Archive for January, 2013

President Obama signs Medicare lien reform legislation

By Gary E. Adams

Friday, January 11th, 2013

President Obama has signed changes to the Medicare Secondary Payer Act as passed by the Congress.  These changes clarify the methods to be used in obtaining information from Medicare relating to payments made by them, and imposes time limits on Medicare to respond to requests for information.

For injured workers, these changes mean that there should be fewer delays in the resolution of their claims for work-related injuries due to Medicare’s historically slow responses to requests for information.  For workers’ compensation practitioners, this simplifies the process for obtaining information and gives them some assurance that Medicare cannot pursue claims for reimbursement beyond specified time limits.  Prior to the passage of this Act, Medicare could arguably pursue claims for reimbursement for an unlimited time.

The revisions to the Act include:

Section 201 – Determination of Reimbursement Amount through CMS Website

This section is effective nine (9) months after it is passed into law which is the deadline that CMS must promulgate final regulations to carry it out. It applies to both workers’ compensation and liability claims. The new law outlines a process by which Parties may request a demand letter from Medicare that is good for a period of time before disposition of case. It requires CMS be provided notice within 120 days of an expected or reasonably expected date of settlement, and the expected date of settlement. CMS has 65 days to produce a demand letter, but can extend it another 30 days. After the appropriate time period has lapsed, the Parties can retrieve the Demand information from the website and rely on it so long as the settlement occurs within 120 days of notice and 3 days from the last download of the website. This part also includes a mini-dispute process. If elected, the Secretary’s determination is final and not subject to appeal.

This procedure is an alternative and does not replace the procedure presently provided for by CMS and its contractors. If the process is not followed correctly, the default is what occurs today. No doubt there are consequences as CMS will work hard to mitigate its exposure.

This Section also provides for a right of appeal. It is a new right granted to the insurance carrier that can be taken without consent of the Medicare beneficiary, only notice is required to the Medicare beneficiary. CMS is required to promulgate regulations presumably within nine (9) months. However, the legislation does create potential jurisdiction in Federal Courts for insurance carriers that does not exist today.

Section 205 – Statute of Limitations

This section of the law is effective six (6) months after enactment.  It applies to workers’ compensation, liability and no-fault claims.  The law amends actions brought by the U.S. pursuant to 42 U.S.C. §1395y(b)(2)(B)(iii) and limits actions to enforce reimbursement claims and penalties to three (3) years from Mandatory Insurance Report (Section 111) report of a Settlement, Judgment, Award or Other Payment.  As it exists today, the limitations period is unclear as some Courts have made varying interpretations of the general limitations clause and its applicability to the Medicare Secondary Payer Act.  The new law sets a clear standard, but to trigger protection, the claim must be electronically reported under 42 U.S.C. §1395y(b)(8).  Cases exempt by CMS establish reporting thresholds presumably will follow the general limitations period as interpreted by case law.