blackburn group inc.

April 2012

Efficiency in Liens and Medicare Conditional Payment Amounts

If the Conditional Payment is zero, can I assume that Medicare's Final Lien Demand will also be zero? This is a great question which has come up often in the past few weeks, and the answer is ... No.

Medicare's Secondary Payer Recovery Contractor (MSPRC) advises that if additional related claims are paid, the Conditional Amount will likely increase. This includes all Liability Insurance Policies or Plans (including a self-insured plan) and Workers' Compensation. The Right of Recovery that Medicare has is based upon the amount of Conditional Payments made for related services that were incurred prior to the date of settlement, judgment, or award. By thoroughly performing all necessary Lien Verifications and Negotiations with the proper agencies you can strengthen the outcomes of your claim results. This will result in saving valuable time and money, therefore helping to alleviate any potential fines and penalties that could be levied against you.

Workers' Compensation Set-Aside (WCSA) Arrangement Letter To COBC

Did you know that there is a WCSA Arrangement Letter that Medicare Secondary Payer Recovery Contractor (MSPRC) sends to the Coordination of Benefits Contractor (COBC) when there is no Workers' Compensation Medicare Set-Aside auxiliary record established for the case? The Statutory Medicare Secondary Payer (MSP) provisions preclude Medicare from paying for a beneficiary's medical expenses when payment has been made, or can reasonably be expected to be made under a Worker's Compensation or Liability Insurance Policy or Plan (including a self-insured plan). So always be sure when Medicare is the Secondary Payer, you have the appropriate Medicare Set-Aside in place. This will avoid any unnecessary actions by Medicare so that you will be compliant under the law versus being faced with any potential fines, interest, and penalties.

Property Rights and Medicare Set Asides

On March 7, 2012, the Illinois 3rd District Appellate Court provided an opinion upholding the trial court's decision of allowing a split of the amount allocated to a Medicare Set Aside. In the case of the Marriage of Christopher Washkowiak and Rosa Washkowiak, 2012 IL App (3d) 110174, Christopher Washkowiak appealed from the lower court's order awarding his ex-wife Rosana Washkowiak, $12,250, a figure which represented 17.5% of the portion of his workers' compensation settlement that was placed in a Medicare Set-Aside trust account.

For the majority opinion, Justice Wright stated that "The MSA fund is set aside to pay the first $70,000 of any future medical bills petitioner may incur as a result of the work related injury. If he incurs no such bills, he gets the money back. If he does incur such bills, he pays them from the MSA. The money does not go to Medicare. In essence, in settling his workers' compensation claim, petitioner agreed to earmark $70,000 for his future medical bills. In settling the property claims in his marital dissolution, petitioner agreed that monies identified for "medical payments" would be part of the "net proceeds."

For the dissenting opinion, Justice McDade stated that "it appears, based on my review of the statutory provisions and administrative interpretations, that the only circumstance where a claimant may possibly be allowed to "get the money back" is when he or she dies. Even in this situation, however, a claimant's estate is only entitled to the remaining MSA funds after all of Medicare's interests have been satisfied. The majority's assertion that petitioner "gets the money ($70,000) back" if he does not incur any medical bills is not only unsupported, it is superficial and misleading."

The link to the full opinions is available below. In the future, it will be interesting to follow how the courts will interpret the issue of a Medicare Set Aside when confronting property rights for other Workers Compensation or Liability casualty cases.

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