U.S. District Court Judge Orders Medicare Beneficiary to Provide Social Security and /or Medicare Identifying Information to Defendants in Liability Discovery Dispute.
Roy Franco
May 22, 2010

Is a Medicare beneficiary required to respond to legal discovery for Medicare information before a case is resolved through settlement, award, judgment or other payment?  One U.S. District Court out of Nebraska has recently said yes in the case of Gary E. Seger et. al.  vs. Tank Collection, LLC et. al (2010) U.S. Dist. LEXIS 49013.  The ruling no doubt will have repercussive effects for the plaintiff bar as it certainly chips away at sacrosanct state collateral source rules.  However, the decision should not come as a surprise given the current statutory construction of 42 USC §1395y(b)(8), otherwise known as the Medicare & Medicaid Schip Extension Act of 2007.

This relatively new law requires all liability settlements, awards, judgments or other payments made to Medicare beneficiaries be electronically reported by those entities making the payment to the Centers for Medicare & Medicaid Services (CMS).  Data elements required for reporting compliance are extensive and failure to provide the complete information in a timely manner results in a penalty of $1,000 per day for each case.  As a consequence, liability defendants have been grappling since the law’s inception for ways to secure the required information, the most critical being the Medicare beneficiary’s Social Security Number or Health Insurance Card Number which, before this decision, it had no legal access to.

Usually information of this nature is protected from disclosure.  Unfortunately, the present fiscal status of the Medicare Trust Fund, coupled with the inflexibility of CMS data systems, creates a peculiar situation.  In fact, CMS has promoted disclosure of this information.  (See CMS Alerts dated June 23, 2008 and August 18, 2009).  However, this is first case the author is aware of where a Court has followed suit.

In this particular case, plaintiff was severely injured in an on-the-job injury and became totally disabled.  He subsequently commenced an action against a third party alleging defective product design as being responsible for his disabling injuries.  During the pendency of his liability case the defense issued interrogatories requesting plaintiff’s  Social Security and Medicare information.  Plaintiff acknowledged his Medicare status, but refused to provide any identifying information which resulted in motion practice before the Court.

The particular interrogatories in question asked for the following information:

Interrogatory No. 4: If the answer [to Interrogatory No. 3 regarding enrollment in Medicare] is in the affirmative, state the following:

a. Medicare Claim Number;

b. Social Security Number;

c. Date of Birth;

d. Sex;

e. Current address; and

f. Attach a true and correct copy of your Medicare or Medicaid card.

Interrogatory No. 9: Attached to these Interrogatories is a Social Security Administration Consent of Release for Information. Will you consent to release of the Social Security Administrator information? If so, sign the Consent for Release of Information and return same to counsel for defendant Roundtable Engineering Solutions, LLC.

Defendant’s position was that the information sought was likely to lead to admissions, medical findings, or other evidence admissible at trial.  The defense further argued that without this information, defendant (and its insurer) would have difficulty evaluating plaintiffs’ claims as the defense would not have access to the amount Medicare had paid for the Plaintiff’s care.  Plaintiffs argued that the information was not relevant as defendant already had access to the medical and worker’s compensation records and that the reporting statute required this information after a case was resolved not before.  However, the argument that probably swayed the Judge was defendant’s retort that Plaintiff lacked any incentive to provide the required information after resolution of the case leaving the defendant unable to comply.  It is clear this had an effect when reading the Court’s analysis wherein it states:  “Until now, insurers wishing to comply with the CMS policy were often at the mercy of a plaintiff or claimant for information concerning Medicare entitlement, usually through a signed consent form from the claimant.”

Thus, the Court ruled that plaintiff did not meet his burden demonstrating the information being requested was burdensome or oppressive.  It appears Plaintiff’s position from the Court’s perspective was simply that Plaintiff refused to provide the information.  Defendant met its burden demonstrating relevance because the evidence defendant does need to know what the outer limits of Plaintiff’s medical expenses might be even though that information can be gleaned from medical records already provided.  More interestingly was the Court’s statement about the Extension Act in that while information to be submitted to CMS did not occur until after a final settlement or judgment, “there is no harm to the plaintiffs in providing the information sooner.”

Plaintiff lost and must provide either his Medicare Health Insurance Claim Number or his Social Security Number, and other identifying information, in answer to the interrogatories.  However, does that also include forcing plaintiff to execute the required consent form stated in interrogatory 9?  This poses an interesting question about whether that document would be a lawful consent.  Without that consent, defendant is no closer to having information about the medical expenses paid by Medicare, because Medicare is bound by the Privacy Act of 1974 which requires the beneficiary’s consent.

In the end, it appears the Court “split the baby” by providing the defendant with information it needs for compliance with electronic reporting but did not go as far as to give access to defendant to the payments, if any, made by Medicare.  If that is the case, the Court may be right in the “harmless” nature of the production, since such data would be required after case resolution.  However, if it indeed goes beyond simple production of identifying information, a good basis for appeal may exist on the validity of the consent ordered to be provided.

For practical purposes, Medicare Secondary Payer Act electronic reporting requirements will require RREs to collect the Health Identification Card Number from the Medicare beneficiary.   It would make sense for the parties to agree up front in a Scheduling or Status Order on how to approach this requirement.  Discovery is expensive and inefficient for this purpose and should be reserved for important matters of the case.  Collateral source issues will need to be considered and it may very well be that defendant, under the appropriate order of the case, will get the information needed for reporting, but only after a case is resolved.  In other words, the incentive for plaintiff to produce the information must be previously agreed to by the parties before settlement, not after.

By Roy A. Franco, Principal Franco Signor LLC

If you should want to discuss the case further, do not hesitate to contact the undersigned.  Our Company specializes in Medicare Secondary Payer Compliance for the liability case.  We offer services that include notification to Medicare, conditional payment identification, relatedness mitigation, release language and assistance in reviewing future medical considerations.  We look forward to hearing from you.