Question
Although we have notified/submitted forms to Medicare of a 3rd party claim, we have not received a response yet. Do we need to repay Medicare?

A Note: What is my obligation as an attorney and what are risks to client of not getting lien/subrogation claim opened and paid?

Pennsylvania Attorney

Answer
Yes. Reimbursement must be made to Medicare for any conditional payments they have made that are related to your client's injuries. Federal law allows CMS to make claim or institute suit for recovery against all individuals and entities involved. Although the beneficiary remains primarily responsible, claim may be made against others, including an attorney for the beneficiary, third party insurers that funded the settlement and/or the tort feasor.

A release in favor of an insurer or its insured, or an agreement obtained by the attorney stating the debt is the responsibility of the beneficiary, does not preclude enforcement. There is also a procedure by which Medicare has the authority to refer non-collectible debts over to the United States Department of Treasury for possible offset of a beneficiary's monthly Social Security or Railroad Retirement benefits.

Section 42 CFR 411.23 states that a beneficiary must cooperate in any action taken by the Centers for Medicare and Medicaid Services in recovering conditional payments. Failure to do so or not protecting the Medicare program during and after settlement negotiations may result in CMS taking action against the beneficiary to collect the mistaken payment.

In the event that reimbursement is not made to Medicare as required by 42 USC 1395y(b)(2)(B)(I), action may be brought against any entity responsible for payment (and may collect double damages from insurance companies), or any entity that has received a third-party settlement. Under 42 CFR 411.24(g), this includes attorneys whose fees are paid from settlement proceeds. Please refer to US v. Sosnowski, et. al. where judgment was entered against a beneficiary and his attorney for failing to reimburse Medicare after receiving settlement proceeds on a personal injury case.

CMS has a direct right of action to recover its payments from any entity, including a beneficiary, provider, supplier, physician, attorney, State agency, or a private insurer that has received a third party payment, 42 CFR 411.24.

I hope this helps,
Mary Skinner

Question
Regarding dollar reporting threshold of $5,000, in mass tort cases or where there are multiple settlements paid out over time, is the reporting requirement for $5,000 in aggregate or only for a single $5,000 payment or above?

Answer
The answer is that the reporting threshold is considered in the aggregate, but where exceeded, each payment is to be reported separately. For liability settlements, the threshold for settlements, judgments, awards or other payments on or after January 1, 2010 through December 31, 2011 is any amount up to and including $5,000. In response to your question about how the threshold amount is applied, Section 11.4 of Version 2.0 of the User Guide states that “Where there are multiple TPOCs associated with the same claim record, the combined, cumulative TPOC amounts must be considered in determining whether or not the reporting threshold is met. However, multiple TPOCs must be reported in separate TPOC fields as described later in this guide.” This section goes on to state that “The threshold dollar and date ranges apply to the date when the threshold is met (the most recent TPOC Date). The COBC will use the most recent TPOC Date supplied on the claim report when checking the threshold ranges. Timeliness of reports will be determined based upon the applicable date for the TPOC which caused the threshold to be met (the last, latest, most recent TPOC Date reported on the claim record).

Section 11.10.2 of the User Guide reinforces the above and states that “…the sum of all TPOC amounts must be used when determining whether the claim meets the applicable reporting threshold. Use the most recent, latest TPOC Date associated with the claim when determining whether the claim meets the interim reporting thresholds defined in Section 11.4.”

Section 11.5 of the User Guide provides a detailed description of how multiple TPOCs need to be reported. The definition as used in the User Guide references above for TPOC is the Total Payment Obligation to the Claimant. The TPOC refers to the dollar amount of a settlement, judgment, award or other payment in addition to/apart from ongoing medicals. A TPOC generally reflects a one time or lump sum payment. A complete definition of TPOC is in Section 2 of the User Guide.

Sylvius von Saucken