 LLC (MSPA) against various entities, seeking to certify a class of all Florida Medicare Advantage Organizations (MAOs) and recover double damages for alleged untimely reimbursement for medical payments. The case, however, is unusual insofar as MSPA targeted a provider of medical services, in this case a hospital, as opposed to the primary payers or insurance companies usually named as defendants in such suits.

In the complaint, MSPA alleges to be the remote assignee of a now-defunct MAO, Florida Healthcare Plus Inc. (FHCP). The complaint alleges that a Medicare Advantage enrollee of FHCP was involved in a motor vehicle accident and, as a result, received treatment at Halifax Hospital Medical Center. In addition to being covered by a Medicare Advantage plan administered by FHCP, the enrollee had $10,000 in uninsured motorist coverage. The uninsured motorist policy was primary and the MAO’s obligations were secondary, with respect to the medical services provided by Halifax.

After the uninsured motorist insurer paid its full $10,000 policy limits to Halifax, Halifax billed FHCP for the balance, by way of an invoice that reflected the $10,000 already received from the other insurer. FHCP, however, erroneously failed to offset the $10,000 already paid by the uninsured motorist insurer, and rendered payment to Halifax in the full amount of the covered charges, resulting in a $10,000 overpayment to Halifax. The plaintiff’s complaint alleges that Halifax failed to reimburse the full $10,000 overpayment within 60 days of FHCP’s payment. As a result, MSPA, as the alleged assignee of FHCP, brought suit in Florida state court in Miami, seeking to certify a class and recover double damages for each medical claim covered by the MSP Act that was not reimbursed within 60 days of a secondary payment by FHCP.

A. Change of Venue

Halifax had the case removed from state court in Miami, then successfully had it transferred from the U.S. District Court for the Southern District of Florida, Miami Division to the U.S. District Court for the Middle District of Florida, Orlando Division. Halifax then obtained a stay of the case in the Middle District pending the District Court’s ruling on Halifax’s motion to dismiss the lawsuit. In its motion to dismiss, Halifax argued, among other things, that the MSP Act’s private right of action does not provide a remedy against providers of medical services.

B. Halifax Argues It Is Not A Primary Payer

The MSP Act’s private right of action provides that ”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 (1) and (2)(A). 42 U.S.C. §1395y(b)(3)(A). Halifax argued that MSPA had not sued a primary plan, and it was not alleged anywhere in the complaint that a primary plan failed to make primary payment. Indeed, the only primary plan identified in the complaint, the uninsured motorist insurer, paid its full $10,000 limit before FHCP made its erroneous overpayment.

C. Court Agrees With Halifax, Dismisses Claim

Following extensive briefing, the District Court entered an order agreeing with Halifax’s interpretation of the MSP Act’s private right of action, ruling “the issue here is not FHCP’s right to reimbursement; the issue is whether FHCP’s assignee can pursue that right via the MSP Act’s private right of action. By its terms, that right of action only applies to primary plans. MSPA offers no argument as to why it should also apply to entities, such as Halifax, that receive payment from primary plans. Count I will therefore be dismissed.”

In light of this ruling, the District Court did not reach Halifax’s alternative argument that the payment at issue in the case was not a “conditional payment” by an MAO under the MSP Act and was, instead, an erroneous overpayment made after payment of the primary insurer such that the remedies in the MSP Act did not apply.

 

Florida Southern District Court Holds Advantage Plans May Seek Double Damages from Medical Providers if Failed to Reimburse

 

On February 1, 2014, an enrollee of FHCP, was involved in an automobile accident. As a result of that accident, the enrollee received medical treatment at Bayfront HMA Medical Center (Bayfront). The enrollee was also covered by First Acceptance Insurance Company (FAIC), which provided no-fault benefits. On April 14, 2014, Bayfront billed FAIC $6,255.96 for medical items and services related to the accident. FAIC paid Bayfront $3,753.58. Thereafter, on May 12, 2014, Bayfront billed FHCP the same $6,255.96 for medical items and services related to the accident. FHCP paid $691.64 of the billed charges.

On March 9, 2017, MSPA, having received an assignment for MSP related causes of action from FHCP, filed an action in the Circuit Court of the 11th Judicial Circuit in Miami Dade County, Florida on behalf of itself and a class of similarly situated Florida Medicare advantage organizations against Bayfront. FHCP alleged an MSP private cause of action, Florida deceptive and unfair trade practices claim, and an unjust enrichment claim.

On May 10, 2017, Bayfront removed the action to federal court, the United States District Court for the Southern District of Florida. On June 5, 2017, Bayfront moved the court to dismiss the complaint arguing that the MSP claim must be dismissed because it is against a provider and it is barred by the applicable statute of limitations. In addition, Bayfront argued Plaintiff had no standing to bring the deceptive and unfair trade practices or unjust enrichment claims.

A. Can MAP Seek Double Damages from Medical Facility Under MSP?

In 1980, in an effort to reduce healthcare costs to the federal government, Congress enacted the MSP. The MSP contains nine paragraphs. Paragraphs two and three establish Medicare as a secondary payer and further establish a private cause of action. The conditional payment provision of the statute requires both a primary plan and an entity that receives payment from the primary plan to reimburse the government for any conditional payments made by Medicare if the primary plan has or had responsibility to make the primary payment. 42 USC 1395y(b).

The MSP permits the United States to bring an action for double damages against all entities that are or were required or responsible to make payment under a primary plan or any entity that has received payment from a primary plan or from the proceeds of a primary plan payment to any entity. Therefore, the government may file an action against a primary insurance company or any entity that receives a payment from a primary insurance company to collect double damages when the insurance company or recipient of those funds fail to reimburse Medicare. 42 USC 1395y(b)(2)(iii).

As specified in the CMS implementing regulations, a recipient could include the Medicare beneficiary, a medical provider, or a law firm receiving settlement proceeds. In other words, CMS has a right of action to recover its payments from any entity, including a beneficiary, a medical provider, a medical supplier, a physician, an attorney, a state agency, or a private insurer that has received payment from the primary payer. 42 CFR 411.

In 1997, Congress created the Medicare Advantage program, wherein private insurance companies, operating as MAOs, contract with CMS to administer Medicare benefits to individuals enrolled in a MAP under Medicare Part C. 42 USC 1395w-22(a)(4). Over the last 5 or 6 years, there has been extensive litigation over whether MAOs may utilize the MSP private cause of action provision to assert claims against primary plans. The 11th Circuit Court of Appeals has determined that a MAP may avail itself of the MSP private cause of action when a primary plan fails to make payment or to reimburse the MAO’s payment.

In this case, however, the court is faced with a new question, whether a MAP also has a private cause of action for reimbursement against the recipient of a payment, very specifically a medical facility that may have received payment from both the primary payer as well as the Medicare advantage plan.
B. Court Concludes MAP May Seek Double Damages from Provider

42 USC 1395y(b)(2)(A) and (B) provides the government with a cause of action for double damages against both primary insurance and entities that received payment or proceeds from a primary plan. However, here, Plaintiff is proceeding under 42 USC 1395y(b)(3)(A), which allows a private party to bring an action for double damages in the case of a primary plan which fails to provide for primary payment. Bayfront argues this language only permits a private cause of action against primary plans and not medical providers.

The court finds that 42 USC 1395y(b)(3)(A) could be interpreted in more than one way. Because the provision does not specifically reference providers, it could be interpreted as only permitting the primary cause of action against a primary plan. However, the provision could also be interpreted to apply in the case of any entity’s failure to provide appropriate reimbursement. Both primary plans and providers are required to reimburse Medicare or a MAP for conditional payments. As a result, (3)(A) could be interpreted to mean that a private cause of action is available in cases where a primary plan fails to reimburse Medicare or any Advantage Plan or where a provider fails to make an appropriate reimbursement.

CMS regulations provide that MAOs will exercise the same rights to recover from a primary plan, entity, or individual that exercises under the MSP regulations. Very specifically, 42 CFR 411.24(g) provides that CMS has a right of action to cover its payment from any entity, including a beneficiary, provider, supplier, physician, attorney, Steve agency, or private insurer that has received a primary payment. Therefore, the court finds Medicare advantage organizations have the same recovery rights as Medicare when it comes to recovery from a provider.

The court further points out that Medicare Part C requires MAOs to provide their enrollees with the same benefits that are provided under traditional Medicare. Consequently, the court concludes that this statutory scheme does not make sense if MAPs are required to provide the same benefits in the same manner as the government but then are limited in ways that the government is not from pursuing reimbursement.

The court therefore finds that Plaintiff may bring a private cause of action against Bayfront for double damages if Bayfront received a primary payment that should have been reimbursed to Plaintiff.

 

C. Court Determines Amount Awardable Still to be Proven

As to the amount, Plaintiff alleges that it is entitled to $12,511.92, double the $6,255.96 amount Bayfront billed Plaintiff for services related to this claim. However, Plaintiff has only alleged it paid Bayfront $691.64 of the $6,255.96 bill, and that First Acceptance paid $3,753.58 of the bill. While the court finds, as a matter of law, that a MAP has a private cause of action against a provider under the MSP, Plaintiff will still be required to prove that the amount it paid Bayfront was actually a conditional payment subject to reimbursement under the MSP.
D. Court Rules Claim Was Filed Timely

Bayfront also argues that Plaintiff’s MSP claim is barred by the limitations period in 42 USC 1395(b)(2)(B)(vi). That statutory section indicates that the United States may seek to recover conditional payments where the request for payment is submitted to the entity required responsible to pay within the three-year period beginning on the date on which the item or service was furnished. The court however disagrees with Bayfront’s use of that statute. Instead, the court finds the applicable statute of limitations is in 42 USC 1395y(b)(2)(B)(iii), which provides that action may not be brought by the United States with respect to payment owed if the complaint is filed not later than three years after the date of the receipt of notice of a settlement, judgment, award, or other payment relating to such payment owed. Here, Plaintiff brought this action on March 9, 2017, less than three years from the date it was billed by Bayfront or had any notice that a primary payment had been made to Bayfront. The court therefore concludes that the action is timely.

 

E. Court Finds No Standing to Bring Deceptive, Unfair Trade, Unjust Enrichment Claims

Regarding the deceptive and unfair trade practice, as well as unjust enrichment claims, neither of which were included in the assignment provided by Florida health care plan to the plaintiff here, the court finds plaintiff has no standing to bring those claims.

 

Conclusion

 

What a difference a couple of miles and a couple of days makes. Virtually the same facts, almost entirely the same parties, and certainly the same law and arguments, but profoundly different results with the United States District Court for the Middle District of Florida, Orlando Division, finding that a private right of action under the MSP is unavailable against providers of medical services, but with the United States District Court for the Southern District of Florida, Miami Division, finding that MAPs may file a private cause of action under the MSP for double damages against providers of medical services. I am sure we have not heard the last word on this issue in either of these cases, so stay tuned as other similar cases are decided and appeals on both of these matters are published.

 

About Rafael Gonzalez

Rafael Gonzalez, Esq. is President of Flagship Services Group. He has over 30 years of experience in the auto, liability, no-fault, and work comp industries. He is one of the country’s top experts on Medicare and Medicaid compliance, serving insurers, self-insureds, and third party administrators. He speaks and writes on mandatory insurer reporting, conditional payment resolution, set aside allocations, and professional administration, as well as the interplay and effect of these processes and systems and the Affordable Care Act throughout the country. Rafael blogs on these topics at Medicare Compliance for P&C Insurers at www.flagshipservicesgroup.com/blog. He is very active on LinkedInTwitter, Instagram, and Facebook. He can be reached at rgonzalez@flagshipsgi.com or 813.967.7598.

 

Rafael Gonzalez, Esq

 

About Medicare Conditional Payments

42 CFR Section 411.21 indicates that Medicare conditional payments are payments made by Medicare for medical treatment where a primary payer (insurer or self-insurer) has or may have an obligation to make such payment. Primary payers must reimburse Medicare for conditional payments it has made. 42 USC Section 1395y indicates that primary payers include group health providers, workers’ compensationliability and no-fault insurers and self-insured entities, as well as physicians, attorneys, hospitals, or clinics that receive payment from a primary payer must make reimbursement.

42 USC Section 1395y also indicates responsibility as a primary payer arises even if liability for the medical expense is contested. Such a responsibility can be demonstrated by entry of a judgment or by payment conditioned on a release or waiver of payment, even if liability is denied. 42 CFR Section 411.24 indicates Medicare has a direct right of action against all primary payers responsible for making payment. And, Medicare has a direct right of action against any person or entity that received a primary payment, including the Medicare beneficiary, medical provider, physician, attorney, state agency or private insurer.

 

About Medicare Advantage and Prescription Drug Plans Reimbursement

42 CFR Section 422.108(f) provides MAPs with the same rights of recovery that the Secretary of HHS has under the MSP regulations in subparts B through D of part 411 of 42 CFR. Additionally, the same MSP regulations at 42 CFR Section 422.108 are extended to PDPs at 42 CFR Section 423.462. Therefore, PDPs have the same MSP recovery rights as MAPs, which have the same recovery rights as HHS. This includes, as recent federal appellate and district court decisions have indicated, the ability to pursue double damages through MSP private cause of action pursuant to 42 USC Section 1395y(b)(3) should the primary payer deny the MAP or PDP reimbursement of any due conditional payments.

 

About Medicaid Third Party Liability Liens

42 USC Section 1396a mandates that all reasonable measures to ascertain legal liability for Medicaid payments and reimbursement of same be taken. The state or agency administering a Medicaid plan must take all reasonable measures to ascertain the legal liability of third parties to pay for care and services paid by Medicaid. Federal law also provides that in any case where such a legal liability is found to exist after medical assistance has been made available on behalf of the individual, the state or local agency must seek reimbursement for such assistance to the extent of such legal liability. 42 U.S.C. Section 1396a(a)(25).

 

About Flagship Services Group

Flagship Services Group is the premier Medicare and Medicaid compliance services provider to the property & casualty insurance industry. Our focus and expertise has been the Medicare and Medicaid compliance needs of P&C self-insureds, insurance companies, and third party administrators. We specialize in P&C mandatory reporting, conditional payment resolution, and set aside allocations. Whether auto, liability, no-fault, or work comp claims, we have assembled the expertise, experience and resources to deliver unparalleled MSP compliance and cost savings results to the P&C industry. To find out more about Flagship, our folks, and our customized solutions, please visit us at www.flagshipservicesgroup.com. To speak with us about any of our P&C MSP compliance products and services, you may also contact us at 888.444.4125 or info@flagshipsgi.com.

Rafael Gonzalez No Comments

New York State Court Rules No Settlement Due to Medicare Mistake

On March 15, 2018, the Supreme Court of the State of New York, in New York County, published its opinion on Daniel Mayo, as the Administrator of the Estate of Annette Mayo v. NYU Langone Medical Center, finding that the parties’ Settlement Agreement is not binding on the plaintiff since it was not executed by the defendant or the insurer, as required under the express terms of the Settlement Agreement. In addition, the court concludes that the Settlement Agreement was the product of a mutual mistake based on the parties’ incorrect belief that the Medicare lien was $2,824.50, when in fact it was $145,764.08. The court therefore rules there is no settlement and orders the action back to the trial calendar.

 

Introduction

Since they are federal topics, we are used to federal court opinions defining and explaining Medicare and Medicaid issues. However, once in a while we see state court opinions with significant Medicare and/or Medicaid ramifications. This New York medical malpractice claim decision is one of those; it is a perfect example of how inappropriately handling conditional payment issues can and will cause huge problems, including blowing up your settlement. For those of us who have been practicing law for over 30 years, historically it has always been plaintiff counsel who assumed the responsibility for resolving Medicare liens. This case, without question, highlights the need for defendants, insurers, and their counsel to revisit that old theorem and instead develop a new process in which the payer takes on the responsibility for assuring appropriate handling and correct reimbursement of Medicare conditional payments.

 

Facts of the Case

Annette Mayo (Decedent) was treated at NYU Langone Medical Center (Defendant). She entered the hospital on November 9, 20I0, for a total hip replacement. On November 13, 2010, she fell out of her bed, and underwent right hip revision surgery. During her hospitalization, decedent contracted Clostridium Difficile (a gastrointenstinal bacterial infection), which extended her hospitalization and required various procedures. Decedent was discharged from the defendant hospital to a skilled nursing home facility in March 2011, and died on May 24, 2014. Daniel Mayo, as the administrator of decedent’s estate (Plaintiff) filed a claim alleging that defendant failed to timely diagnose decedent with Clostridium Difficile, and failed to appropriately secure and supervise her.

On January 15, 2015, the Center for Medicare and Medicaid Services (CMS) sent a conditional payment letter requesting $2,824.50 in overpayment, and attached a payment summary form listing the claims adding up to the total. The letter advised that “the conditional payment amount listed above is an interim amount. We are still reviewing medical claims related to your case.”

On July 21, 2015, CMS sent another conditional letter requesting $1,811.95 for overpayment, which letter contained the same language as to January 15, 2015 letter, advising that the amount listed was an interim amount and was still being reviewed.

By letter dated January 5, 2016, which was copied to defendant’s counsel, plaintiff notified the court that the action had been settled for $725,000 “inclusive of all liens, attorneys fees, without costs to either side.” By letter dated January 6, 2016, plaintiff counsel wrote defendant’s counsel that “the final Medicare lien amount is $1,811.95,” and requested that he forward releases. Also, on January 6, 2016, plaintiff counsel signed a stipulation of discontinuance, which was never filed with the court.

On January 6, 2016, counsel for defendant sent plaintiff counsel the Settlement Agreement, a 9-page document, indicating the insurer would pay $725,000. The breakdown was as follows: Medicare $2,824.50, the remaining $722,175.50 payable to Daniel Mayo as Executor of the Estate of Annette Mayo and Krentsel & Guzman, LLP, plaintiff’s attorneys.

On January 20, 2016, plaintiff and his counsel executed the Settlement Agreement, and on January 22, 2016, plaintiff counsel sent a letter with the executed Settlement Agreement enclosed and requested payment.

 

The Medicare Lien

On that same date, January 20, 2016, CMS sent a final lien letter to plaintiff and his counsel notifying them that Medicare was seeking repayment of $145,764.08 for the cost of the decedent’s medical care, and attached a list of its payments made on decedent’s behalf.

On February 2, 2016, plaintiff counsel challenged Medicare’s demand amount writing that “after the plaintiff accepted the settlement in reliance on the $1,811.95 amount stated in the July 15, 2015 letter, we informed Medicare of the settlement and awaited a demand letter fully expecting it to be lower than the conditional payment amount cited in accordance with our prior dealings with MSPRC (Medicare Secondary Payer Recovery Contractor). Instead, we were shocked to receive the January 22, 2016 letter with a demand amount of$145,764.08. It is unclear where this demand amount is coming from, however, this settlement offer was made only in contemplation of decedent’s pain and suffering and not for her medical bills which are not part of the settlement amount.”

On March 3, 2016, Medicare upheld its previous determination. Plaintiff requested reconsideration, and on September 8, 2016, the Qualified Independent Contractor (QIC) issued an unfavorable reconsideration decision upholding the prior determination.

Plaintiff next sought review before an Administrative Law Judge (ALJ) from the Office of Medicare Hearings and Appeals. On May 15, 2017, the ALJ found that plaintiff was responsible for the conditional payments, plus interest.
In the meantime, in the year and half that had since passed, neither defendant nor its insurer signed the Settlement Agreement, nor did the insurer proffer payment in accordance with the Settlement Agreement. In addition, judgment was never entered, and no stipulation of discontinuance was ever filed.

 

Plaintiff Argues Settlement Agreement is Null and Void Because of Medicare Lien Error

Plaintiff here moves to declare the Settlement Agreement null and void, arguing it was entered into under an erroneous assumption based on the conditional letters from Medicare that the maximum amount that Medicare would assert was $2,824.50. Plaintiff further argues that the Settlement Agreement is not binding as it was never filed with the county clerk, and is not signed by both parties.

Defendant opposes the motion, asserting that the Settlement Agreement is enforceable as it satisfies the statutory writing requirement, and was not entered into as the result of a “mutual mistake,” but, rather, plaintiff’s unilateral error in failing to ensure that the amount of the Medicare lien was correct. In this connection, defendant argues that investigating the extent of the Medicare liens was the sole responsibility of plaintiff, and that his failure to ascertain the correct amount of the liens is a “unilateral mistake,” and thus does not provide a basis for voiding the Settlement Agreement.

Defendant further argues that the Settlement Agreement is binding upon plaintiff since it was signed by plaintiff and his attorney, that the clear and unambiguous language of the agreement shows that it should be enforced according to its terms, and that although the agreement provides that it is not effective unless executed by the parties, the construction and drafting of the agreement demonstrates that no signature was required of defendant (or its representative) in order to make the agreement binding.

Did the Parties Intend to be Bound by the Terms of the settlement Agreement?

The threshold issue is whether the Stipulation of Settlement is enforceable. Assuming the Settlement Agreement satisfies the minimum requirement of a signed written instrument under CPLR 2104, to enforce the Settlement Agreement under the rules of contract law, it must be found that the parties intended to be bound by its terms in the absence of the signature of defendant or its representative.

“In determining whether a contract exists, the inquiry centers upon the parties’ intent to be bound, i.e., whether there was a ‘meeting of the minds’ regarding the material terms of the transaction.” In general, a written contract signed by the parties is not necessary to form a contract as long as the agreement contains its essential terms, and “there is objective evidence establishing that parties intended to be bound.” However, “it is well settled that, if the parties to an agreement do not intend it to be binding upon them until it is reduced to writing and signed by both of them, they are not bound and may not be held liable until it has been written out and signed.”

Here, the Settlement Agreement provides that “it shall become effective upon execution by the parties,” which provision is indicative of the parties’ intent that it would not be binding until executed by the parties. Accordingly, the court finds that the Settlement Agreement is not binding on the plaintiff since it was not executed by the defendant or the insurer, as required under the express terms of the Settlement Agreement.

 

The Settlement Agreement is Unenforceable Because of Mutual Mistake

Next, the court finds that even if the Settlement Agreement were enforceable in the absence of a signature from defendant or the insurer, it would be “subject to vacate on the grounds of mutual mistake.” In general, to vacate a stipulation of settlement, the moving party must show that a mutual mistake existed at the time the stipulation was entered that was so substantial that it prevented a meeting of the minds.

The court finds plaintiff has met this burden by demonstrating that the Settlement Agreement was the product of a mutual mistake based on the parties’ incorrect belief, as reflected in the record demonstrating that the parties’ negotiations were based on an assumption that the Medicare lien was $2,824.50, when it was actually $145,764.08.

Furthermore, given the more than $140,000 difference between the two lien amounts, plaintiff has demonstrated that the error was sufficiently substantial so as to prevent a meeting of the minds as to the $750,000 settlement. In addition, because the Settlement Agreement was drafted by defendant, the error cannot be attributed to a unilateral mistake by the plaintiff, but was in fact a mutual mistake.

 

Conclusion

In view the above, the court concludes that the Settlement Agreement is not binding on the plaintiff and is therefore vacated. As requested by plaintiff, the action was restored to the trial calendar and were ordered to appear for a pre-trial conference on April 19, 2018, at 2:30 pm in New York, NY.

It is hard to imagine that experienced and capable plaintiff and defense counsel would have relied upon what was clearly identified as a non-final, but interim conditional payment report from Medicare to settle the file. As the parties found out here the hard way, Medicare will only provide a final demand for reimbursement of conditional payments related to the claim upon learning of settlement of the claim.

Resolution of Medicare payments is no longer a matter of concern only to the plaintiff and his/her counsel. It is, as this case clearly shows, of great significance and importance to corporate entities, insurers, and their attorneys. As I have been recommending for a number of years, it is time that defendants, insurers, and their defense counsel create an internal process or hire a vendor to handle resolution of conditional payments. Doing so in a case like this one would have allowed them to learn early on of the correct amount due. This would have better prepared them to settle the file earlier, accurately, and without any complications. It is time.

 

About Rafael Gonzalez

Rafael Gonzalez, Esq. is President of Flagship Services Group. He has over 30 years of experience in the auto, liability, no-fault, and work comp industries. He is one of the country’s top experts on Medicare and Medicaid compliance, serving insurers, self-insureds, and third party administrators. He speaks and writes on mandatory insurer reporting, conditional payment resolution, set aside allocations, and professional administration, as well as the interplay and effect of these processes and systems and the Affordable Care Act throughout the country. Rafael blogs on these topics at Medicare Compliance for P&C Insurers at www.flagshipservicesgroup.com/blog. He is very active on LinkedInTwitter, Instagram, and Facebook. He can be reached at rgonzalez@flagshipsgi.com or 813.967.7598.

 

Rafael Gonzalez, Esq

 

About Medicare Conditional Payments

42 CFR Section 411.21 indicates that Medicare conditional payments are payments made by Medicare for medical treatment where a primary payer (insurer or self-insurer) has or may have an obligation to make such payment. Primary payers must reimburse Medicare for conditional payments it has made. 42 USC Section 1395y indicates that primary payers include group health providers, workers’ compensationliability and no-fault insurers and self-insured entities, as well as physicians, attorneys, hospitals, or clinics that receive payment from a primary payer must make reimbursement.

42 USC Section 1395y also indicates responsibility as a primary payer arises even if liability for the medical expense is contested. Such a responsibility can be demonstrated by entry of a judgment or by payment conditioned on a release or waiver of payment, even if liability is denied. 42 CFR Section 411.24 indicates Medicare has a direct right of action against all primary payers responsible for making payment. And, Medicare has a direct right of action against any person or entity that received a primary payment, including the Medicare beneficiary, medical provider, physician, attorney, state agency or private insurer.

 

About Medicare Advantage and Prescription Drug Plans Reimbursement

42 CFR Section 422.108(f) provides MAPs with the same rights of recovery that the Secretary of HHS has under the MSP regulations in subparts B through D of part 411 of 42 CFR. Additionally, the same MSP regulations at 42 CFR Section 422.108 are extended to PDPs at 42 CFR Section 423.462. Therefore, PDPs have the same MSP recovery rights as MAPs, which have the same recovery rights as HHS. This includes, as recent federal appellate and district court decisions have indicated, the ability to pursue double damages through MSP private cause of action pursuant to 42 USC Section 1395y(b)(3) should the primary payer deny the MAP or PDP reimbursement of any due conditional payments.

 

About Medicaid Third Party Liability Liens

42 USC Section 1396a mandates that all reasonable measures to ascertain legal liability for Medicaid payments and reimbursement of same be taken. The state or agency administering a Medicaid plan must take all reasonable measures to ascertain the legal liability of third parties to pay for care and services paid by Medicaid. Federal law also provides that in any case where such a legal liability is found to exist after medical assistance has been made available on behalf of the individual, the state or local agency must seek reimbursement for such assistance to the extent of such legal liability. 42 U.S.C. Section 1396a(a)(25).

 

About Flagship Services Group

Flagship Services Group is the premier Medicare and Medicaid compliance services provider to the property & casualty insurance industry. Our focus and expertise has been the Medicare and Medicaid compliance needs of P&C self-insureds, insurance companies, and third party administrators. We specialize in P&C mandatory reporting, conditional payment resolution, and set aside allocations. Whether auto, liability, no-fault, or work comp claims, we have assembled the expertise, experience and resources to deliver unparalleled MSP compliance and cost savings results to the P&C industry. To find out more about Flagship, our folks, and our customized solutions, please visit us at www.flagshipservicesgroup.com. To speak with us about any of our P&C MSP compliance products and services, you may also contact us at 888.444.4125 or info@flagshipsgi.com.

Rafael Gonzalez No Comments

Commercial Repayment Center Returned $131.78 Million to Medicare Trust Fund in FY 2017

Rafael Gonzalez, Esq. President, Flagship Services Group

As Required by Section 1893(h) of the Social Security Act, the United States Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS), Medicare Secondary Payer (MSP) Commercial Repayment Center (CRC) published its third annual report to Congress for FY 2017 in March 2018. https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview/Downloads/The-Medicare-Secondary-Payer-Commercial-Repayment-Center-in-Fiscal-Year-2017.pdf. Based on the Group Health Plan (GHP) and Non-Group Health Plan (NGHP) recovery work of the CRC, for FY 2017 (October 1, 2016 through September 30, 2017), CMS returned $131.78 million dollars to the Medicare Trust Funds.

Read more

Rafael Gonzalez No Comments

Connecticut Federal District Court Allows MAO PCA Against Corporate Defendant, But Not Against Beneficiary and Her Attorneys

Rafael Gonzalez, Esq. President, Flagship Services Group

 

On March 13, 2018, the United States District Court for the District of Connecticut published its decision on Aetna Life Insurance Company v. Nellina Guerrera, Carter Mario Injury Lawyers, attorney Sean Hammil, attorney Danielle Wisniowski, and Big Y Foods, Inc. concluding that the MSP Private Cause of Action provision unambiguously permits suit by MAOs and, further, that even if it was ambiguous, 42 CFR section 422.108(f) grants MAOs the right to sue under the Private Cause of Action provision. The court also finds that suit may be brought against a primary plan, but not against beneficiaries or their attorneys. The court also concludes that suit may be brought against Big Y, as its settlement payment to Guerrera and/or her attorneys was not appropriate reimbursement under the MSP.

Read more

Rafael Gonzalez No Comments

Florida Federal District Court Holds Advantage Plans May Seek Double Damages from Medical Providers if Failed to Reimburse

Rafael Gonzalez, Esq. President, Flagship Services Group

 

On March 20, 2018, the United States District Court for the Southern District of Florida published its opinion on MSPA Claims 1, LLC v. Bayfront HMA Medical Center, LLC, concluding that because 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, Medicare Advantage Organizations also have a private cause of action for double damages against the recipient of a primary payment, in this case Bayfront, a medical provider.
Read more

Rafael Gonzalez No Comments

NCCI Publishes 2018 Update on Medicare Set Asides and Workers Compensation

Rafael Gonzalez, Esq. President, Flagship Services Group

On February 8, 2018, the National Council on Compensation Insurance (NCCI) published its MEDICARE SET-ASIDES AND WORKERS COMPENSATION— 2018 UPDATE (study), written by Nedžad Arnautović. The study can be found at https://www.ncci.com/Articles/Documents/II_MSA-WC-Study.pdf What follows is a verbatim rendition of the facts, analysis, findings and conclusions found in the report.

 

INTRODUCTION

“In September 2014, NCCI published a study on Medicare Set-Asides (MSAs) in workers compensation. Using the sample of MSAs submitted to the Centers for Medicare & Medicaid Services (CMS) between September 2009 and November 2013 and completed between January 2010 and November 2013, the study examined several aspects related to Medicare Set Asides (MSAs), such as the distribution of amounts of MSAs and total settlements that include MSAs, claimants’ age distribution, the duration of time from submission to CMS approval, and the relation between submitted and CMS-approved MSA amounts. This paper provides an update and expansion of the previous MSA study using the larger data sample as well as additional experience from 2014 and 2015.”

Read more

Rafael Gonzalez No Comments

MAP Assignees Settle MSP Class Action Against Ocean Harbor for $5 Million

On January 12, 2018, in the Circuit Court of the 11th Judicial Circuit in and for Miami Dade County, Florida, MSPA Claims 1 filed its motion for approval of a class action settlement against Ocean Harbor Casualty Insurance. The settlement agreement is intended by the parties to fully, finally, and forever resolve, discharge, and settle all claims. The motion indicates that the settlement agreement provides a fair, flexible, speedy, cost-effective, and assured monetary settlement to the class members. Thus, the settlement agreement provides considerable benefit to the class members while avoiding costly litigation of difficult and contentious issues. The parties also indicate that the settlement agreement is a compromise, and shall not be construed as, or deemed to be evidence of admission or concession of liability or wrongdoing on the part of Ocean Harbor with respect to any claim of any fault or liability or wrongdoing or damage whatsoever.

 

 

 

 

Read more

Rafael Gonzalez No Comments

How Flagship Services Group Helps Claims Adjusters – Part Two

This is the second in a two-part blog series involving the day-to-day role of a claims adjuster at the average P&C insurance carrier and how Flagship Services Group can make that day easier and more rewarding.  In the last post, we looked at some potential pitfalls the average claims adjuster does not want to deal with.  In this post, we’ll discuss how these pitfalls are avoided.

As we noted in the previous post, the average claims adjuster at a mid-size to large P&C insurance carrier has a heavy case load and a lot of stringent requirements and KPIs keeping them on their toes. 

We were introduced to Bob, a P&C staff claims adjuster who just opened up a new file to find it’s one of those dreaded Medicare reimbursement cases.  The claimant is a Medicare beneficiary who was injured in a motor vehicle accident and was in the hospital for several days.  In addition, he has ongoing physical therapy and follow-up medical bills in the mix.  Medicare has already paid for the hospitalization and a Conditional Payment Letter is on its way.

Now, Bob only sees one or two of these types of claims every month, in among as many as 200 claims he may touch in that same amount of time.  As a result, he’s not completely comfortable with all the regulations involved, and he knows it’s going to take a lot of time to research it and get that all straight before he can proceed with confidence.  

Read more

Rafael Gonzalez No Comments

How Flagship Services Group Helps Claims Adjusters – Part One

This is the first in a two-part blog series involving the day-to-day role of a claims adjuster at the average P&C insurance carrier and how Flagship Services Group can make that day easier and more rewarding.  In this post, we’ll look at some potential pitfalls the average claims adjuster is not going to want to deal with.  In the next post, we’ll discuss how these pitfalls are avoided.

The average claims adjuster at a mid-size to large P&C insurance carrier – let’s call him Bob – has myriad tasks to handle throughout a given day.

Bob’s Busy Day

Bob starts the day listening to 14 voicemails that came in since he left the previous day.  Three are from one particularly tenacious and obnoxious lawyer who enjoys trying to bully adjusters with crude language and a lot of bluff and bluster. The rest are from various claimants, attorneys, and other sources he’s been playing phone tag with for days now.

Next, over a cup of not-so-good coffee, Bob reviews his inbox to find two new files in his queue.  This puts his total case load at 134 – not the worst he’s seen, but right up there.  He sighs and pulls out a Post-It note to remind himself to make the obligatory contact call on each of these new claims before he leaves today since the 24-hour service standard will have expired before he gets in tomorrow.

Read more

Rafael Gonzalez No Comments

Introducing Diana Nelson, Flagship’s New VP of Client Relations

We’re thrilled to announce that Diana Nelson has agreed to jump on board as Flagship Services Group’s Vice President of Client Relations.

Diana comes to us with over 25 years experience in various sales and marketing roles including several that hinge on personal injury recovery, insurance, and workers’ compensation.  She spent eight years running her own company, which fits in very well with the strong entrepreneurial drive that has helped Flagship grow so quickly over the last several years.

Flagship_Oct_2014_120_(533x800)Diana is recognized for her ability to envision and achieve strategic directives, empower sales efforts to increase top-line revenue, expand brand identity, and build client and employee satisfaction to optimize profit. Her record of revenue growth speaks for itself, explaining why she’s been a sought-after team member for many large companies over the years. These skills will serve our Flagship team well as she takes on her new role.

“As the ‘corporate face’ of Flagship to our clients, I am the primary liaison between them and our sales and professional services teams,” Nelson said, “my responsibility is to ensure that our clients’ needs are met, while also serving as their advocate to our executive team relative to current and future needs and opportunities.”

Read more