Medicare Lien Surprise: Don’t Ever Rely on a Conditional Payment Letter
Blog reposted from our Sponsor Synergy Settlement Services. The original blog can be viewed here.
An intriguing case, Mayo v NYU Langone Med. Ctr., just came out of the Supreme Court of New York, reminding the trial bar that when resolving a conditional payment for a Medicare beneficiary only the “Final Demand” letter is final. Reliance upon a “Conditional Payment Letter” (CPL) is inappropriate. The Mayo case revolved around whether a settlement agreement may be declared void, based on an incorrect assumption of the Medicare conditional payment amount. The conditional payment amount in this specific case had been no higher than $2,824.50 for about a year according to Medicare CPLs. The Parties entered into a settlement agreement, thinking that the Medicare lien would not exceed $2,824.50, and distributed the funds. After the funds were distributed, the Centers for Medicare and Medicaid Services (CMS) came back and issued a Final Demand of $145,764.08 for related medical care. In the end, the Plaintiff was successful in showing that the settlement agreement was based on the incorrect assumption that the Medicare lien would not exceed $2,824.50, and the Settlement Agreement was vacated.
Synergy’s lien resolution group has seen many cases like this one, where attorneys settle a case based on the assumption that they know the final Medicare lien amount, only to later receive a Final Demand which is much greater than anticipated. Fortunately, Medicare has recently released a tool which is very useful in avoiding such situations. Synergy regularly utilizes this tool to achieve exceptional results in cases for clients which have enrolled in this process prior to settlement. Using this tool can eliminate cases, like Mayo, where attorneys are surprised once they receive a Final Demand from Medicare.
The tool is the Final Conditional Payment Process and was part of the revamped Medicare Secondary Payer Recovery Portal (MSPRP), which came online in January 2016. CMS added functionality to the old MSP Web portal that allows users to notify them when the specified case is approaching settlement, and download time and date stamped Final Conditional Payment Summary forms and final amounts, before reaching a settlement. Additionally, the new portal ensures that relatedness disputes and any other discrepancies are addressed within eleven (11) business days of receipt of dispute documentation.
The process is straightforward and addresses many of the issues that have plagued the plaintiff’s bar in attempting to settle a personal injury action without any certainty of the repayment amount due to Medicare. The process begins when the beneficiary, their attorney, or another representative (SLRS), provides the required notice of pending liability insurance settlement to the appropriate Medicare contractor at least one hundred twenty (120) days before the anticipated date of settlement. If the beneficiary, their attorney, or another representative, believes that claims included in the most up-to-date Conditional Payment Summary form are unrelated to the pending liability insurance “settlement”, they may address discrepancies through a dispute process available through the portal. This dispute may be made once and only once. Following the dispute, CMS has only eleven (11) business days to resolve the dispute. If CMS does not respond within that 11-day window the dispute is automatically granted.
After disputes have been fully resolved, a time and date stamped Final Conditional Payment Letter may be downloaded through the portal. This form will only constitute the Final Conditional Payment amount if settlement is reached within 3 days of the date the Conditional Payment Letter was downloaded. If settlement is not reached within these 3 days, it does not negatively impact your case, but rather will kick you out of this process, and you will be unable to use the Final Conditional Payment Process again for that specific case.
To complete the process, within thirty (30) days of the settlement Medicare is provided the settlement information. This information will include the total settlement/award amount, attorney fee amount or percentage, litigation costs, and any “No-Fault” benefits directly received by the plaintiff. If this information is not provided within thirty (30) days, the Final Conditional Payment amount obtained through the Web portal will expire. To avoid what happened in New York, and to speed the resolution of all your cases involving a Medicare beneficiary, Synergy recommends utilizing all the tools CMS has made available to the trial bar.
Synergy Lien Resolution deals with Medicare on a daily basis. We can help make the process easier and more efficient by handling the resolution of conditional payments directly with Medicare on your behalf. To learn more online about our services, go to http://www.synergysettlements.com/service/medicaid-liens/medicare-conditional-payments/ Should you have questions about how to take advantage of these tools, or if they apply to your case please do not hesitate to contact our experienced and dedicated lien resolution team.
Medicare Lien Resolution Specialist