Last week, the National Association of Medicare Set Aside Professionals (NAMSAP) held their annual conference in San Antonio, Texas. Personally, I was quite excited about the meeting and decided to attend because Judge Lee Yeakel, Judge, U.S. District Court (TX, Western District) would be speaking. It is rare to hear from a Judge sitting on the Federal bench about his insights on Medicare Secondary Payer (MSP) law. As Judge Yeakel decided the Humana vs Farmer’s Ins. Exchange case, further illumination on Medicare Advantage Plan (MAP) rights was expected. I came away with several important insights for the industry to consider when considering a MSP case before the Federal courts.
First, give thought to the record and whether it covers all aspects to be raised for a judicial determination. His Honor mentioned that activist Judges are disfavored and he can only apply the law to the facts presented. He is not allowed to make an independent investigation.
Second, the Court is not a policy making body. If the law does not provide for an expected outcome as advocated by a particular Party, then other options beyond the court should be explored to change it. The Party cannot expect for the courts to become activist to get the desired result.
Third, any law is to be interpreted on long established statutory construction principles of any ambiguity raised. This is clearly in the purview of the Judiciary to interpret the laws and therefore “shall” and “established” will be given “plain meaning” to determine applicability to situations.
Finally, the claim itself must be ripe. In other words, if there are procedural elements to the claim that have not been perfected, these imperfections must be clearly stated to support a dismissal. Lack of a record and attention to whether parties had the right to administrative appeal or even whether they were given proper notice if the claim, cannot be raised later policy discussion on what the law should be.
Though the discussion on the panel was somewhat contentious at times, the point that Medicare Advantage Plans (MAPs) have the same rights as Medicare can be distilled to a few points:
1. Do we have a primary plan involved? Yes, Farmers is a primary plan as defined under the Medicare Secondary Payer (MSP) law because it provides no-fault, workers’ compensation and liability benefits to Medicare beneficiary plaintiffs.
2. Did the primary plan “fail” to reimburse conditional payments? This requires an analysis of 42 USC Sec. 1395y(b)(2)(B)(ii). It essentially comes down to a conjunction and whether Congress intended reimbursement to apply to both Group Health Plans and Non-Group Health Plans that are both primary plans. This case answered it in the affirmative. Certain pale members did not agree and wanted to press for a re-hearing which was not the time or the place.
3. Is the MAP a party that can sue under the MSP law? Yes. The MSP law’s private cause of action does not identify who the plaintiff can be. It does identify the defendant, a primary plan that fails, but it that’s it. The court ruled as it did because there was no compelling reason to exclude a MAP. While prior decisions did rule and reject a MAP’s right to being a cause of action, those cases were interpreted under the United States right to litigate which is senate and apart from the private cause of action. As his Honor pointed out there is nothing private about an action by the United States.
4. Is the primary plan aware of the obligation? Yes. They were and rejected responsibility based on their interpretation of the law. The record was therefore absent of any issues involved how notice is to be provided and discussion over administrative appeal rights.
As we all know, his Honor ruled in favor of Humana because the statute was clear on its face. Judge Yeakel pointed out that he did not use Chevron Deference as a basis for his ruling and he expressed his concern about applying such a rule when matters did not involve technical and scientific matters before the court. His stern response was clear that the case was simply decided based on the statutory construction of the law based on its plain meaning.
The take-away from the panel was that Parties must prepare a good record to allow those issues to be addressed. For example, here are some issues that should be looked at in any MAP claim presented or subject to the private cause of action:
1. Was a claim for benefits presented to the primary plan, and if so, did the MAP provide clear evidence for the basis to disclose absent a HIPAA release from claimant?
2. Does the MAP claim detail administrative appeal rights granted to primary plan or does it fail for lack of providing method of due process?
3. Do claims go beyond what is covered by an item or service by traditional Medicare? If a MAP has the same recovery rights as the Secretary, then those rights by definition has to be limited to what traditional Medicare pays and not the generous add on benefits that go beyond MSP recovery rights.
4. Is the claim ripe? If there are defenses to the underlying loss have those been brought to the court’s or the MAP’s attention? For example, if a loss would not be paid because it does not comply with claim procedure rules as outlined by the Agreement or the claim is subject to investigation, then don’t we have a Caldera style defense?
Bottom-line take away is to not ignore MAP communications, but rather analyze them appropriately and establish a plan to defend if there is a decision to not pay. Your defense to not pay is inadequate if reliance is placed on the fact that the Medicare beneficiary has received the money. 42 CFR 411.24(i) will neutralize that position. Valid defenses that the policy will not allow the claim to go forward is much stronger. Do not allow your management of MAPs be carried away by intoxication of policy arguments. Stick to clear defenses, and join advocacy groups like the MARC Coalition to line up policy and the law.
Feel free to contact us for all MAP issues you may have at email@example.com.
Chief Client Officer