This document provides an overview of Medicare's role as a secondary payer and its right to reimbursement from liability settlements. It discusses Medicare's history and the laws giving it secondary payer status when other insurance is available. The document then outlines a step-by-step process for paralegals to assist attorneys in processing Medicare liens incurred by clients and requesting waivers or reductions of those liens.
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Deductible is the certain amount of money that a policy holder or an insured person has to pay before the insurance company starts paying up.
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Cyprus chapter in ICLG Shipping Law 2015. Authored by leading Cyprus maritime lawyers, covering Marine Casualty, Cargo Claims, Evidence and Procedure, Foreign Judgments and Awards and Arrest and Security. The attached chapter appeared in the 2015 edition of The International Comparative Legal Guide to: Shipping Law; published by Global Legal Group Ltd, London.
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Chapter 10
Health Reform in the United States
Chapter OverviewDiscusses the history of health reform in the United States and details the key provisions of the Affordable Care Act (ACA)Focuses on:Previous attempts at national health reformWhy health reform is difficult to achieveThe passage and provisions of the ACA
*
Health ReformThere have been numerous health reform attempts in the United States.Prior to 2010, all attempts at national health reform to create universal or near-universal coverage have failedSome successes at the state level
Health Reform—Difficulty of Reform in the United StatesIndividualistic cultureDislike of big governmentLack of consensus Federal system rules and structure make it difficult to achieve major reformStates generally home to social welfare issuesPowerful interest groups against national health reformPath dependency
Health Reform—Key Failed Attempts at National Health Reform1912 Progressive Party candidate Teddy Roosevelt supported social insurance platform that included health insurance1915 American Association for Labor Legislation proposal for working-class health insurancePresident Truman supported national health reform upon taking office, won re-election on national health insurance platform in 1948President Nixon: initial health reform proposal in 1969 and revised proposal in 1972President Clinton Health Security Act in 1993
*
The Affordable Care Act
(1 of 3)Why did the ACA pass when so many prior attempts had failed?Commitment and leadershipLearned lessons from past failuresPolitical pragmatism
The Affordable Care Act
(2 of 3)Individual mandate—most people have to purchase health insurance or pay a penalty starting in 2014Exemptions for certain populations and based on affordabilityPenalty for individual mandate repealed in 2017 Tax Cut and Jobs ActControversyToo much government interference in private lives?Constitutional?
The Affordable Care Act
(3 of 3)State Health Insurance ExchangesAmerican Health Benefit Exchanges for individualsSmall Business Health Options program for small businessesEffectively ended in 2018; may be revisedMust offer essential health benefits (abortion compromise)Four cost levels for plans based on actuarial value
ACA: Premium and Cost Sharing SubsidiesPremium tax credits available for individuals who purchase insurance in an exchange and have income between 133% and 400% of povertyCost-sharing subsidies available for individuals who purchase insurance in an exchange and have income up to 250% of povertyTo qualify, must be a U.S. citizen or legal resident, not eligible for any type of public insurance, and not have access to employer-sponsored insurance
*
ACA: Employer MandateIn 2014, employers with 50 or more employees must provide affordable health insurance or pay a penalty.Insurance is affordable if it has an actuarial value of at least 60% or is not more than 9.5% of an employee’s income.Penalty is per employee after first 30 emplo ...
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Planning for healthcare needs via Medicare is also not a quick task. Understanding the length of time involved when considering which insurance is right reduces unrealistic expectations and disappointment. It also helps to understand what Medicare is and who it benefits before getting in to the finer details.
1. Medicare: Step-by-Step
by
Deborah M. Welsh, MPA, NCCP
Greenville, North Carolina 27835
October 19, 2007
The purpose of this paper is to provide a practical framework for paralegals
assisting attorneys with the processing of Medicare liens incurred by their clients. It will
not address the issue of Medicare Set-Asides but information on that topic can be found
in the North Carolina Personal Injury Liens Manual, First Edition, edited by Christopher
R. Nichols, Esq. and published by the North Carolina Academy of Trial Lawyers this
year. This paper begins with a history of Medicare’s right of reimbursement, explains
Medicare’s position that it is a secondary payer, discusses the role of the attorney in the
process, and then provides a “step-by-step” process that paralegals can use to initiate a
relationship with the Medicare offices on behalf of their clients and complete the lien
process in an efficient and effective manner. Finally, this paper provides a process by
which the paralegal can assist the attorney in requesting a waiver or reduction of the
Medicare lien on behalf of the client.
History of Medicare’s right of reimbursement
In 1965, Title XVIII of the Social Security Act provided for the creation of
Medicare and Medicaid, entitlement programs designed to provide medical
insurance coverage to persons who receive Social Security retirement benefits or
Social Security disability income. Entitlement to Medicare is not affected by a
person’s income or assets. Part A is funded through payroll deductions and Part B
is funded through monthly premiums which are generally deducted from the
person’s monthly Social Security check.
A Medicare Trust Fund was established with these funds to provide payments for
beneficiaries’ medical care, and in the 1980’s, Congress passed the Medicare
Secondary Payer (MSP) law to ensure the Trust would continue to have sufficient
funds to pay for this care in the future.
I. Medicare As a Secondary Payer
Since the program began, Congress has enacted a number of laws making
Medicare a secondary payer to other insurance in certain situations. To ensure the
solvency of the Trust Fund, payment of medical bills must be made by primary
payers if the costs were incurred as a result of an injury on the job or third party
negligence. In those cases, Workers’ Compensation and private insurance funds
are the primary source of payment in these instances and would not be allowed to
shift the costs of medical expenses attributed to their wrongdoing from
themselves to tax payers.1 42 U.S.C. 1395y(b)(2) and 1862(b)(2)(A)(ii) of the
1
United States v. Baxter International, Inc., 345 F.3d 866, 875 (11th Cir.2003)
1
2. Act state Medicare is precluded from paying for a beneficiary’s medical expenses
when payment “has been made or can reasonably be expected to be made under a
workers’ compensation (WC) plan, an automobile or liability insurance policy or
plan (including a self-insured plan) or under no-fault insurance.”
Thus the role of the MSP in particular situations is similar to the coordination
of benefits clauses in private health insurance policies. Typically, Medicare
should be considered as a secondary payer in the following situations:
a. When the beneficiary has a Group Health Plan with provisions for age,
disability or end-stage renal disease;
b. When the beneficiary has been involved in an accident and no-fault or
liability insurance is available;
c. When the beneficiary has been injured on the job and is covered by
Workers’ Compensation insurance;
d. When the beneficiary is enrolled in the Federal Black Lung Program;
or
e. When the beneficiary receives benefits from the Veteran’s
Administration.2
Medicare is also a secondary payer to Medigap3, Medicaid and TRICARE
program coverage.
The Medicare Coordination of Benefits (COB) program is a centralized office
created to investigate and identify other health benefits available to a Medicare
beneficiary and to coordinate the payment process to prevent mistaken payment
of Medicare benefits if another primary source is available.4 The COB Contractor
(COBC) is primarily an information gathering entity who coordinates the payment
process to prevent mistaken payment of medical bills by Medicare. The COBC
also looks at such documentation as trauma or injury diagnosis codes which alert
them that there is a potential for third party liability and the possibility of an MSP
situation that warrants development. Information about the COB is located at
http://www.cms.hhs.gov/COBGeneralInformation/.
However, Medicare may pay for a beneficiary’s medical expenses
“conditioned upon reimbursement to Medicare from proceeds received pursuant
to a third party liability settlement, award, judgment or recovery.”5 Medicare
makes this conditional payment when the primary source can be reasonably
2
However, Medicare may pay for covered services for which the VA does not make any payment and may
also reimburse veterans VA co-payment amounts charged for VA-authorized services furnished by non-VA
sources. See Medicare Benefit Policy Manual, Chap. 16 of Pub. 100-02 (2/23/07) at
www.cms.hhs.gov/manuals/Downloads/bp102c16.pdf.
3
Effective October 1, 2007, the COBC will assume responsibility for the Medigap claim-based crossover.
Detailed information regarding the transition of the Medigap crossover can be found at www.cms.hhs.gov/
MLNMattersArticles/downloads/MM5601.pdf.
4
COB Fact Sheets: MSP Laws and Third Party Payers Fact Sheet for Attorneys.
www.cms.hhs.gov/ProviderServices/Downloads/thirdpartypayers.pdf.
5
Ibid., p.1
2
3. expected to pay, but it has been determined that the primary payer will not pay
promptly. The Centers for Medicare & Medicaid Services (CMS) defines
“promptly” as “120 days from (1) the date a claim is filed with an insurer or a lien
is filed against a potential liability settlement, or (2) the date the service was
furnished or the date of a hospital discharge.”6 When the primary insurer’s
payment has been made to the beneficiary, Medicare is entitled to recover what it
paid.
Liability insurance may include uninsured motorist, underinsured motorist,
homeowner’s liability, product liability and medical negligence. Payment may not
be made by Medicare if payment can be reasonable expected to be made under a
Workers’ Compensation claim, including plans provided under the Federal
Employee’s Compensation Act, the Federal Coal Mine Health and Safety Act of
1969 as amended (the Federal Black Lung Program) and the U.S.
Longshoremen’s and Harbor Workers’ Compensation Act. These federal
programs provide a type of workers’ compensation for federal civil service
employees, employees of companies performing overseas contracts with the U.S.
government, employees of American companies who are injured in an armed
conflict, and offshore oil field workers.7
If Medicare chooses to make conditional payments on behalf of a beneficiary,
its lien takes priority over any other lien, interest or judgment proceeds. The
statutes regarding the conditional payment and Medicare’s right to reimbursement
from the beneficiary’s settlement proceeds are found at 42 U.S.C. §1395y (b)(2).
The rules that govern how this statute operates can be found in Title 42 C.F.R.
411.20. The CMS has a right of action to recover its payment from any entity,
including a beneficiary, provider, supplier, physician, attorney, state agency or
private insurer that has received a third-party payment.8 Medicare’s independent
right of recovery was upheld in Zinman v. Shalala, 67 F.3d 841 (9th Cir. 1995)
Plaintiff/Claimant, counsel for both parties and the insurer can be held liable for
twice the amount of Medicare’s lien if its interests are not protected.9
Medicare’s subrogation rights are superior to any other lien or interest on the
proceeds of a damages award, including Medicaid, and apply even when
Medicare does not give notice of its claims to the beneficiary, the parties’
attorneys or the liability insurer.10 If the beneficiary is covered by both Medicare
and Medicaid, Medicare must be paid before Medicaid. If the amount due
Medicare is equal to or exceeds one-third of the gross recovery, Medicaid will not
6
See 42 C.F.R. §411.50(b)
7
Medicare Secondary Payer (MSP) Manual, Chapters 1 and 2. (Rev. 54, 07-21-06) See
http://www.cms.hhs.gov/manuals/downloads/msp105c01.pdf and
http://www.cms.hhs.gov/manuals/downloads/msp105c02.pdf.
8
See 42 C.F.R. §411.24(g)
9
See 42 U.S.C. §1395y(b)(2)(B)(ii)
10
Henretta, J. Thomas. “Health Care and the Law.” Trial. 38:10 (October, 2002). American Association of
Justice.
3
4. receive any recovery. If the Medicare recovery is less than one-third of the gross
recovery, Medicaid can seek reimbursement for the difference up to one-third or
for its share of up to one-third of the gross recovery.11
Further, as part of the new Medicare Prescription Drug Improvement and
Modernization Act, Medicare will not only screen ICD-9 (diagnosis) codes
relative to the injury concerned, they will also screen for any prescription drugs
which they deem are associated with that same injury. In some cases, a Medicare
Set Aside may be necessary for cases involving substantial future medical
treatment needs.
II. The Attorney’s Role
Given the intricacy of its rules, Medicare does recognize the role attorneys
play in assisting it with reimbursement of its conditional payments. Medicare will
reduce its lien by the same percentage as the attorney’s contract fee as
procurement costs in exchange for the attorney’s efforts, including:
a. Representing Medicare’s subrogation interests for payments made to the
beneficiary from the date of the injury to the date of the settlement;
b. Evaluating the possibility of the beneficiary’s future medical needs;
c. Disputing pre-existing and/or non-related payments by correctly
identifying relevant ICD-9/diagnoses codes and costs;
d. Filing required forms and providing relevant information to Medicare
regarding the injury claim and its resolution; and
e. Ensuring satisfaction of Medicare’s interests prior to disbursing any
settlement proceeds.
The Medicare statute itself does not address the subject of attorneys' fees
directly. However, regulations specify that Medicare will follow the fund doctrine
and reduce its recovery to allow for the costs of procuring the judgment or
settlement. 12 Medicare agrees that its recovery will be reduced by that amount
provided that attorneys' fees do not appear to exceed the prevailing standards in
the area.13
Concurrently, attorneys are also advocating for their clients with regard to the
required reimbursement of Medicare’s expenses as follows:
1. Preparing compromise and/or waiver requests and
negotiating with CMS for reduction of the Medicare lien.
11
Nichols, Christopher R. North Carolina Personal Injury Liens Manual, 1st Ed., Chap. 2, p.71. NCATL.
(2007)
12
42 C.F.R. § 411.37
13
See 2 Medicare and Medicaid Guide (CCH) ¶ 10.200.02, Medicare Carriers Manual, § 3340.6, Medicare
Intermediary Manual, § 3419.7.
4
5. 2. Assisting the administrator’s of a beneficiary’s estate with
satisfying any existing Medicare lien;
3. Identifying and disputing non-relevant payments made by
Medicare; and
4. Filing required forms and information with Medicare and
ensuring the process is completed in a timely manner.
III. How to handle a Medicare lien – “Step by Step.”
We have had a relatively good response rate from the MSPRC and COBC’s
since the centralization of Medicare in October, 2006. An overall change,
however, is that we have found that Medicare is reactive and we must be
proactive on behalf of our clients.
It may help you to know that all documents received by the MSPRC are
scanned into their computer system at the Detroit office. Then various COBC’s
access the documents via computers from locations across the county. This is why
you will see below that we not only call the MSPRC and COBC’s, we also follow
up with written communication. Further, there are statutory time limitations in
which the MSPRC must respond to your requests, thus, we always send any
documents to Medicare via certified mail. When talking to COBC’s, we always
keep notes on the date, time and who we speak to in order to maintain continuity
of response. This practice also helps us to immediately identify problems with our
submissions or puts the responsibility for the delay back into the
MSPRC/COBC’s office.
The following steps have proven to be effective:
1. Determine whether or not your client has Medicare at the
very beginning of your case. During our intake process, we
find out if the client is already enrolled, or will soon be
eligible for Medicare benefits. If they have Medicare we copy
the new client’s Medicare card and get all index information
(age, social security number, date of birth, name of spouse,
etc.) Copy the Consent to Release Form included with this
paper and have your new client fill it out at the intake visit.
2. Send in a Letter of Representation, along with the client’s
completed Consent to Release Form to the COB contractor at
the following address:
Medicare Coordination of Benefits (COB) Contractor
MSP Claims Investigation Unit
Post Office Box 5041
New York, New York 10274-0125
5
6. 3. Include in your letter the following information:
a. Client’s name;
b. Address;
c. Date of Birth;
d. Client’s Social Security Number;
e. Date of Injury;
f. Description of Injury,14 including the specific location of the
accident;
g. The name and address of the liable party and the liable party’s
insurance company;
h. Potential other insurance sources; and
i. The names and address of any attorneys or insurance adjusters
involved.
4. Send this letter via Certified Mail/Return Receipt
Requested. It is worth the added expense. You get a green
card back, signed by a real person, dated the day your letter
was received by the COB.
5. CALL THE COB OFFICE at (800) 999-1118. Their hours
of operation are 8:00 a.m. to 8:00 p.m. EST, Monday through
Friday, except holidays. Technically, you must call all new
claims in to the COB. However, we have found that creating
a paper trail also helps in the long run. Remember, a letter
alone is not sufficient notice to the COB of your
representation. A MSP Recovery Contractor (MSPRC) will
be assigned and all further written and telephonic
communication should go to that Contractor.
6. Ask for and write down the name of the person you speak
to.
7. Calendar 10 days from the date you call in the claim.
8. You and your client will receive acknowledgment of your
representation. You will also receive a Consent to Release
Form which your client must sign and return to the MSPRC
before Medicare will communicate with you about his/her
case.
If you have not received this letter and Release form in 10 days,
call the COB office again. By now you should have your green card back
14
If your client has already begun treatment, or has received Emergency care, include the ICD-9 codes on
this and all other correspondence to Medicare. Continue to add any new ICD-9 codes to your
correspondence as needed.
6
7. from the Post Office and you will also have the name of the person you spoke
to when you initially called in your client’s claim.
9. Return your client’s signed Authorization with a cover letter
to the MSPRC via mail to the following address:
MSPRC Liability
Post Office Box 33828
Detroit, Michigan 48232-3828
Telephone: (866) 677-7220
Fax: (734) 957-0998
Workers’ Compensation claims for North Carolina are handled
by the following office:
MSPRC WC
Post Office Box 33831
Detroit, Michigan 48232-3831
10. FAX YOUR COVER LETTER AND CLIENT’S
AUTHORIZATION to the MSPRC office. You will now
have a confirmation sheet in your file showing the
information was sent to, and received by the MSPRC.
11. Work your case and continue to collect medical records and
bills relevant to your client’s case.
12. Once your client has reached MMI/Permanent and Stationary
status, prepare a letter to the MSPRC. At your “Re:” line,
insert “Client has reached MMI status.” Again, include the
discharge/final diagnosis ICD-9 codes in this letter. Include
the medical record which evidences the conclusion of your
client’s treatment. Ask for their Statement of Payments
Paid.15
13. Send the letter and documents via Certified Mail/Return
Receipt Requested.
14. CALL the MSPRC and let them know what is coming and
why. Ask for the Statement of Payments Paid.16 Take down
the name of the person you spoke to.
15
Some attorneys request Statements of Payments Made periodically throughout the pending of the lawsuit.
If your client is elderly with a history of multiple disease processes this is a good idea. You will have
additional time to separate out relevant vs. continuous non-relevant payments made by Medicare.
16
I have been told by one COBC that they must receive a verbal request for the Statement of Payments
Paid and the Final Lien Letter.
7
8. 15. FAX the letter (without accompanying documentation) to
the MSPRC.
16. Calendar 45 days.
17. If you do not receive the Statement of Benefits Paid in 45
days, call the MSPRC. You should have a signed/dated
green card, a fax confirmation sheet, and a name of a person
you spoke to about the information you previously provided.
18. Once the Statement arrives, go through it and be sure all
services paid by Medicare are relevant to your client’s injury
claim. Check the date of injury. Check the dates of service
and ICD-9/injury codes. Highlight those payments that are
not relevant, subtract those payments from the total, and
write your adjusted total on the Statement.
19. Provide copies of medical records which back up your
adjusted total. Highlight those portions of the medical
records which evidence your position.
20. Mail a highlighted copy of the Statement, relevant medical
records (if any) which evidence your adjusted total, and a
cover letter which contains all of your client’s information,
and your suggested final total of Payments made by Medicare
via Certified Mail/Return Receipt Requested.
21. FAX your cover letter only (without documents) to the
MSPRC.
22. CALL the MSPRC and let them know you either agree with
their total of Payments made, or give them your disputed
total. Tell them your documents are on the way to them via
Certified Mail.
23. Calendar 14 days.
24. If you do not have a corrected Statement of Payments Made
from the MSPRC, (or a reason for their disagreement) call
them. You should have a signed/dated green card, a fax
confirmation sheet and a name of the person you spoke to.
25. Continue to calendar 14 days and call again until you receive
a final Statement of Payments made.
8
9. 26. Your client’s claim should be close to settlement, mediation,
arbitration or trial. You will have a pretty accurate idea of the
amount of Medicare’s final lien. (Of course, you will not
have a DEFINITE lien amount until you receive the Final
Lien Letter.) Notify the MSPRC of any upcoming
mediation, arbitration or trial dates in writing and by
phone. Although the MSPRC will not attend these events,
they are entitled to be notified of them.
27. Once your client’s claim has been resolved with the third
party, prepare your Settlement Statement, including
Medicare’s lien amount. Make sure you have itemized your
costs. (Optional: You can also include a copy of your client’s
contingency fee agreement indicating the attorney’s fee
percentage. This is not required unless there is a question by
the MSPRC or if the attorney’s fee exceeds 40%, but since
producing any additional documents allows them an
additional 45 days to respond, it may be more expedient to do
so.) Request a Conditional Payment Letter.
28. Medicare recognizes Procurement Costs related to the
attorney’s efforts in recovering/reimbursing Medicare for the
conditional payments it has made on behalf of a beneficiary.
Medicare will reduce its lien by the same percentage as your
attorney’s fee percentage as stated in his/her contract with the
client. Here is how to figure that reduction17:
1. Total Amount of Liability Settlement: $
_________
Amount of Medical Payment Settlement: + $
_________
TOTAL Received (Item A) $
_________
2. Amount of Attorney’s fees $ _________
Other Procurement expenses/costs + $ _________
TOTAL Fees/Costs (Item B) $ _________
3. (Item B) $ _________ ÷ (Item A) $ ________ =
RATIO _________
4. LIEN x RATIO = $ _________ (Reduction Amount)
5. LIEN - Reduction Amount = FINAL LIEN
17
Courtesy of Attorney Christopher Nichols. This formula can be found on his blog at :
www.nctriallawblog.com/north_carolina_trial_law_/medicare_liens/index.html.
9
10. 29. Send your Settlement Statement to the MSRPC via mail with
a cover letter requesting a Conditional Payment Letter.
Include the Settlement Information Form, Release of All
Claims, Medicare’s Consent to Release Form, your Contract
for Legal Services and copies of all medical charges incurred
by your client. Fax your cover letter and all docs to MSPRC.
30. Call the MSPRC and let them know your Settlement
Statement is coming and request a final lien/payment letter.
31. Calendar 14 days. The MSPRC has 45 days from the time of
notification of settlement to provide a final lien/payment
letter. However, we call, write and fax every 2 weeks to be
sure our client’s file does not drop out of the system.
32. If you don’t have a Final Lien letter after 14 days, call, write,
fax again. You know the deal!
33. Medicare will send the Final Lien/payment letter and will
want to know if you agree that their calculation is correct. If
you agree, send a check for the amount of the lien to
Medicare at the address provided in the letter. You have 60
days from the date the Final Lien/payment letter is sent to
reimburse Medicare. If your payment is sent to the wrong
address, or is for an incorrect amount, or in the incorrect
name, the deadline will not be tolled and the attorney or
client could be assessed interest if the corrected check is not
sent within that 60 days limit.18
IV. How to Request a Reduction/Waiver of a Medicare Lien
Medicare will consider requests for waivers under §1870(c) of the Social Security
Act, which is a request based strictly on financial hardship. As a practical matter,
Medicare rarely waives its lien, but more often will reduce its lien. A decision by
Medicare to reduce its lien is based on the inability of the debtor to pay the full amount
within a reasonable time and the inability of the government to collect within a
reasonable time when the debtor refuses to, or cannot pay. The criteria used by Medicare
when evaluating a request for reduction and/or waiver of its lien is as follows:
1. The beneficiary must be without fault;
2. Recovery would effect financial hardship, and/or
3. Recovery would be against equity and good conscience using
the following criteria: 19
18
Nichols, Christopher R. North Carolina Personal Injury Liens Manual, 1st Ed., Chap. 2, p.64. NCATL.
(2007)
19
§1870(c) of the Social Security Act
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11. a. The degree of financial hardship caused by the recovery;
b. The extent the beneficiary’s state in life would be altered;
c. Medicare’s recovery amount exceeds the settlement amount; and
d. The extent the beneficiary can meet non-covered out-of-pocket
accident-related expenses.20
Examples of financial hardship from the Medicare Secondary Payer (MSP)
Manual, Chapter 7- Contractor MSP Recovery Rules are attached so that you can read the
rationale applied by Medicare for deciding whether to grant a waiver or reduction of their
lien.
The attorney representing the beneficiary may request a waiver/reduction by
completing a CMS/SSA form SSA-632-BK and returning it to the MSPRC.21 The actual
decision to waive or reduce Medicare’s lien is made by the CMS office in Atlanta, but all
documents sent will be forwarded to the CMS office.22 Keep in mind, however, that
Medicare will not consider a waiver request until the client receives the third-party
payment.23
The Medicare contractor is required to make a waiver decision within 120 days
from the date the waiver request is received. (Needless to say, continue to calendar this
date and mail, fax and call in your request to document and preserve that time limitation.)
A copy of the SSA-632-BK form is attached and can also be accessed at
www.ssa.gov/online/ssa-632.pdf. Please note the types of documentation required by
Medicare and plan to spend some time with the client obtaining all of the personal
information needed. In many cases, especially if the client is elderly with many
underlying conditions, or the settlement funds are outweighed by the amount of medical
bills, we complete this form early in the process.
Medicare will consider the impact of unforeseen and severe financial
circumstances existing at the time of creation of the subrogation claim as well as the
impact of out-of-pocket expenses relative to the beneficiary’s resources to meet those
obligations. Medicare may grant a full or partial waiver if recovery would have an
adverse effect on the beneficiary’s standard of living as it existed prior to the
accident/injury/illness.24 However, to avoid interest charges, the amount indicated
due to Medicare in the Final Lien Letter should be paid within the 60 day time limit.
If a waiver/reduction determination is made in the beneficiary’s favor, Medicare will
issue a refund.
20
Medicare Secondary Payer (MSP) Manual, Chap. 7 (Rev. 54, 07-21-06) See
http://www.cms.hhs.gov/manuals/downloads/msp105c07.pdf.
21
50.4.2-Pre-Settlement Negotiations, Compromises and Discussions with Beneficiaries/Attorneys. MSP
Manual, Chap. 7: Contractor MSP Recovery Rules
22
Nichols, Christopher R. North Carolina Personal Injury Liens Manual, 1st Ed., Chap. 2, p.65. NCATL.
(2007)
23
See 20 C.F.R. §§404.506-404.512.
24
COB Fact Sheets: MSP Laws and Third Party Payers Fact Sheet for Attorneys.
www.cms.hhs.gov/ProviderServices/Downloads/thirdpartypayers.pdf
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12. V. Conclusion
Most paralegals will agree that dealing with Medicare and its lien process is a
time-consuming and labor-intensive process. I know of no quick solutions to this
problem. However, using the above system has proven to be efficient and
effective. Some steps may appear redundant or unnecessary, but they have been
developed over time while working on actual client files, talking with MSPRC
contractors, and referring constantly to Medicare’s own rules and regulations.
The new structure, implemented in October, 2006, has been an improvement
over the old system. I have found the majority of COBC’s to be open to questions,
ready to give advice, and willing to go to their supervisors when the system is not
working as it should. This is why I suggest always asking for the COBC’s name
when you are talking to them, and suggest establishing a relationship with them.
Once they know that you are willing to work with them to get resolution of these
claims, that you are, in effect, an advocate for seeing that the government’s
money is being reimbursed once a tortfeasor has been held responsible for
payment of medical bills incurred due to their negligence, they are willing to
assist you in getting what you need to resolve your client’s lien in a timely
manner.
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