Legal Practitioners continue to seek guidance from Courts in absence of Centers for Medicare & Medicaid Services (CMS) rules on how to protect Medicare’s interest in a liability settlement. We field calls every day from frustrated attorneys and claim handlers because of their concern about taking the right action to protect Medicare’s interests post-settlement. CMS’ withdrawal of the NPRM on this issue from the Office of Management & Budget has left a void. The following case is an example of why rulemaking is necessary to avoid waste of precious judicial resources and unnecessary legal expense. Those in the MSP industry profess to “read the tea leaves” and conclude that it is only a matter of time before CMS announces new rules. However, it is anyone’s guess as to how long it will take to provide this needed structure.
In Berry v. Toyota, 2015 U.S. Dist. LEXIS 3319, the parties filed a Joint Motion to Determine the Need for Medicare Set Aside, for the purpose of complying with the Medicare Secondary Payer Statute. The court preliminarily held that it had jurisdiction to consider and rule upon the motion. Additionally, and interestingly, the United States submitted a letter to the court questioning whether the court truly had jurisdiction over the issues. The US Government was not taking a position, either way, as to the adequacy of the LMSA, but simply reserved its rights regarding any payments Medicare may be called upon to make on behalf of the Plaintiff.
The Berry court provides further clarification of the jurisdictional issues by conceding that exhaustion of administrative remedies would preclude the court’s jurisdiction if the parties were challenging a decision made by CMS. The court sidestepped the issue by articulating the issue as one of providing a determination into whether CMS’s interests have been adequately taken into account by the settlement to which the parties had agreed. The court references a strong public interest in resolving lawsuits, and parties to lawsuits in which an MSA is potentially at issue must necessarily look to the courts for answers.
If the money set aside to pay for Plaintiff’s post-settlement care and treatment was NOT adequate to protect Medicare then would such insufficiency fall squarely upon CMS? If the public interest is so strong on the issue of allowing for expedient settlements then should not CMS provide guidance to the liability professionals?
In Berry, the parties entered into a confidential settlement stemming from a motor vehicle accident. Plaintiff was a recipient of Social Security Disability Income and Medicare ultimately made payments related to the loss — $781.26. The amount of the settlement was confidential and not stated in the opinion. The court cites to case law regarding the fact that Medicare does not currently have a policy or procedure for reviewing or providing an opinion regarding the adequacy of the future medical aspect of a liability settlement or recovery of future medical expenses incurred in liability cases. See Big R Towing, Inc. v. David Wayne Benoit, et al, 2011 U.S. Dist. LEXIS 1392 (W.D. La 2011). We blogged about Big R Towing here.
This is where the case gets interesting, and we question whether the wheels of litigation, and all the court costs and attorney fees were even necessary: All of Plaintiff’s treating physicians provided affidavits attesting to the fact that Plaintiff’s care and treatment related to the incident had ceased. Not surprisingly, the court held that there is no need for a MSA in this case.
Franco Signor Commentary: Other than the questions contained in the above analysis, we would like to emphasize the fact that the motion practice here was not necessary. While CMS does need to solidify guidance, in the form of rules for liability practitioner to follow, Medicare has provided the liability community with Memorandums and processes to utilize in cases like Berry. One of the easiest ways to traverse the future medical issues is contained in a CMS Memo, dated September 30, 2011 (See a copy of that Memo, here). We continually provide our clients with forms for treating physicians to execute when it is clear there is no ongoing treatment related to the loss. We then incorporate such certifications in the Settlement and Release document. Issue solved.
It is past time for CMS to come forward with guidance on this topic. Settlements are being held up, court dockets are increasing, and elderly plaintiffs are dying before they can enjoy a settlement: All can be addressed if CMS were to provide a solution. However, cases like Berry do not need to see the inside of a courtroom. Call us today to assist with your Medicare Secondary Payer issues. We can help.