Upload
others
View
6
Download
0
Embed Size (px)
Citation preview
ERISA Liens and Reimbursement Claims
Against Personal Injury Settlements:
Negotiating and Resolving Claims Maximizing Settlement Awards by Narrowing the Claim and Challenging Unreasonable Charges
Today’s faculty features:
1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
The audio portion of the conference may be accessed via the telephone or by using your computer's
speakers. Please refer to the instructions emailed to registrants for additional information. If you
have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.
THURSDAY, JUNE 11, 2015
Presenting a live 90-minute webinar with interactive Q&A
Andrew D. Myers, Attorney, Law Offices of Andrew D. Myers, North Andover, Mass. & Derry, N.H.
Brett Newman, Managing Partner, The Lien Resolution Group, West Nyack, N.Y.
Franklin P. Solomon, Founding Partner, Solomon Law Firm, Cherry Hill, N.J.
Tips for Optimal Quality
Sound Quality
If you are listening via your computer speakers, please note that the quality
of your sound will vary depending on the speed and quality of your internet
connection.
If the sound quality is not satisfactory, you may listen via the phone: dial
1-866-869-6667 and enter your PIN when prompted. Otherwise, please
send us a chat or e-mail [email protected] immediately so we can
address the problem.
If you dialed in and have any difficulties during the call, press *0 for assistance.
Viewing Quality
To maximize your screen, press the F11 key on your keyboard. To exit full screen,
press the F11 key again.
FOR LIVE EVENT ONLY
Continuing Education Credits
In order for us to process your continuing education credit, you must confirm your
participation in this webinar by completing and submitting the Attendance
Affirmation/Evaluation after the webinar.
A link to the Attendance Affirmation/Evaluation will be in the thank you email
that you will receive immediately following the program.
For additional information about CLE credit processing call us at 1-800-926-7926
ext. 35.
FOR LIVE EVENT ONLY
Program Materials
If you have not printed the conference materials for this program, please
complete the following steps:
• Click on the ^ symbol next to “Conference Materials” in the middle of the left-
hand column on your screen.
• Click on the tab labeled “Handouts” that appears, and there you will see a
PDF of the slides for today's program.
• Double click on the PDF and a separate page will open.
• Print the slides by clicking on the printer icon.
FOR LIVE EVENT ONLY
“LIENS” AND THE LAW IN
PERSONAL INJURY PRACTICE ISSUES IN LITIGATION & SETTLEMENT
Franklin P. Solomon, Esquire Brett Newman
SOLOMON LAW FIRM, LLC LIEN RESOLUTION GROUP
Cherry Hill, NJ [email protected]
MEDICARE
6
Medicare Secondary Payer Act
42 U.S.C. § 1395y(b)(2) - (8)
Effective 12-5-1980
Date significant for exposure/ingestion claims
Substantially modified by the Prescription Drug and Medicare Improvement Act of 2003
Now includes Section 111of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA)
Reporting requirements for Responsible Reporting Entities (“RREs”)
7
MSP Liability
Repayment required
A primary plan, and an entity that receives payment from a primary plan, shall reimburse the appropriate Trust Fund for any payment made by the Secretary under this subchapter with respect to an item or service if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service.
42 USC § 1395y(b)(2)(B)(ii)
8
MSP Liability
Action by United States
The United States may bring an action against any entities required or responsible to make payment with respect to the item or service under a primary plan.
Includes insurer, self-insurer, TPA, employer sponsor of a group health plan, large group health plan, or otherwise
The United States may collect double damages against any such entity and may recover from any entity that has received payment from a primary plan or from the proceeds of a primary plan’s payment to any entity.
42 USC § 1395y(b)(2)(B)(iii)
9
MSP Liability
Private cause of action
There is established a private cause of action for
damages (in an amount double the amount
otherwise provided) in the case of a primary plan
which fails to provide for primary payment (or
appropriate reimbursement).
42 USC § 1395y(b)(3)(A)
10
Claim Reduction
MSP claims are automatically reduced by a
proportionate share of attorney fees and litigation
costs.
Provide documentation with Final Settlement Detail.
Once Settlement Detail is submitted, Medicare will issue
its initial determination and demand.
42 CFR § 411.37
11
Recent Case Law
Bradley v. Sebelius,
621 F.3d 1330 (11th Cir. 2010)
Hadden v. United States,
661 F.3d 298 (6th Cir. 2012)
Taransky v. Secty, U.S. Dept. of Health & Human Svcs.,
760 F.3d 307 (3d Cir. 2014)
12
MEDICARE SET-ASIDES
Considering Medicare’s Interest
Workers Compensation
Third-Party Liability
ANPRM 6047 Withdrawn 10-8-2014
13
MEDICARE SUBSTITUTE PLANS
14
MEDICARE SUBSTITUTE PLANS
(Medicare Advantage)
Medicare Advantage (formerly Medicare+Choice)
is privately issued insurance subsidized by the
government, offered in lieu of “traditional”
Medicare.
MA plans typically offer additional benefits, such as
expanded medical expense and prescription drug
coverage.
MA plans are specifically governed by Part C of
the Medicare statute
15
MAO as Secondary Payer
Where payment would be secondary under the Medicare Secondary Payer Act, a Medicare Advantage organization may charge, in accordance with the charges allowed under a law, plan, or policy described in such section—
(A) the insurance carrier, employer, or other entity which under such law, plan, or policy is to pay for the provision of such services, or
(B) such individual to the extent that the individual has been paid under such law, plan, or policy for such services.
42 USC § 1395w-22(a)(4)
16
Care Choices HMO v. Engstrom,
330 F.3d 786 (6th Cir. 2003)
Part C statute does not create a private cause of
action to enforce reimbursement claims.
Part C statute does not confer any affirmative right
to reimbursement; any reimbursement claim must be
based on contract provision.
See also Nott v. Aetna, 303 F.Supp.2d 565 (EDPA 2004)
Comment: To the extent MA plan contract may require
reimbursement, it is limited by the Part C Secondary
Payer provision.
17
Parra v. Pacificare of Arizona, Inc.,
715 F.3d 1146 (9th Cir. 2013)
Reiterates holdings of Engstrom and Nott.
Neither statutory reference to MSPA nor 42 CFR
§422.108(f), granting MAOs “the same rights to
recover … that the Secretary exercises,” create
any substantive right to a private cause of action.
Medicare Act does not authorize creation of a
common law of subrogation for plan claims.
18
In Re Avandia,
685 F.3d 353 (3d Cir. 2012)
Cert. denied, 133 S.Ct. 1800, sub nom
GlaxoSmithKline, LLC v. Humana Medical Plans, Inc.
(2013).
Allows MAOs to access “private cause of action”
provision under MSPA, 42 U.S.C. § 1395y(b)(3)(A).
By its terms, private cause of action is exercisable
only against a “primary plan” that has failed to
make payment.
But see Collins v. Wellcare, 2014 WL 7239426 (E.D. La.)
19
Employee Retirement Income Security Act of 1974
ERISA
20
ERISA Liens?
THERE IS NO SUCH THING AS AN “ERISA LIEN”
• ERISA is silent on liens and creates no
reimbursement rights for employee benefits plans
• Almost every health plan issued as an employee
benefit is subject to ERISA – but some are not.
21
ERISA Exclusions
ERISA specifically excludes from coverage:
any employee benefit plan if--
(1) such plan is a governmental plan ....
(2) such plan is a church plan ....
(3) such plan is maintained solely for the purpose of complying with applicable workmen's compensation laws or unemployment compensation or disability insurance laws;
(4) such plan is maintained outside of the United States primarily for the benefit of persons substantially all of whom are nonresident aliens; or
(5) such plan is an excess benefit plan and is unfunded.
29 USC Sec. 1003(b)
22
“Governmental Plan”
Federal government (e.g., FEHBA, Tri-Care)
State & municipal government
Railroad Retirement Act
Indian tribal government
where substantially all work is in essential governmental
functions, not in commercial activities
29 USC Sec. 1002 (32)
23
“Church Plan”
“Church plan” is a plan maintained by an organization to provide employee benefits if such organization is controlled by or associated with a church.
“Employee of a church” includes an employee of an organization which is exempt from tax under section 501 of the IRC and which is controlled by or associated with a church.
29 USC Sec. 1002 (33)
May include hospitals, nursing homes, schools, colleges
24
Express Preemption: ERISA § 514
FMC Corp. v. Holliday, 498 U.S. 52 (1990)
Insured plans indirectly regulated by state law regulating the plans’ insurers
Self-funded plans exempt from state insurance regulation; not altered by state law
What’s a self-funded plan?
Look at each plan component
Stop-loss insurance?
25
Complete Preemption: ERISA § 502
Civil enforcement A civil action may be brought by:
502(a)(1)(B): a participant or beneficiary to recover benefits due under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify rights to future benefits under the terms of the plan;
502(a)(3): by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan
26
PLAN SUBROGATION &
REIMBURSEMENT RIGHTS
27
The Insured Plan
Most states have adopted anti-subrogation rules or doctrines precluding reimbursement
Extent of prohibitions varies state to state
MT constitutional protection
NJ prohibited as a function of collateral source statute
NY statute prohibits claims by insurers
PA presumes settlement is full recovery
Many states allow for contracting out of anti-subro doctrines
A few states have not adopted made-whole or other anti-subrogation law
28
The Self-Funded Plan
Form 5500 and Schedule A
Plan Document v. SPD
Cigna v. Amara, 563 U.S. ___, 131 S.Ct. 1866 (2011)
Subrogation v. Reimbursement
Interpreting the contract clause
Plan year and date of injury
Conditional language
Abrogating the made-whole doctrine
6th, 9th & 11th Circuits require explicit language
29
Actions Under ERISA 502(a)(3)
Federal jurisdiction is exclusive
Allows only “appropriate equitable relief” to
enforce plan terms
US Airways v. McCutchen, 133 S.Ct. 1537 (2013)
Unjust enrichment not a defense to plan contract term
“Background equitable rules” apply if not expressly
contradicted by contract term
Made-whole doctrine
Common-fund doctrine
30
Requesting Plan Documents
Request must be to Plan Administrator/Sponsor
Statutory responsibility to provide within 30 days
$110/day civil penalty available for non-compliance
29 U.S.C. § 1024(b)(4); 29 CFR § 2575.502c-3
31
What to request?
Plan Document (written instrument pursuant to 29 U.S.C. § 1102) in effect on date of injury;
Any document amending, supplementing, or otherwise modifying the Plan Document;
Summary Plan Description and employee benefits booklet in effect at the time of injury
All documents issued subsequently during any year in which benefits were paid
SPD Wrap Documents
Bargaining Agreement, Trust Agreement, Contract etc. under which Health Plan is established
Trust Agreement or other document establishing funding for the Plan
Annual Return/Report (IRS/DOL Form 5500), including all attached Financial Schedules
Administrative Services Agreement with any Third-Party Administrator for the Plan
An affidavit from the Plan Administrator attesting to self-funded status of the Plan
Complete statement of benefits paid to or on behalf of claimant/beneficiary
Specific plan component(s) paying benefits (e.g., health, dental, vision, AD&D, disability, etc.)
“Stop-loss” or excess/re-insurance coverage (insurer, policy numbers and attachment points)
32
SPD as Plan Document?
Named fiduciary/ies with authority to control and manage operation and administration of the plan
Procedure for establishing and carrying out a funding policy and method
Procedure for allocation of responsibilities for the operation and administration of the plan
Procedure for amending the plan, and for identifying persons who have authority to amend
Basis on which payments are made to and from the plan
29 USC § 1102 - ERISA § 402
33
Issues
Can SPD function as a § 402 Plan Document?
Can a Plan Document delegate authority to claims
administrator or SPD?
Do later amendments affect a plan’s subrogation/
reimbursement rights?
34
Third-Party Recovery Clause
subrogation right
reimbursement right
first-priority claim
first-dollar recovery
lien
constructive trust
identified fund/amount
abrogate made-whole
abrogate common fund
conditional language
35
Medicaid
Federal Employees Health Benefits Act (FEHBA)
Federal Medical Care Recovery Act (FMCRA)
(Military Personnel, Veterans, dependents/survivors)
OTHER HEALTH PLANS
36
Negotiating Liens and Claims for Reimbursement with Private Health Insurers
Attorney Andrew D. Myers
Law Offices of
Andrew D. Myers
89 Main St., North Andover, MA
4 Birch St., Derry, NH
No One Gets Paid Until Health Plan Gets Paid
Health Plan First
First Dollar Recovery
38
Some States prohibit Subrogation
• By state statute, some states prohibit insurance companies from placing subrogation clauses into health insurance policies.
Look to statute and case law
• Example: Massachusetts statute and case law held to enforce full recovery to health care plan, rejecting payment of attorney fees or costs.
Pierce v. Christmas Tree Shops, Inc. , 706 N.E.2d 633 (1999)
State Law
39
ISSUE:
Whether Health Care Plan, a lienholder under the medical lien statute [MGL c. 111, § 70a-70b] may be ordered to contribute to the attorney fees and costs incurred by the plaintiff in pursuing a tortfeasor.
FACTS:
Donna Pierce was injured on the premises of the Christmas Tree Shops store. The HPHC plan paid medical expenses of $10,165. Pierce brought suit in Superior Court. Settled before trial. Pierce brought motion in court to determine her obligations to HPHC seeking a compromise to the lien amount and an order requiring the plan to share attorney fees and costs.
HELD:
The statute does not require the lienholder to pay any portion of the plaintiff’s fees and costs.
Pierce v. Christmas Tree Shops
40
1. INTAKE INTERVIEW
All health insurance cards
[Medicare-Medicaid-private-other?]
Summary Plan Description
If no SPD:
Signed authorization for copy
Alternative: client obtains
Copy of coverage selections page
all other insurance
Auto Insurance
Umbrella insurance?
Homeowners?
Practice Strategies
41
2. EXHAUST ALL OTHER
MEDICAL INS. BENEFITS
Car Insurance:
No-Fault Benefits [“PIP”]
Med-Pay Benefits
Premises Liability:
Med pay
Get med pay info ASAP – often
early submission deadlines
Use these to “pay down” Health
Ins Lien
Practice Strategies
42
3. OBTAINING THE LIEN
• Letter of representation and request
• Briefly describe type of injury & date of loss
• HIPAA compliant authorization
Practice Strategies
43
1. 4. PARSING THE LIEN
2. After receipt:
3. Mail/email otherwise provide copy to client
4. Read lien itemization with client
5. Review line by line in person or at least on telephone
6. Is each item on lien solely related to injuries caused
by accident or other medical issues.
7. Send query/challenge to Health Ins.
PRACTICE STRATEGIES
44
5. NEGOTIATING LIEN
Contest unrelated items : Insist unrelated
items deleted
Challenge questionable items, multiple
reasons for visits
Dispute excessive costs [3,000 for x-ray?]
Speak to decision makers
Use cool calm professional approach –
belligerence never helps
Account for comparative fault – likelihood
of success at trial
Tell “war stories” about losses. (Only time
in career to discuss cases lost)
PRACTICE STRATEGIES
45
6. PRELITIGATION AGREEMENT
• Based on uncertainty of trial
• Attorney fee
• Costs
• Experts required
• Delay
• Signed writing acknowledging
agreement by Health Plan
PRACTICE STRATEGIES
46
FIRST OFFER
Duty to communicate with client
Show lienholder actual 3D party analysis
STATUS OF NEGOTIATION
Notify lienholder with incremental offer increases
NEGOTIATE FINAL LIEN RESOLUTION BEFORE THIRD PARTY SETTLEMENT
After client signs release – no leverage against lienholder
Before settlement everything is contingent: leverage rests with client and attorney over whether or not they should accept onerous demands of lienholder
RESOLVE LIEN BEFORE SETTLEMENT
47
48
Right of subrogation
Right of reimbursement
Enforcement of statutory lien
“Letter of Protection”
Other contractual right
What is It
49
“By signing a letter of protection the lawyer is taking a position that is
potentially in conflict with the client’s stated interest.”
Another Look at Letters of Protection, Minnesota Lawyer, Aug 5. 2002.
For thorough treatment of “ethical and legal pitfalls when asked to assist
clients in dealing with their difficult economic and medical issues in
personal injury cases” see:
A Florida Bar Board of Governors, Opinion 02-4, April 2, 2004.
Massachusetts case Gordon Chiropractic v. Pena, Salem District Court
Docket No. 9536-CV-0076
Letters of Protection
50
Follow “Practice Strategies” in previous materials.
Notify health insurer of key events including trial ,
pretrial, mediation or other ADR. Invite to participate.
Alternative Dispute Resolution.
Interpleader of Health Ins. or Motion but only if case is
clear.
NEGOTIATION POINTS
51
Notify client of existence of language in
health insurance contracts giving right of
reimbursement if they are injured by a
defendant and if they recover money
from that defendant.
Make sure client understands up front –
early in case. Bad surprises blamed on
the attorney.
Paint insurer or plan as entity wearing
“black hat”. Attorney is only explaining
client‘s obligation to insurer.
Point out refusal to satisfy valid lien
endangers client’s future health benefits
and risks litigation by lienholder
CLIENT INVOLVEMENT
52
Keep client informed as to possible outcomes. Encourage realistic
expectations. If lien is adequately sizeable to endanger most or all of
settlement/judgment, client should know. May effect incentive to
pursue case. Lienholder should be notified.
Provide literature regarding legal obligation underlying liens / rights of
recovery. Provides third party authority for counterintuitive idea they
have to pay an insurance company back.
Here’s mine, feel free to print and use: [next page]
CLIENT INVOLVEMENT
53
LIENS ON PERSONAL INJURY CASES Like locks on a gate, liens prevent final settlement of personal injury cases until they are addressed.
http://www.attorney-myers.com/2013/01/liens-on-personal-injury-cases/
CLIENT INVOLVEMENT
54