2010 Medical Professional 2010 Medical Professional Liability SymposiumLiability Symposium

Chicago, IL ~ March 18 & 19, 2010

MMSEA Section 111 Reporting: MMSEA Section 111 Reporting: The Elephant in the Room?The Elephant in the Room?

MMSEA Section 111 MMSEA Section 111 Reporting: The Elephant Reporting: The Elephant

in the Room?in the Room?Moderator:

Jim Blinn, MBA, Principal, Advisen Ltd.

Panelists:

Samuel D. Carucci, Esq., US Casualty Claims Manager,

Allied World Assurance Company

Paul Lavelle, President, LVL Claims Services LLC

Mark Popolizio, JD, Vice President of Customer Relations, NuQuest/BridgePointe

Lindsay Turner, Esq., Senior Associate, Wiley Rein LLP

Session OverviewSession Overview

• Overview of MMSEA Section 111

• The Challenges of Section 111

• Claims Issues and Medical Professional Liability Concerns

• Open Discussion

Chicago, IL ~ March 18 & 19, 2010

Overview of MMSEA Section 111Overview of MMSEA Section 111(Medicare, Medicaid, and SCHIP Extension Act of 2007)(Medicare, Medicaid, and SCHIP Extension Act of 2007)

Mandatory Insurer ReportingMandatory Insurer Reporting

Lindsay TurnerWiley Rein LLP

lturner@wileyrein.comwww.wileyrein.com/section111

Why are you here?Why are you here?

• You fear those $1,000 a day penalties for non-compliance with Section 111

• You know Section 111 will change your company’s claims handling and settlement practices

• You’ve heard CMS has changed the rules AGAIN

• You were assigned the coveted job of Section 111 Coordinator

Why did Congress Mandate Why did Congress Mandate Section 111 Reporting?Section 111 Reporting?

1980 Medicare Secondary Payer (MSP) Statute made P&C Insurers (also called Non- Group Health Plans or NGHPs) the primary payers

Statute permits recoupment of Conditional Payments from:• Medicare beneficiaries or their counsel• Providers who receive payment from insurer settlements• Private Insurers

Conditional Payments occur when Medicare pays because• It doesn’t know an NGHP claim exists or that the claim has

been paid• The NGHP claim won’t be resolved anytime soon

(Cont’d)

Why did Congress Mandate Why did Congress Mandate Section 111 Reporting?Section 111 Reporting?

• Problems Remain: CMS has had limited success pursuing recovery

of Conditional Payments from beneficiaries Medicare seldom learned about NGHP

settlements/claims payments NGHPs have had little incentive to identify

themselves as primary payers or have not been aware of claimant’s Medicare beneficiary status

Insufficient federal funds to ferret out NGHPs

• The Latest Fix: Section 111 Reporting

MMSEA Section 111: MMSEA Section 111: A Quick OverviewA Quick Overview

• Who reports? Responsible Reporting Entities (RREs) – typically the Insurer or Self-Insured Entity

• What is reported? All settlements, judgments, awards and other payments made to Medicare beneficiaries

• As compensation for/in exchange for release of: medical expenses Typically arising out of claims for bodily injury But also claims for pain and suffering/emotional

distress(Cont’d)

MMSEA Section 111: MMSEA Section 111: A Quick OvervieA Quick Overview

• Why? Medicare may have paid medical expenses related to these claimed injuries

• Both lump sum payments and payment of

future medicals must be reported TPOC: Total Payment Obligation to the

Claimant ORM: Ongoing Responsibility for Medicals Structured settlements/Medicare Set Asides not

required

What Insurers? What Insurers? What PoliciesWhat Policies?

• Section 111 requires “Applicable Plans” to report

• Why? Applicable plans are the primary plans under the MSP Statute and Medicare wants a roadmap to recover conditional payments

• For NGHPs this means: Liability carriers (including PL lines) and self-insured

entities No-fault insurance carriers Workers’ compensation plans and carriers

(Cont’d)

What Insurers?What Insurers?What Policies?What Policies?

• Major Issues Remain Unresolved Potential exception for undefined professional

lines Foreign insurers

• CMS doesn’t have regulatory powers under the Constitution to require all foreign insurers to report

Multiple Defendant/Mass Tort Settlements• Who reports?• Claims payments excluded by 1980 MSP cut-off date?

No-Fault Policies• CMS may be sweeping other policy types under this

umbrella

Reporting TimelineReporting Timeline

• NGHPs do not begin reporting until First Quarter 2011 (previously Second Q 2010)

• Push Back of Dates Triggering TPOC and ORM Reporting: TPOC Settlements: On or after October 1, 2010

(previously January 1, 2010)

ORM Settlements/Payments: Existing responsibility as of January 1, 2010 (previously July 1, 2009), regardless of initial date responsibility was accepted

Who Must Report? Who Must Report? RRE DeterminationRRE Determination

• RRE determination is “fact and situational” specific• CMS’ RRE directives contained in the 2/24/10 “Alert”• Generally, RREs fall within the following classes:

Carriers Self insurance

• Deductible v. SIR key determinant per new RRE guidelines Reinsurance, excess, umbrella, etc.

Fronting insurance Joint pools/JPAs State assigned claims funds Bankruptcy & liquidation

• TPAs & RRE status• Role and limitations of Section 111 “reporting agents”• Specific issues and considerations

Determining Medicare Determining Medicare StatusStatus

RREs required to determine CL’s Medicare status

• However, Section 111 does: NOT provide the process or procedure to use NOT require CL and/or his/her lawyer to release necessary

information to help make this determination NOT provide an informed consent provision.

• Issues & Considerations RREs must develop practice and protocol directed at

determining Medicare status CMS’ Query Function & Model Language

• Operating Mechanics• Limitations• Safe Harbor & Due Diligence Protections?

Section 111 “Reporting Section 111 “Reporting Triggers” & ExceptionsTriggers” & Exceptions

• Section 111 Reporting – In general• When Must I Report?

Two Reporting Triggers 1. Total Payment Obligation to the CL ---- TPOC 10/1/10

Base Date2. On-Going Responsibility for Medical --- ORM 1/1/10

Base Date TPOC v. ORM TPOC reporting exceptions:

• Interim Monetary Thresholds ORM reporting exceptions:

• Qualified• Special• WC

Section 111 “Reporting Section 111 “Reporting Triggers” & ExceptionsTriggers” & Exceptions

Issues & Considerations Determining TPOC Date “Assuming” ORM “Terminating” ORM Look Back Period Risk Management Write Offs, Gift Cards,

Good Will Gestures, etc.

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Mass TortsMass Torts

• Reporting

▫ Cost of reporting v. costs of not reporting

▫ Claim balance

• Defense Counsel

▫ Collecting data

▫ Protecting notice

• Settlements

▫ Use of trusts (468B)

18

Structured SettlementsStructured Settlements

• Data Collection

▫ Use of a third party

▫ Resistance from plaintiff?

• Future Medicals▫ Future CMS and the never ending trip

19

Medical Professional Medical Professional LiabilityLiability

• The claim within a claim within a claim and multiple reporting.

• How these cases will gum up the works.

Chicago, IL ~ March 18 & 19, 2010

Open Discussion