The Official Medicare Set Aside Blog And Information Resource: Recent Comments

Comment on MSPRC announcement regarding "Self-Calculated Final Conditional Payment Amount" Option

Jim Price — Fri, 16 Dec 2011 19:08:02 GMT

I am glade to see this development and CMS should be commended for their efforts. However, this does not go far enough in helping our food industry clients. I am hopeful that CMS will come up with a clarification on what they mean by "ingestion." CMS often uses the term to apply to mass torts. The majority of alleged food contamination claims do not end up in mass torts. Further, while this is welcome news, it does not eliminate the need for the reforms our industry is seeking through the SMART Act. We need to continue to strongly support this legislation!

Comment on There's Only 1 Way to Skin a Cat

Medicare Set Aside Services — Wed, 05 Oct 2011 15:36:33 GMT

Thanks Jen. Your point is valid in that there is no point in allocating for treatment in excess of what Medicare requires in its approval process. I often tell clients on both the plaintiff and the defense side that an MSA bears little resemblance to the actual medical treatment needed for a particular case. An MSA is simply the amount CMS would regard as reasonable for a given injury. Sometimes that closely matches the claimant's actual needs, but more often than not, at least lately, it is a pure fiction that is overfunded and unneeded.

I have worked on some of the most catastrophic cases you could imagine and have NEVER come anywhere close to $2.3 MM as a valid MSA number. A claimant could be nothing more than a brain and single eyeball in a jar and the Medicare covered expenses would be less than 2MM. Of course, these same cases have life care plans in excess of $2MM, but that does not translate directly to the MSA. I have no issue with a plaintiff’s attorney trying to get the highest settlement possible for their client. I believe that is their duty as their advocate. But the MSA is not the place to establish the value of a case. Remember, when it comes to MSP compliance it isn't plaintiff against defense. It is plaintiff AND defense against CMS. Same interests, same number, same methodology.

While I understand Ms. Hummel's indignation at having her work portrayed in this unfavorable light, it was her client that sued based on her work and said work is part of a published legal opinion dealing with the MSP. So as far as I am concerned, this is a newsworthy event. However, I will publish her rebuttal because her point has some merit regarding a wholesale discounting of claimant's future pharmacological needs. I think where she went wrong was allowing her plaintiff client to manipulate the MSA in a way favorable to his cause without meeting (presumably) any resistance from Ms. Hummel. Was it intentional? I don't know. But I can't imagine Ms. Hummel finishing up a $2.3MM dollar MSA, leaning back in her chair, looking at her law books on the shelf and thinking "This looks good. I'm sure the claimant won't mind putting $2.3MM away in an MSA from his settlement." Call it a life care plan and I have no issue. Call it an MSA and Jen's original point stands.

We will work with our clients to get to an MSA number that fits the facts of the case and that all parties can live with. But don't come here if you are looking to use the MSA as a bludgeon against the other side. That’s what life care plans and expert testimony are for. We just want to carve out the portion of the agreed upon settlement that reasonably protects Medicare and puts the MSP issue to rest at settlement, not years later in an appellate decision.

Ryan

PS, do we have our facts straight? If not, I am happy to continue this dialogue. You have an open microphone.

Comment on There's Only 1 Way to Skin a Cat

Medicare Set Aside Services — Wed, 05 Oct 2011 15:04:08 GMT

Fair enough, but I was merely commenting on only the facts as presented in the published court opinion. The point still remains that the only way to do an MSA is the way that CMS wants it. If it is approved as adequate by CMS, then there is no point in allocating amounts beyond that for purposes of MSP compliance. It is ridiculous enough to fully fund 43.2 years of prescription drugs in today's dollars with no consideration of generics becoming available, tolerances building or new cheaper alternatives becoming available, but we do it because that's what CMS wants in exchange for its approval. Doing so at a time when they didn't require it makes your MSA a plaintiff's Life Care Plan and that was the original point.

Comment on There's Only 1 Way to Skin a Cat

Christine Hummel — Wed, 05 Oct 2011 13:57:27 GMT

I would just like to take a moment to defend my company. HCS does not purposefully overvalue our MSAs and we do quality work for both plaintiff and defense. In this case the two MSAs (ours and AIGs) were calculated in late 2007 and early 2008; well before the June 1, 2009 prescription drug review policy by CMS became effective. Prior to 6/1/09 it is fairly common knowledge that CMS would approve just about any RX allocation even if not supported by the medical records. In this case HCS was asked by the client to calculate the MSA using the exact medications in the medical records; not taking into account any dispute/litigation on the file (there were disputes on the file regarding medications and other treatment; HCS was instructed to disregard all such disputes and simply fund the MSA based on the treatment recommendations). Nor did the client want HCS to reduce the RX funding by assuming the claimant would be tappered off medications or that a "generic" version of a brand name drug would suddenly be available in 5 years for an unknown price. The HCS MSA was valid and not overfunded. The reason our MSA was as high as it was is because we actually fully funded all of the claimant's medications as prescribed by the treating physician for his full 43.2 year life expectancy. The medical records provided to HCS at the time indicated all medications would continue indefinitely; therefore, there was no reasonable medical basis available to discontinue funding prior to death.

Next time you choose to discuss work my company did in your blog, I would appreciate you contacting me first to get your facts straight.

Sincerely, Christine Hummel, Esq.
Hummel Consultation Services
President

Comment on Not so clever MSA marketing

Jim Price — Fri, 23 Sep 2011 17:10:15 GMT

FYI. Just went to Google and typed in MEDVAL. It appears to have been fixed…

Please keep up the good work. While we don’t agree on Liability Medicare Set-aides, you guys do provide a valuable service.

Best regards, -- Jim

James S. Price, ARM | Senior Consultant
Aon Risk Solutions | Aon Global Risk

Comment on The MSP and Bad Faith (Wilson v. State Farm)

Medicare Set Aside Services — Mon, 25 Jul 2011 19:11:56 GMT

This debate is endless as I can cite non-existent statutory omissions indefinitely as well, the main one being that the MSP does not include an express termination of Medicare's right to make a conditional payments. Just as the MSP does not say anything about mandatorily protecting Medicare's interests via MSA in ANY insurance settlement, it also does not say when the MSP in general stops applying. Medicare is statutorily forbidden from paying in a situation where another form of insurance is responsible, however it possess the right to make a conditional payment if the primary plan cannot reasonably be expected to make payment with respect to such service, which would be the case after it settled its claim, and again the statute is silent as to when Medicare can exercise that right. And settlement, judgment or award is certainly not the end in a liability situation given that the event actually serves as the trigger for MSP application to treatment related to the injury in question.

I'm not saying, nor have I ever believed, that I think that a full blown WCMSA style set-aside is appropriate in liability situations. But what I am saying is that if compensation is made for future medical expenses in exchange for a release from responsibility for the same, then those funds, to whatever limited extend provided based upon the underlying state laws, need to be used for those medical expenses, especially at a time when the individual would otherwise submit that claim to Medicare. You say this is not good for Medicare, Medicare beneficiaries, or our industry, but I vehemently disagree. The tax payer in me does not want to continue to fund a program that will likely not be around for my benefit, that is going broke because it is making payments that it is statutorily forbidden from making; therefore proper implementation of the statute passed in 1980 should do wonders in prolonging the predicted pre-exhaustion of the Medicare trust funds. Our industry is providing these funds already so I don't see how it is harmed, especially when earmarking the funds as opposed to calling them general damages should provide a defense to future claims by Medicare and cap Medicare's exclusion period if reasonably representative of the legal value of that particular claim. But I guess that the Medicare beneficiaries do have something to lose when they cannot buy that new car or that 72" plasma because they actually have to spend their future medical expense allocation on future medical expenses.

There are so many problems with CMS policy and I am certainly not going to defend anything that agency is doing. But staying strictly within the statute and the regs and acknowledging the public policy reasons for trying to protect Medicare, I just don't see how you opponents of LMSAs think the issue is ever going to go your way. You should be focusing on application of the limitations that CMS refuses to acknowledge. Bradley & Hinsinger are critical to any policy CMS tries to implement and it is inherent upon the industry to push that agenda and we're all just wasting time fighting with each other rather than pursuing the needed reform of the agency's policies. With 76 million baby boomers becoming entitled to Medicare during the next decade, do you really think this is a battle you are going to win?

Comment on The MSP and Bad Faith (Wilson v. State Farm)

Jim Price — Fri, 22 Jul 2011 16:52:34 GMT

I cited Zaleppa v. Seiwell as authority, but a plan reading of the MSP statutes/regulations leads one to the same conclusion. That said, its nice to have a court who has actually reviewed the MSP statutes and regulations agree. Even Barbara Wright cannot give a specific citation within 42 USC 1395y that states a primary payer has an affirmative duty to "protect Medicare's interests" as so often suggested by the MSA industry. It doesn't exist. This notion first came from footnote 1 in CMS' Patel memorandum (and then arguably only applied to Medicare beneficiaries and not primary payers). Given the recent holding in Bradley v. Sebelius, it is highly doubtful if CMS’ internal memorandum or policy manuals will be given the deference of law. Nonetheless I am heartened you do find the holding in Zaleppa "persuasive." However, I am troubled by your suggestion that once a primary payer has meet Medicare's 60 day demand letter to pay "conditional payments" that they have an on going, open-ended obligation to Medicare for future “conditional payments.” There is nothing in the MSP that says this. CMS’ recovery is limited under 42 CFR 411.37(b). There is nothing under this regulation (or any others) that remotely suggests that Medicare has an open-ended right to collect future medicals or ‘conditional payments” from primary payers. Further, even if CMS’ MSP Manual were to be given the deference of law, it is at least consistent with 42 CFR 411.37(b). The MSP Manual states “There should be no recovery of benefits paid for services rendered after the date of a liability insurance settlement. However, the entire amount of a settlement is subject to recovery, whether the liability payment is made at the time of settlement, or over a period of time agreed to by the parties in a structured.” This is consistent with 42 CFR 411.37(b). There is simply nothing in the statues or regulations that allows Medicare to seek conditional payments once Medicare’s demand has been paid. As David Berg points out in the December 2010 issue of AJJ’s Trial ("Clearing Up the Confusion About Medicare Set-Asides"), Medicare would need to seek and receive statutory authority from Congress. So long as the industry is lead into thinking they have a “duty to protect Medicare’s interests” and voluntary give the federal government money that they are not legally entitled, I am sure the government will be more than willingly accept these voluntary payments. Under the current MSP, Medicare already receives a windfall in liability cases because their recovery is not reduced by applying principles of comparative fault. This inequity already results in Medicare beneficiary being disenfranchised because plaintiff attorneys are discouraged from taking their cases, insurance companies are discouraged from settling Medicare beneficiary claims because of the increased costs of settlements. This is not good for Medicare, Medicare beneficiaries, or our industry.

Comment on The MSP and Bad Faith (Wilson v. State Farm)

Medicare Set Aside Services — Tue, 21 Jun 2011 19:36:48 GMT

Interesting that to make your point you have to rely upon a case that argued its way all the way up to the Supreme Court of Pennsylvania on the issue of resolving Medicare conditional payments without once noting that the jury award did not include any recovery for past medical expenses, thus rendering those motions moot from the onset. Yet that state court's opinion, based primarily on state law, on the overall federal MSP issue is persuasive.

I note in your comment that you acknowledge that Medicare has a statutory right of recovery against a primary payer once there is a settlement, judgment award or other payment. Can you point to the place in the statute or regulations that terminates that right? While you are quick to point out that the statute and regs don't expressly state that there is a duty to protect Medicare's interests, I challenge you to show where the statute and regs state that Medicare can no longer make and recover conditional payments post-settlement.

Comment on The MSP and Bad Faith (Wilson v. State Farm)

Jim Price — Tue, 21 Jun 2011 18:29:36 GMT

I agree with your attorney's admonishments. The MSA industry tends to argue that the defendant and plaintiff's attorney have a "duty to protect Medicare's interest" when in fact there is nothing in the statutes or regulations says this. Rather, Medicare has a statutory right of recovery against a primary payer once there is a settlement, judgment award or other payment. These duties are articulated under the statutes and regulations. See Zaleppa v. Seiwell (No. 2019 MDA 2009, Superior Court of Pennsylvania) for a good discussion the so-called "duty to protect Medicare's interests." Only Medicare has this statutory duty.

Comment on To Be or Not To Be, Appropriateness of LMSAs is Apparently Still in Question

Ralph J Mellusi — Wed, 13 Apr 2011 22:33:07 GMT

As to the ongoing debate in The MSP industry as to the necessity of liability MSAs. See the forceful argument of David J. Berg Esq. as to why LMSAs are not required, entitled,
“Clearing up the Confusion About Medicare Set-Asides” appearing in “Trial” December 2010, Volume 46, No. 12, published by the American Association for Justice.