Compliance Update – A Roundup of the Latest in Medicare and Medicaid Secondary Payer News
Heather Sanderson
March 6, 2018

WCRC Transition Webinar to be Held Wednesday, March 7, 2018 at 1:00 PM EST

Effective March 19, 2018, Capitol Bridge LLC will take over as the Workers’ Compensation Review Contractor from Provider Resources. On this webinar, CMS will introduce Capitol Bridge with opening remarks and a presentation by CMS, as well as provide a Q&A session for the audience. The link to the webinar announcement can be found here. We will provide an update summary after the webinar is conducted, and hope that CMS addresses any procedural changes that may occur with the new contractor, such as turnaround time requirements and when Provider Resources will implement its new voluntary LMSA review program. More information on the anticipated LMSA review process can be found in a recent CLM article by Roy Franco and Heather Sanderson, which can be found here.

Murray/Ryan Repealed, However States Continuing to Increase Medicaid Third Party Liability (TPL) Enforcement

We recently blogged regarding the Murray/Ryan deal being repealed and that state Medicaid agencies may now only recover from the medical portion of the settlement. However, payers of claims with Medicaid beneficiaries should not rest easily just yet. West Virginia House Bill 4392 was recently amended to provide more strict enforcement of West Virginia’s TPL laws. Several of the provisions which are concerning, and would increase recoveries of Medicaid liens include: giving the Department of Health and Human Resources (DHHR) a priority right to be “fully reimbursed” (instead of “paid first”) out of any payments made to the recipient for past medical expenses before the recipient could recover any of his or her own costs for medical care; requiring the settling parties to obtain DHHS’s consent before finalizing a settlement, unless the amount of the settlement is sufficient to “fully reimburse” the amount of the Department’s subrogation lien; and lowering the exemption threshold from a $20,000 settlement to a $1,500 DHHS lien. It remains to be seen whether West Virginia House Bill 4392 will be enacted. Franco Signor will continue to work through the Medicare Advocacy Recovery Coalition (MARC) on this issue.

Maryland District Court Dismisses Widow’s Claim Alleging that CMS May Not Recover Wrongful Death Proceeds  

In a decision out of the United States District Court for the District of Maryland, Weiss v. Price, 2018 U.S. Dist. LEXIS 35078 (March 5, 2018), a Plaintiff widow sought a declaratory judgment that CMS did not have interest in the funds she received as part of a wrongful death settlement. The Plaintiff previously had appealed CMS’ desired recovery of $26,404.20 that Medicare had paid conditionally for medical treatment on behalf of her deceased husband, after she had allocated her settlement funds between her deceased husband and the Estate. When the Plaintiff received an unfavorable outcome at the Medicare Appeals Council level determining that CMS did have a right to recover its conditional payments, she filed this action in Maryland District Court.

The court found that not only did it not have subject matter jurisdiction over the matter, but that she did not have standing in her individual capacity because she was not a party to the administrative appeal and had not yet obtained a final judgment from the Agency.  There are two important reminders regarding Medicare conditional payments from this decision: 1) Parties must fully exhaust administrative remedies in the conditional payment appeal process prior to seeking judicial intervention. More information on the conditional payment appeals process can be found in our prior blog here. 2) CMS is not bound by an allocation unless it is determined via an evidentiary hearing on the merits of the case. Because the allocation here between her deceased husband and the Estate was determined via settlement agreement, CMS will likely continue to demand its conditional payment recovery as the Plaintiff continues through the administrative appeals process.