55 Ferncroft Road Suite 201
Danvers, MA 01923

(866) 630-CPSC Toll-free
(978) 774-0540 Facsimile

www.CPSCmsa.com

55 Ferncroft Road Suite 201
Danvers, MA 01923

(866) 630-CPSC Toll-free
(978) 774-0540 Facsimile

www.CPSCmsa.com

CMS New Policy Memo

The Centers for Medicare and Medicaid Services (CMS) has recently published a new Memorandum on the use of life expectancy tables in MSAs. In this Memo, CMS has determined that effective 7/1/08, CMS will only accept life expectancies obtained from the CDC Table 1, “Life table for the total population.”  This will impact the amount of allocations effective 7/1/08. Particularly, it will increase the life expectancy for males and decrease the life expectancy for females based on these calculations. If you have any questions or concerns about how this impacts your MSP compliance procedures, please feel free to contact any one of our attorneys at 866-630-2772.

CMS Update

The Centers for Medicare & Medicaid Services (CMS) has started the process of consulting with impacted parties in developing the reporting requirements enacted in Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (S. 2499).

According to Doug Holmes at the U.W.C., representatives have begun to outline how CMS intends to administer these new requirements. Preliminary discussions have included the following points:

1. CMS plans to issue the guidelines for reporting data by July 1, 2008 to provide everyone with one year to prepare for the reporting required effective July 1, 2009;

2. CMS will accept three methods of reporting - web based, direct electronic, and third party electronic;

3. Reporting will be required at the time of payment and/or when claimant compensability is determined;

4.The focus will be on claims going forward on or after July 1, 2009. Claimants meeting the definition of those to be reported prior to July 1, 2009 are not required to be reported under the new law;

5. CMS understands that everyone will not begin reporting at day one and will first concentrate on the larger plans (80/20 rule);

6. CMS will provide no safe harbors;

7. Each plan must address compliance with the new requirement;

8. Reporting formats are being developed for use based on the ISO universal reporting formats.

As additional information is received, we will certainly keep our clients advised. However, I would also encourage anyone looking to stay on top of these issues to consider joining U.W.C. - Strategic Services on Unemployment & Workers' Compensation. The phone number is 202-223-8904 or visit them on the web at www.uwcstrategy.org.

Case Law Update:
Fisher v. Clarendon National Insurance Company

By: Peter Belsito, Esq.

A recent decision from the United States District Court, W.D. Missouri, Central Division granted a carriers Motion to Dismiss on the grounds that the plaintiff did not have standing to sue under the MSP statute until there was a final determination of the workers’ compensation claim.

In Fisher v. Clarendon National Insurance Company, 2008 WL 191813 (W.D.Mo.), Med & Med GD (CCH) P 302,314, the Plaintiff Margaret Fisher sued Defendant Clarendon National Insurance Company in Missouri state court for reimbursement of Medicare's payment of her medical bills and expenses under 42 U.S.C. § 1395y, otherwise known as the Medicare Secondary Payer Statute.

Fisher, a Massachusetts resident, was employed as a long-haul truck driver when allegedly she was injured on November 23, 2001. The employer, New Prime is based out of Springfield, Missouri and purchased its workers compensation insurance from Defendant Clarendon.

At the time the claim was filed in U.S. District Court, there was a pending workers’ compensation claim before the Missouri Labor and Industrial Relations Commission (LIRC). As such, Clarendon refused to reimburse Medicare for Fisher's medical expenses until the workers compensation claim was properly resolved.  Fisher asserted this refusal to pay breaches “the terms of the workers' compensation policy.”

In her petition, Fisher argues that Clarendon was liable for the medical costs associated with her injuries under § 287.300, RSMo, otherwise known as the Missouri Workers Compensation Statute. As a result, Fisher argued  that Clarendon must repay Medicare for her medical expenses under 42 U.S.C. § 1395y, which states in part: “A primary plan, and an entity that receives payment from a primary plan, shall reimburse the appropriate Trust Fund for any such payment made by the Secretary under this subchapter with respect to an item or service if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service. A primary plan's responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon the recipient's compromise, waiver or release (whether or not there is a determination or admission of liability) of payment for items or services included in the claim against the primary plan or the primary plan's insured, or by other means.” 42 U.S.C. § 1395y(b)(2)(B)(ii).

The MSP statute creates a private right of action for double damages when a primary plan fails to provide primary payment or appropriate reimbursement. § 1395y(b)(3)(A). Clarendon argued that under the MSP statute, there is no private right of action until liability has been determined, primarily relying on Glover v. Philip Morris USA, 380 F.Supp.2d 1279 (M.D.Fla.2005), and Graham v. Farm Bureau Insurance Co., No. 07-0241, 2007 WL 891895 (W.D.Mich. Mar. 21, 2007). “Considering the provisions of the MSP together, there are three elements of the MSP's private cause of action: (1) a primary plan, (2) that is responsible to pay for an item or service, and (3) that failed to make the appropriate payment to Medicare for the item or service.” Glover, 380 F.Supp.2d at 1290. Regarding the second element, “Section 1395y(b)(2)(B)(ii), as amended by the MMA, requires a primary plan to reimburse Medicare ‘if it is demonstrated’ that the primary plan ‘has or had a responsibility’ to make payment for an item or service.” Id.

Fisher argued that this case is different than Glover and Graham because those cases involved tort actions, whereas this is an action upon an insurance contract. As such, she contended that Clarendon, through its insurance policy, agreed to cover her health care costs.

However, the Court properly ruled that they cannot establish Clarendon's liability under the policy without first determining whether Fisher's injuries arose out of and in the course of her employment. That determination is solely within the exclusive and original jurisdiction of the LIRC, where Fisher has a pending workers' compensation claim. Fisher may not avoid the LIRC's exclusive jurisdiction by framing her cause of action as a Medicare reimbursement claim. As such, the court sided with Clarendon and granted the Motion to Dismiss.

Conferences

Notes & Briefs:

Q: What is a MSCC?

A: The Medicare Set-aside Consultant Certified (MSCC) credential is designed to identify those professionals who work within the workers’ compensation benefit system as either a health care professional, legal representative, or as an insurance claims adjuster, who have achieved specific pre-approved training in Medicare set-aside trust arrangements, and have demonstrated a breadth of knowledge regarding the development and application of the Medicare set-aside trust arrangement process. Additionally, this credential is designed to express to the consumer that the person holding the MSCC credential has agreed to come under the scrutiny of a certifying review board (CHCC), to be peer reviewed, and to adhere to a set of standards governing ethics and professional behaviors.

Lots of questions have been raised about this designation as the CHCC recently announced the need for recertification. For those of you interested in training / recertification, the following programs are available:

(1)                 National Alliance of Medicare Set-Aside Professionals offers Webinars and an online course that would meet the requirements.  www.NAMSAP.org

(2)                 The University of Florida will be sponsoring a live program on September 4^th and 5^th in Orlando. Contact Sheri Jasper at 407-977-3112