May 26, 2021

Lawyers Assisting Medicare Beneficiaries, Heed These Words of Warning

This article was adapted from the book The Art of Settlement, written by Jason Lazarus.   

Medicare is complex, to say the least. Medicare Parts A, B, C, and D all cover distinct but overlapping services. Meanwhile, Medicare eligibility is connected to Social Security Disability Income, and the Medicare Secondary Payer Act is a series of statutory provisions that would make even the most detail-oriented person’s head spin.  

Most lawyers find this area of the law very confusing at best and downright confounding at worst. While working with Medicare beneficiaries is worthwhile and valuable work, any lawyer who steps in to assist has a number of critical issues to consider. 

Lawyers assisting Medicare beneficiaries are personally exposed to damages and malpractice risks daily when they handle or resolve cases for Medicare beneficiaries. The list of things to be concerned about is growing daily. Drawing on recent cases, here are some of my top words of warning for any lawyer assisting Medicare beneficiaries. 

Don’t Ignore Medicare’s Interests 

The government takes its reimbursement rights seriously and is willing to pursue trial lawyers who ignore Medicare’s interests. On January 8, 2020, the United States Attorney William M. McSwain announced that “a Philadelphia-based personal injury law firm…entered into a settlement agreement with the United States to resolve allegations that it failed to reimburse the United States for certain Medicare payments.”  

As part of the settlement, like in other cases, the firm agreed to pay $6,604.59 to satisfy the debt owed to Medicare. In addition, the firm agreed to: “(1) name a person responsible for paying Medicare secondary payer debts; (2) train the employee to ensure that the firm pays these debts on a timely basis; (3) review any additional outstanding debts to ensure compliance; and (4) provide written certifications of compliance.” The firm also acknowledged that any future “failure to submit timely repayment of Medicare secondary payer debt may result in liability for the wrongful retention of a government overpayment under the False Claims Act.”  

The following quote from McSwain sums it all up: “Lawyers need to set a good example and follow the rules of the road for Medicare reimbursement. If they don’t, we will move aggressively to recover the money for taxpayers.”  

Cover Your Bases with Referrals 

Last year on November 4, 2019, the United States Attorney for the District of Maryland announced that a Baltimore-based law firm paid the United States $91,406.98 to resolve allegations that it failed to pay Medicare for conditional payments that had been paid on behalf of the firm’s clients. The press release indicates that the firm had entered into a joint-representation agreement with co-counsel who, in turn, didn’t reimburse Medicare at settlement. According to US Attorney Robert K. Hur, “Plaintiffs’ attorneys cannot refer a case to or enter into a joint-representation agreement with co-counsel and simply wash their hands clean of their obligations to reimburse Medicare for its conditional payments.” 

He went on to say, “[w]e intend to hold attorneys accountable for failing to make good on their obligations to repay Medicare for its conditional payments, regardless of whether they were the ones primarily handling the litigation for the plaintiff.”  

So, this is a warning to every attorney who might refer a case to another attorney that you can’t do so and avoid liability if Medicare compliance is ignored. The lesson is that when you refer a case to another firm you need to make sure you have three things: 1) a written fee agreement; 2) a copy of the lawyer’s malpractice insurance policy declarations; and 3) proof that the lawyer has engaged a lien resolution firm or has a compliant process to resolve Medicare Conditional Payment obligations. 

Develop a Comprehensive Medicare Compliance Plan 

In June of 2018, the US Department of Justice announced a settlement with a Philadelphia Personal Injury Law Firm involving failure to reimburse Medicare. The firm agreed to start a “compliance program” and the DOJ stated that this “settlement agreement should remind personal injury lawyers and others of their obligation to reimburse Medicare for conditional payments after receiving settlement or judgment proceeds for their clients.”  

The US Attorney’s office also stated, “When an attorney fails to reimburse Medicare, the United States can recover from the attorney—even if the attorney already transmitted the proceeds to the client. Congress enacted these rules to ensure timely repayment from responsible parties, and we intend to hold attorneys accountable for failing to make good on their obligations.” 

Consequently, in today’s complicated regulatory landscape, a comprehensive plan for Medicare compliance has become vitally important to personal injury practices. Here are six major elements to watch out for: 

  1. Not knowing what medical information/ICD codes are being reported by defendant insurers complying with Mandatory Insurer Reporting law  (MIR) created by MMSEA.  
  1. Agreeing to onerous “Medicare Compliance” language that may be inapplicable or inaccurate, which binds the personal injury victim.  
  1. Failing to report and resolve conditional payment obligations leading to personal liability. 
  1. Not using processes to obtain money back from Medicare using the compromise and waiver process.  
  1. Failure to identify a lien, such as those asserted by Medicare Part C lienholders thereby exposing the personal injury lawyer and the firm to double damages. 
  1. Inadequate education of clients about Medicare compliance when it comes to “futures” and the risks of denial of future injury-related care.  

So, what do you do? The answer is to develop a process to identify those who are Medicare beneficiaries in your practice and make sure that process is put into place to deal with the myriad of issues that can arise. 

Educate Yourself 

The government is very serious about and intent on enforcing the Medicare Secondary Payer Act. Failure by a lawyer to take appropriate actions with regard to reimbursement of Medicare when they make conditional payments, exposes that lawyer and his firm to potential enforcement actions by the government. 

Make sure you and your staff are educated about these various issues so you can identify problems before they become a malpractice issue or worse yet, a personal liability for any attorney involved in the matter.  

For more advice on Medicare compliance, you can find The Art of Settlement on Amazon. 

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