CINCINNATI, OH -
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Recent court decisions in Nebraska and Connecticut highlight an emerging trend in Medicare Secondary Payer (“MSP”) Act compliance for reporting purposes. Insurance carriers and self insureds may face steep penalties for failing to report certain information about settlements, awards, judgments or other payments that involve a Medicare beneficiary under Section 111 of the MMSEA (42 U.S.C. §1395y(b)(8)) . But the process is not a one-way street.
In Seger v. Tank Connection, the Medicare beneficiary/injured party refused to provide the information requested by the Defendant regarding the injured party’s enrollment in Medicare Part A or B. The Defendant asserted it was seeking the requested information to aid its insurer in complying with the MMSEA. The Court found that the Defendant met its burden of proving the relevance of the requested information. Moreover, although the MMSEA does not require this information be submitted to the Centers for Medicare and Medicaid Services (“CMS”) until after a final settlement is reached or judgment is issued, the Court averred that there was no harm to Plaintiff in providing the information sooner. Plaintiff was compelled to provide either his Medicare Health Insurance Claim Number or his Social Security Number (“SSN”), and other identifying information to Defendant.
Hackley v. Garofano, a progeny of Seger, expands the disclosure of private information beyond the litigated case. This case derived from a motor vehicle accident involving a minor. The minor was injured in the accident and an action was brought by the minor’s father on behalf of his child. The Court concluded that it was permissible for the insurance carrier to condition its disbursement of settlement funds on a settlement provision requiring Plaintiffs to provide insurer with each SSN of the Plaintiffs. The Court stated that the MMSEA allowed insurers to check insureds’ SSNs even if they did not qualify for Medicare. The Court also ruled that, while the parties had agreed on the amount of the settlement, they had not reached an unambiguous agreement as to all of the terms of the settlement. Therefore, the Court stated that there had been no meeting of the minds as to the terms of settlement, specifically disclosure of the confidential information, and consequently, the Court refused to require the settlement to proceed.
Policy Arguments for Plaintiffs to Disclose Private Information:
1.Compliance with Federal regulations.
2.Prior to the enactment of MMSEA Section 111 reporting, the defendant was at the mercy of plaintiffs or claimants to supply information concerning Medicare entitlement. Therefore, rather than having to rely on plaintiffs' representations, the statute expresses a preference for a standardized procedure with which the insurer can make the determination itself electronically, as set forth in the User Guide Version 3.1 (published July 12, 2010).
3.There exists a governmental need to prevent abuse of the Medicare program and to assure governmental programs are reimbursed (where appropriate).
4.It is a reasonable, necessary and permissible requirement in order to protect Medicare’s interests when a Medicare-eligible person receives a verdict or settlement in a personal injury case as the use of SSN and other information assists with the coordination of benefits process.
5.Privacy policies already in place to protect the claimant’s information assurance that this personal identifying information will not be compromised.
Practical Arguments for Plaintiffs to Disclose Private Information:
1.Simple mechanism (Query Process or electronic verification of Medicare enrollment status) to assure Medicare’s interests are protected.
2.Insurance companies already have privacy policies in place to protect the claimant’s information and provide assurance that personal identifying information will not be compromised.
These two recent decisions reinforce the right of a defendant insurer to compel provision of a plaintiff’s SSN and/or Health Insurance Claim Number in order to comply with the mandatory insurer reporting required by §111 of the MMSEA.
NOTE: Hackley also stands for another important proposition. In regards to the second issue addressed by the Court, whether there was an unambiguous agreement to settle the case, the Court held there was no meeting of the minds as to the settlement agreement. An essential term, disclosure of the private information was not discussed before acceptance of the settlement and therefore was no agreement to settle. It appears that courts are willing to compel disclosure of certain pieces of information in the name of the MMSEA, but many settlements may not be settlements at all due to the inclusion of language that was never negotiated upon or agreed to as part of the settlement process.
Garretson Resolution Group:
The Garretson Resolution Group (www.garretsongroup.com) will continue to closely monitor how these decisions and others like them impact tort settlements and lien resolution. We will also investigate and report on any similar developments involving the Medicare Secondary Payer statute.
For further details regarding how the Garretson Resolution Group can assist with the resolution of healthcare reimbursement claims in liens in single event and mass tort settlements please contact Tate Johnson (firstname.lastname@example.org, 513.794.0400 or 888.556.7526.) We would be honored to assist any parties determine their Medicare compliance obligations.