On the latest episode of PI Today Podcast, host Denè Jones, Chief Compliance Officer at Pacific Crest Healthcare IPA and a self-described "Medicare nerd," sat down with our very own Marty Cassavoy to have an insightful conversation about Medicare compliance in personal injury cases. Marty is an attorney who has practiced only Medicare compliance for 20 years and chairs the MARC Coalition, an industry group that pushes to make the Medicare program run more smoothly. The conversation was a practical crash course in Medicare Secondary Payer (MSP) compliance for personal injury attorneys. Here are the key takeaways.
Who Counts as a Medicare Beneficiary?
Marty sorts beneficiaries into three groups:
- People 65 and older: This is the largest group.
- People on Social Security Disability Insurance (SSDI) for more than 24 months.
- People with end-stage renal disease: This group is much less common.
Age alone doesn't settle the question. A 30-year-old client could already be receiving SSDI. A client could also be months away from enrollment when the case settles. If a client is nervous that a settlement might interrupt their benefits, that is a strong sign to check their Medicare status.
What MSP Compliance Actually Means
The Medicare Secondary Payer statute is simple at its core. Medicare can't pay for care that another party is legally or contractually responsible for. Workers' comp has been covered since Medicare began in 1965. Liability and no-fault insurance were added in December 1980.
When a case settles, Medicare treats that settlement as the responsible party's payment. That creates two concerns:
- Past care: Medicare can recover its conditional payments from the date of injury to the date of settlement.
- Future care: Medicare also expects the settlement to cover related future medical treatment.
The goal is to keep insurers from shifting their costs onto taxpayers.
Why Settling Isn't the End of the Story
Carriers must report settlements with Medicare beneficiaries within one year. That means Medicare may not learn about a case until 10 or 11 months after it closes. By then, the file is put away and the client may have spent the money.
If the conditional payment lien wasn't addressed, the consequences can be serious. If a beneficiary ignores a demand from Medicare (and they often do) the government can offset that person’s Social Security check. Those offsets can reduce Social Security payouts by up to 15% a month. Medicare can also pursue the plaintiff attorney personally because the settlement passed through the attorney's trust account. Medicare has sued attorneys successfully before and there are several instances of U.S. Attorney’s Offices reaching agreements with law firms over ignoring these requirements.
Liens: The Portal Helps, but Only Partly
Attorneys have gotten much better at handling liens since Medicare launched its online portal last decade. Disputes and appeals can now be handled online, with responses in about 30 days.
The catch is that the portal covers only Medicare Parts A and B. Medicare Advantage plans aren't included. A client on an Advantage plan may show a $0 conditional payment in the portal while the Advantage plan has actually paid their bills. Each Advantage plan has its own process, and some are slow. Marty's tip is to tell the plan the case is settling tomorrow, which tends to get a quick response.
Don't Forget the Futures
Marty says future medicals are where plaintiff attorneys most often fall short. Medicare doesn't formally require Liability Medicare Set-Asides (LMSAs). Internally, though, it expects liability settlements to fund future related care, just as comp settlements do.
The good news is that attorneys don't have to hand Medicare everything. If a case settles at a discount, the allocation can be reduced by the same proportion. It is also fine to conclude that Medicare has no future interest if the injured party has maximized their recovery and needs no future care. What matters most is that the settlement language shows Medicare's interest was reasonably considered, and explains why. Marty recommends at least one paragraph in the release covering:
- the status of past conditional payments,
- a road map for resolving them after settlement; and
- an explanation of post-settlement medical needs.
Real Numbers, Not AI Guesses
Denè raised a growing trend of attorneys running Medicare compliance and cost projections through low-market AI programming. Marty cautioned against it. AI can produce a confident but wrong evaluation of a claim and that can lead to severe problems for beneficiaries. Medicare reviews are done by humans, and they vary from one regional office to another.
A nurse or medical cost expert can produce a defensible projection in about 10 days to two weeks. That cost is small compared with what's at stake in larger cases that take months and even years to resolve.
Adding Value to Every Case
These tools can raise case value even when Medicare isn't involved. A few points stood out:
- Pricing: LMSAs use usual and customary rates rather than workers' comp fee schedules. A surgery valued at $27,000 in comp might be worth $50,000 to $60,000 on the liability side.
- Revisions: Projections should include expected repeat procedures, such as knee replacement revisions roughly every seven years, over the client's life expectancy.
- Delayed surgery: A client who doesn't want surgery yet still needs it counted. They may be waiting for a daughter's graduation or caring for a grandchild. Be mindful of the individual’s condition and unique needs, because every case is different.
- Weight-loss requirements: When surgery depends on losing weight, GLP-1 medications now make that realistic. Marty would negotiate to include both the medication and the surgery in the settlement.
The Bottom Line
ExamWorks Compliance Solutions is available to help assess the effect of these and other changes to your reporting program. Should you have any questions please contact your local ECS regional compliance consultant, ECS MIR Service Support, or the ECS Compliance Team at mspcompliance@examworkscompliance.com.
