UPDATE ON MEDICARE’S REPORTING REQUIREMENTS

SC Self-Insurers Association, Inc.

General Membership Meeting

November 4, 2010

Daniel W. Hayes, Esquire

Updates since April 21-23, 2010 Members Only Forum:

Various Alerts issued by CMS

www.cms.gov/MandatoryInsRep/

U.S. v. Stricker decision (filed September 30, 2010)

Mediation 09.14.2010

Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007

Section 111 of the MMSEA

What is the SCHIP? “ State Children’s Health Insurance Program”

Purpose?

Safeguard against shifting burden for ongoing medical care from primary payer to Medicare

Section 111 is in addition to other MSP provisions (MSA allocation, etc.)

We’re interested in how it impacts Non-Group Health Plans

(NGHPs)

What is reportable? Settlements, judgments, and awards to Medicare

recipients:

Because Medicare recipient, likelihood of: conditional (past) medical payments and Obligation for future medical payments (must

consider MSA allocation, but reviewable by CMS only if amount of settlement > $25,000)

Applies if TPOC (Total Payment Obligation to Claimant) exists on or after 10/01/10

In general, TPOC = date settlement is signed, award/judgment filed

Also applies if ORM (Ongoing Responsibility for Medicals) exists on or after 01/01/10

What about mass torts, class actions settlements? (See U.S. v. Stricker)

Refresher:

CMS Memo: March 29, 2010

“Revised Implementation Timeline”

Two categories:

(1) Group Health Plan (GHP)

(2) Non-GHP, or NGHP

Liability Insurance (including Self-Insurance), No-Fault Insurance, and Workers’ Compensation

CMS Memo: March 29, 2010 (cont’d)

“Revised Implementation Timeline”

“Claim Input File” testing 01/01/10 – 12/31/10

System will go “live” 01/01/11

All initial claims must be submitted 01/01/11 to 03/31/11 according to assigned timeframes for RRE’s (Responsible Reporting Entities)

CMS Memo: April 6, 2010

Collection of HICNs, SSNs, and EINs

HICN: Medicare Health Insurance Claim Number

SSN: Social Security Number

EIN: Tax Identification Number (actually Employer Identification Number)

Collection of this information is proper for purposes of compliance with reporting requirements under Section 111

Mediation 09.14.2010

New MMSEA 111 Alerts since the Members Only

Forum

May 27, 2010

June 14, 2010

MMSEA 111 Alert: 05/27/10

Alert for RRE’s of Liability Insurance (Including Self-Insurance), No-Fault Insurance, and Workers’ Compensation

RRE does not report regularly scheduled periodic payments, pursuant to statute, for obligation other than medical expenses

(Ex) weekly TTD; weekly payment of permanency award

But must separately report ORM (Ongoing Responsibility for Medicals)

Periodic “indemnity only” payments raises inference of ORM

Periodic payments not reported as TPOC (Total Payment Obligation to Claimant)

MMSEA 111 Alert: 06/14/10

RRE ID Accountability and Other Registration Material

What to do if RRD creates ID’s unintentionally

Each RRE ID requires full compliance

Use of agent by RRE Changing information for

RRE with COBC (Coordination of Benefits Contractor)

Mediation 09.14.2010

New NGHP (Non-Group Health Plan) Alerts since

Members Only Forum

May 25, 2010

May 26, 2010 (x 3)

September 16, 2010

NGHP Alert: 05/25/10 New Direct Data Entry (DDE)

Option for NGHP Available for “Small Reporters”

RRE who expects to have only an occasional claim report to make

May only submit 500 or less claim reports per calendar year

If injured party’s information does not match a Medicare beneficiary, counts toward the 500 claims limit (essentially like a “51” disposition code)

DDE reporting may begin 01/03/11

No testing will be required

NGHP Alert: 05/26/10 (#1)

Revision to 02/24/10 Alert Includes that entities with

insurance plan with deductible are no longer required to report

Reported by entities’ insurer

Self-insured entities must continue to report

Whether TPA is considered RRE

Generally, NO But see, state’s

Assigned Claims Fund

Different under GHP arrangements, where TPA is the RRE

NGHP Alert: 05/26/10 (#2)

Risk Management Write-Offs for NGHPs

“reduction in the amount due as a risk management tool” constitutes liability self-insurance for purposes of Medicare Secondary Payer provisions

Intended by risk management to lessen probability of liability claim against it or facilitate/enhance good will

Provider reduces or W/O portion of charge to Medicare

Provide property of value to Medicare beneficiary where reasonable to expect will seek medical care

NGHP Alert: 05/26/10 (#3)

Clinical Trials & NGHPs If payments are made by

sponsors of clinical trials for complications or injuries arising out of the trials, considered payment by liability insurance (including self-insurance)

Must be reported

NGHP Alert: 09/16/10 Further definition of “Small

Reporter” for purpose of Direct Data Entry (DDE)

Registration overview for DDEs Further considerations for DDEs

United States of America v. James J. Stricker, et al.

“Memorandum Opinion Granting Certain Defendants’ Motions to Dismiss”

Filed with U.S. District Court N.D. of Alabama, 09/30/10

FN 1: “Not all defendants filed motions to dismiss. The court does not presume to know why . . . .”

“Accordingly, the decision set forth in this Memorandum Opinion and accompanying Order does not apply to those Defendants.”

U.S. v. Stricker

BACKGROUND 2003 underlying class action

tort settlement Monsanto Company and its

predecessors produced PCB’s (Polychlorinated biphenyls) at a chemical manufacturing plant one mile west of downtown Anniston, AL

The EPA determined PCB exposure could cause health dangers including cancer, decreased fertility, still births, and birth defects

1000’s of toxic-tort actions filed in Alabama against Monsanto and predecessor companies

U.S. v. Stricker All cases were consolidated in

both Alabama state and federal courts

Global settlement reached on 08/20/03

$300 million Involved combined total of

more than 20,500 people $275K placed in Court trust;

remainder to be paid in annual installments through 2013

Conditions to release: Funds released into

attorney-maintained trust once 75% of adult plaintiffs signed releases

Could be disbursed to plaintiffs once court approved all minor settlements and 97% of releases signed

U.S. v. Stricker Department of Justice filed suit

12/01/09 against plaintiff attorneys and defendant corporations/insurance carriers under Medicare Secondary Payer statute

Alleged 907 unnamed recipients also received Medicare payments for unidentified medical expenses related to PCB contamination

(Some) defendants filed Motion to Dismiss based upon statute of limitations

U.S. v. Stricker Issues for Court:

(1) What SOL applies to each class of defendants (corporate defendants, plaintiff attorneys)?

(2) When did the government’s cause of action accrue for each class of defendants?

U.S. v. Stricker MSPA does not include a SOL

Parties agreed SOL under the “Federal Claims Collection Act” would apply

3 years if founded upon tort;

6 years if founded upon contract

U.S. v. Stricker

Corporate Defendants:

No express contract between government and corporate defendants

Any reimbursement duties based solely on MSP statute

Liability, if any, arises out of defendants’ liability in tort settlement

“But for” the tort liability, no liability for reimbursement

So, 3 year statute of limitations applies under tort

U.S. v. Stricker

When did government’s cause of action accrue against corporate defendants?

Court focused on determining at what point did defendants’ responsibility to pay arise in relation to the underlying class-action settlement

For corporate defendants, accrued on date settlement agreement executed and approved by Court on 08/20/03

So even if 6 year SOL applied, government lawsuit filed 12/01/09 would have been barred

U.S. v. Stricker

Plaintiff Attorneys:

Conceded 6-year statute of limitations based upon contractual nature of attorney fees received from their clients

So, issue is when did government’s cause of action accrue against plaintiff attorneys?

U.S. v. Stricker

Government argued no responsibility to pay arose until 12/02/03, when all minor settlements were approved by court, 97% of plaintiffs had signed releases, and funds could be disbursed

DOJ lawsuit filed 12/01/09---one day prior to 6 years later

Settlement was “conditional”

The Court did not agree 97% certification was

“condition subsequent” to contract

Did not affect overall enforceability of settlement agreement

U.S. v. Stricker

Government’s right to intervene against plaintiff’s attorneys accrued no later than 10/29/03, when funds transferred from Court into attorneys’ escrow account

Lawsuit filed against plaintiff attorneys on 12/01/09 barred by 6-year SOL

Why is U.S. v. Stricker important?

Provides framework for calculating government’s statute of limitations for filing lawsuits to collect reimbursement

When applied in context of mandatory reporting requirements, may be able to calculate either 3-year or 6-year SOL’s based upon date of Total Payment Obligation of Claimant (TPOC), or when settlement agreement is signed (or award/judgment filed)

Likely 3-year SOL applicable to corporate defendants/carriers

Likely 6-year SOL applicable to plaintiff attorneys

Shows the government can be defeated on MSP lawsuits (but not over yet . . . )