Happy St. Patrick's Day!
Congratulations!
The Finley Firm is proud to announce that J. Benjamin Finley was selected as a 2009 SuperLawyer. Christopher R. Reeves and Kindu A. Walker were selected as 2009 Rising SuperLawyers. We are extremely proud of your accomplishments!
Donations
The Finley Firm has donated $250.00 to the Firefighters Burn Fund, Inc. The Firefighters Burn Fund is a non-profit organization that organizes children summer camps for burn victims at Grady and Eggleston Hospitals. The children go to camp for a week with a staff of volunteers on hand. If you would like to make a donation, please contact 1-877-643-0122, or your local fire station.
The Finley Firm has made a contribution to the National Association of Women Judges for their Annual Midyear conference in Atlanta, Georgia in April. We hope the event is a great success!
Upcoming Events
April 9, 2009 CNA Insurance In-House Workers' Compensation Seminar.
April 16, 2009 The Finley Firm will attend the ACC Convention at the Gwinnett Center.
April 19-23, 2009 The Finley Firm will attend the RIMS Annual Conference in Orlando, FL.
Seminars
February 26, 2009 We missed you! The Finely Firm provided a seminar for 80 insurance adjusters on Thursday, February 26th at Maggiano's Perimeter. There were 19 different companies that attended. Stephanie Hillman, Hillman Consulting, and the attorneys at The Finley Firm created an entertaining and entergetic presentation for all. The seminar included topics on Ethics, Claims Handling, Updates in Liability and WC Updates. Each class is CEU approved! The support materials are available. Please email Vanessa Williams at vwilliams@thefinleyfirm.com if you would like a copy emailed or mailed to you. If you are interested in us coming to you to provide a seminar, please contact Vanessa. We hope to see you at our next seminar!
The Finley Firm provides FREE in-house semianrs all ALL of our clients. Here is a list of our approved CEU Courses:
Ethics
1 hour Ethics
Speakers: Kindu A. Walker and MaryBeth Gibson
1 hour Ethics: Are You Smarter than a Fifth Grader?
Speakers: C. Gregory Ragsdale, Mary D. Lewis and Michael E. Memberg
Liability
1 hour Medicare, Medicaid & SCHIP Extension Act of 2007
Speaker: Christopher R. Reeves
1 hour Updates in Liability Claims
Speakers: Christopher R. Reeves and Kindu A. Walker
1 hour Environmental Coverage Disputes
Speaker: Christopher R. Reeves
Workers’ Compensation
4 hours The Importance & Criteria of State Board Forms & Panel of Physicians
-Posted Panel of Physicians-How the Panel can Make the Difference
-Light Duty Release
-State Board Forms-When are the Deadlines & Filing Requirements
Speakers: J. Benjamin Finley C. Gregory Ragsdale and M. Kathryn Rogers
1 hour Georgia WC Updates
Speakers: J. Benjamin Finley, C. Gregory Ragsdale and M. Kathryn Rogers
Other
1 hour Investigating a Claim
Speakers: J. Benjamin Finley, Christopher R. Reeves and M. Kathryn Rogers
1 hour Family Feud: Claims Handling & Exposure
Speakers: C. Gregory Ragsdale, Mary D. Lewis and Michael E. Memberg
Don't see the course you need? Just contact us and we will be happy to tailor a course to your needs.
Please contact Vanessa Williams at 404.320.9979 or vwilliams@thefinleyfirm.com to schedule a seminar for your staff.
Acceptance Doctrine
The Acceptance Doctrine Reaffirmed in Georgia
Georgia follows a traditional common-law rule known as the “acceptance doctrine” when determining contractor liability for the defective design of work performed on behalf of an owner. The acceptance doctrine provides that where a contractor who does not hold itself out as an expert in the design of work such as that involved in the controversy, performs its work without negligence, and the work is approved and accepted by the owner or the one who contracted for the work on the owner's behalf, the contractor is not liable for injuries resulting from the defective design of the work.
The immunity is not absolute. Should the contractor be deemed negligent, he will be subject to liability for inherently or intrinsically dangerous work, for nuisances per se, and for work so negligently defective as to be imminently dangerous to third persons.
In a recent decision, the Georgia Supreme Court reaffirmed the acceptance doctrine in Georgia. The Court granted certiorari last year in the case of Bragg v. Oxford Constr Co., 289 Ga. App. 638 (2008), to determine whether the acceptance doctrine should remain viable in Georgia. On February 9, 2009, the Court announced a 4-3 decision affirming the lower court ruling and reaffirming the validity of the acceptance doctrine in Georgia. Bragg v. Oxford, 2009 WL 290093. The decision came with a dissenting opinion claiming the acceptance doctrine to be outdated and no longer appropriate.
With the split decision and strong dissent in this case, there is potential for future challenges to the acceptance doctrine to arise in the lower courts in Georgia. We will continue to monitor future developments.
If you have any questions about the acceptance doctrine, please contact Kindu Walker at 404-320-9979 or kwalker@thefinleyfirm.com.
SITF Reimbursement
SITF Reimbursement Schedule Update
The Subsequent Injury Trust Fund in Georgia (SITF) has a newly implemented reimbursement program. The SITF will be reimbursing settlements up to $75,000 as the SITF backlog permits, which may be about 7-8 months at this point. Settlements of $75,000 to $150,000 will be reimbursed by payment of the first $75,000 as the backlog permits, with the remaining balance paid on the 12-month anniversary of the first payment. Settlements of $150,000 to $225,000 will be paid out at $75,000 per year until the balance in paid off. Finally, any settlements above $225,000 will be paid in three yearly equal installments.
If you have any questions about the new reimbursement program, please contact C. Gregory Ragsdale at 404-320-9979 or gragsdale@thefinleyfirm.com.
Medicare
Workers’ Compensation & Liability Adjusters Beware: Section 111 of the MMSEA Imposes Significant New Penalties for Failing to Protect Medicare’s Interests
On December 29, 2007, President Bush signed into law the Medicare, Medicaid, and SCHIP Extension Act (MMSEA). Section 111 of the MMSEA significantly amends the “notice and reporting” requirements under the Medicare Secondary Payer Statute (MSP) relating to workers’ compensation, liability (including self-insurance) and no-fault cases. This new law becomes effective July 1, 2009, for all primary payers except for group health plans for which the effective date is January 1, 2009. The penalty for non-compliance is steep: $1000 per day, per claim.
All workers’ compensation and liability adjusters need to understand the requirements of Section 111 since it will have a significant impact on claims handling and settlement. Those representing employers, self insureds, and insurance carriers need to pay especially close attention to not only the requirements of Section 111, but the proposed policy procedures currently being issued by the Centers for Medicare and Medicaid Services (CMS) as the new law places significant obligations on these entities.
Now is the time to assure you are: (1) aware of Section 111 and CMS’s proposed policy guidelines, (2) developing the necessary internal procedures for proper Section 111 compliance, and (3) determining what, if any, role counsel is expected to play in the process.
In order to fully appreciate the significance and impact of Section 111, it is first necessary to understand how the new law fits into the larger picture of Medicare compliance under the MSP and, specifically, the obligation to protect Medicare’s interests for conditional payments.
Medicare Conditional Payments & Primary Payer Compliance
The MSP, codified at 42 U.S.C. § 1395y, was enacted in 1980 to control the increasing costs of the Medicare program. The statutory provisions under 42 U.S.C. § 1395y, combined with supporting provisions under the Code of Federal Regulations, including 42 C.F.R. § 411.20, et. seq., and 42 C.F.R. § 411.40, et. seq., are often collectively referred to as the MSP.
The primary aim of the MSP is to assure that primary payers, and not Medicare, assume responsibility for medical treatment for accident related injuries. The MSP is designed to prevent a responsible third party from “shifting” the burden of an individual’s medical care to the Medicare program. Under the MSP, a “primary plan” includes:
an automobile or liability insurance policy or plan (including a self-insured plan) or no fault insurance.… An entity that engages in a business, trade or profession shall be deemed to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance, or otherwise) in whole or in part.
42 U.S.C. § 1395y(2)(A).
The general rule under the MSP is that Medicare will not make payment for medical services if “payment has been made or can reasonably be expected to be made under a workmen’s compensation law or plan of the United States or a state or under an automobile or liability policy or plan (including self-insurance) or under no fault insurance.” 42 U.S.C. § 1395y(b)(2)(A)(ii). However, Medicare may make “conditional payments” if a primary plan “has not made or cannot reasonably be expected to make payment…promptly.” 42 U.S.C. § 1395y(b)(2)(B)(i). Any such payment made by Medicare “shall be conditioned on reimbursement to the appropriate Trust Fund.” Id.
Primary payers are obligated to reimburse Medicare for conditional payments. “Conditional payment” is defined as “a Medicare payment for services for which another payer is responsible, made either on the bases set forth in subparts C through H of this part, or because the intermediary or carrier did not know that the other coverage existed.” 42 C.F.R. § 411.21. Medicare conditional payments can arise in a number of ways as part of claims handling. For example, conditional payments can arise in situations where the primary payer denies the claim and refuses to pay for medical treatment. Alternatively, a primary payer may accept the claim or agree to pay for medical treatment, but the treating provider’s billing department mistakenly bills Medicare for the treatment. In these circumstances, if the claimant is a Medicare beneficiary it is likely that Medicare will step in and pay for the claimant’s Medical treatment.
Pursuant to 42 U.S.C. § 1395y(b)(2)(B)(ii) primary payers, and an entity that receives payment from a primary plan, are obligated to reimburse Medicare for conditional payments when it is demonstrated that a primary plan “has or had a responsibility” to make payment. A primary plan’s “responsibility” may be “demonstrated” by a “judgment” or “a payment conditioned upon a recipient’s compromise, waiver and release.” 42 U.S.C. § 1395y(b)(2)(B)(ii). A “settlement” or “contractual obligation” is further indicia of “responsibility” under the MSP. See 42 C.F.R. § 411.22 (b)(3). It is important to note that this obligation applies “whether or not there is a determination or admission of liability.” 42 U.S.C. § 1395y(b)(2)(B)(ii). Thus, even denied claims are included under the statute.
Under the MSP, Medicare is afforded broad enforcement rights on several levels. For example, Medicare has a direct right against all primary payers responsible for making payment, see id., and any entity that received a primary payment, including a beneficiary, provider, supplier, physician, attorney, state agency, or private insurer, see 42 C.F.R. § 411.24(g). Medicare also has a subrogation right, as well as rights of joinder and intervention. See 42 C.F.R. § 411.26.
In terms of repaying conditional payments, if CMS does not need to take legal action, the amount of recoverable conditional payments is the lesser of either the Medicare primary payment, or the amount of the full primary payment that the primary payer is obligated to pay. See 42 C.F.R. § 411.24(c)(i)(ii). If it is necessary for CMS to take legal action, Medicare may recover twice the amount of the Medicare primary payment. See 42 U.S.C. § 1395y (b)(2)(B)(ii); 42 C.F.R. § 411.24(c)(2). Medicare’s claim may be reduced by procurement costs. See 42 C.F.R. § 411.37.
In addition to establishing Medicare’s reimbursement right, the MSP requires primary payers to place Medicare on “notice” regarding certain cases involving Medicare beneficiaries. 42 C.F.R. § 411.25(a) is the current section that deals with “notice.” The present version of this section, which became effective in March 2008, provides that primary payers must place Medicare on notice “if it is demonstrated to a primary payer that CMS made a Medicare primary payment for services for which the primary payer had made or should have made.” The prior version of this CFR, effective from 1990 through March 2008, provided that “if a primary payer learns that CMS has made a Medicare primary payment for services for which the primary payer has made or should have made primary payment, it must give notice to that effect to the Medicare intermediary or carrier that paid the claim.” Section 111 will make significant changes to the notice aspect of the MSP.
As outlined above, primary payers have had long standing “reimbursement” and notice obligations under the MSP. Notwithstanding such requirements, primary payer compliance with the MSP, and the government’s enforcement of its rights, have been inconsistent at best. Thus, Section 111 was enacted to strengthen primary payer compliance under the MSP by implementing more stringent notice and reporting requirements as discussed below.
Section 111 of the MMSEA: New Notice AND Reporting Obligations
Section 111 of the MMSEA, codified at 42 U.S.C. §1395y(b)(8), will significantly impact the current obligations of all primary payers to protect Medicare’s interests for conditional payments and create new practical challenges on several levels for practitioners. In general, Section 111 places an affirmative obligation on “applicable plans”to (a) determine if a claimant is entitled to Medicare and (b) notify Medicare of said entitlement as specifically required.
CMS is currently in the process of releasing its proposed procedures to implement Section 111 referred to by the agency as its Mandatory Insurer Reporting (MIR) guidelines. CMS has established a dedicated website containing its proposed MIR guidelines and other information regarding Section 111. The website address is http://www.cms.hhs.gov/MandatoryInsRep.
As part of its MIR guidelines, CMS has released numerous documents since August outlining the agency’s various proposals to implement Section 111. These documents can be obtained on CMS’s dedicated website referenced in the above paragraph. In addition to these written proposals, CMS held national several Open Forum teleconference calls to discuss its MIR proposals and to address related questions. Transcripts of these conference can be obtained at the CMS website along with a schedule of upcoming conferences.
Under the MIR, the entity that is required to place Medicare on notice and submit the required information is referred to by CMS as the “Responsible Reporting Entity” (RRE). The first step is to determine if one is considered a RRE. In this regard, it is imperative that all parties examine CMS’s definition of what constitutes a RRE to determine potential RRE status. CMS’s definition of what constitutes a RRE is contained in CMS’s Supporting Statement at pages 13 to 15.
To a large degree, the MIR process remains a “work in progress,” and there are currently many questions concerning the proposed requirements and how the MIR will actually work. A detailed examination of the various proposed requirements under the MIR, and the issues raised therein, is beyond the scope of this article. Nonetheless, now is the time for primary payers and practitioners to prepare for the significant requirements under Section 111 and the MIR.
Against this backdrop, a general overview of Section 111 and CMS’s proposed MIR guidelines is provided as follows:
What is Required?
Under 42 U.S.C. § 1395y(b)(8)(A), an “applicable plan shall determine whether a claimant (including an individual whose claim is unresolved) is entitled to benefits under the program under this title on any basis.” 42 U.S.C. § 1395y(b)(8)(A). If the claimant is entitled to Medicare, then Medicare must be placed on notice and provided specific information as required by CMS.
It is important to note that neither Section 111 itself nor CMS’s proposed MIR guidelines provide a procedure to be followed by the RRE to “determine” Medicare entitlement status. Likewise, neither provides an implied consent provision allowing a RRE to seek this information without an authorization, and neither requires a claimant to execute an authorization allowing a RRE to request this information from the Social Security Office. At the time this article was written, CMS indicated that the agency was in the process of consulting with its counsel to determine if a “query access” system could be devised to assist RREs in determining if the claimant is Medicare entitled.
Until and unless a formal system is implemented, CMS has advised that “RREs must implement a procedure in their claims resolution process to determine whether an injured party is a Medicare beneficiary. RREs must submit either the Social Security Number (SSN) or Medicare Health Insurance Claim Number (HICN) for the injured party on all Input Claim File detail records.” CMS’s Interim Record Layout at 5. RREs and practitioners will also need to consider possible options in situations where they are unable to procure an authorization from the claimant or otherwise encounter difficulty “determining” a claimant’s Medicare entitlement status.
What Must Be Reported?
Under 42 U.S.C. § 1395y(b)(8)(B), the information to be reported includes the “identity of the claimant” and “such other information as the Secretary shall specify in order to enable the Secretary to make an appropriate determination concerning coordination of benefits, including any applicable recovery claim.” 42 U.S.C. § 1395y(b)(8)(B).
CMS via its Supporting Statement announced various “mandatory,” “optional,” and “situational” data fields, with corresponding instructions, that RREs would need to report under Section 111. These data fields are referenced at pages 18 to 20 of the Supporting Statement. Examples of some of the mandatory fields include, but are not limited to, the claimant’s name, date of birth and address, social security number or health identification number, insurance information including type of insurance and policy and claim numbers, policy holder information, date of injury, and claim resolution information.
In addition, CMS’s recently released Interim Record Layout document further outlines the information to be reported and provides the proposed “record layout” that will be utilized with respect to the reporting requirements under Section 111. The proposed record layout can be viewed in the Interim Record Layout at pages 8 to 60. All RREs and interested parties should carefully review the required data field sections of the Supporting Statement and Interim Record Layout to determine the necessary information to be submitted and CMS’s related instructions.
How Will Notice Be Provided?
Under 42 U.S.C. § 1395y(b)(8)(A)(ii), the required information is to be submitted “in a form and manner (including frequency) specified by the Secretary.” 42 U.S.C. § 1395y(b)(8)(A)(ii).
As part of its MIR guidelines, CMS has announced that notice under Section 111 will be submitted via electronic submission. CMS refers to the information required to be submitted as “production files.”
CMS has outlined a specific registration process for RREs to register with the Coordination of Benefits Contractor (COBC) via CMS’s “COB Secure Website” (COBSW), which is currently under construction. It is important to note that the RRE itself must complete the registration process; Agents are not permitted to complete the registration for the RRE. The registration process for non-group health (non-GHP) RREs will be from May 1, 2009, through June 30, 2009. CMS’s Registration Process instructions at 2 (section entitled Registration Timelines).
Once the registration process is completed, there will be a “testing period” commencing July 1, 2009, to September 30, 2009 for all non-GHP RREs in which the data submission process will be tested. CMS’s Implementation Timeline document at 2. Thereafter, non-GHP RREs are scheduled to “submit their first Section 111 production files upon a predetermined schedule with the COBC” during the period October 1, 2009, to December 30, 2009. Id. All non-GHP RREs are scheduled to be submitting production files by January 1, 2010. See id.
The above outline of the registration, testing, submission processes, and timelines is an extremely generalized snapshot of the overall process. It is imperative that the requirements and processes outlined in CMS’s Supporting Statement, Implementation Timeline, and Registration Process be examined closely for a complete understanding of the specific MIR requirements. In addition, RREs and interested parties should participate in CMS’s Open Forum teleconference calls during which the agency discusses its MIR proposals and answers questions from the public. Information regarding the scheduling of the Open Forum sessions is published by CMS on its dedicated MIR website listed above.
When Must Notice Be Provided?
42 U.S.C. § 1395y(b)(8)(C) provides that the required information shall be submitted “within a time specified by the Secretary after the claim is resolved through settlement, judgment, award, or other payment (regardless of whether or not there is a determination or admission of liability).” 42 U.S.C. § 1395y(b)(8)(R).
Currently, CMS has established two basic triggering events for reporting: (1) claim resolution (or partial resolution) and (2) situations where the RRE accepts “ongoing responsibility for medical payments.” CMS has announced very detailed and specific requirements regarding the actual application of the above referenced triggering events which are outlined on page 5 of the agency’s Interim Record Layout. A detailed examination of these requirements and the parameters related thereto is beyond of the scope of this article. Nonetheless, these requirements should be carefully reviewed by all RREs and interested parties to obtain a complete understanding of CMS’s exact requirements and approach in this area.
In addition, CMS has announced a “special reporting extension” (not a reporting exception) to the reporting requirements in relation to what the agency terms as “ongoing claims resolved (partially resolved) prior to July 1, 2009.” The details of CMS’s special reporting extension are outlined on page 7 of its Interim Record Layout that should be carefully reviewed by all RREs and interested parties.
What Are the Penalties?
Under 42 U.S.C. § 1395y(b)(8)(E), the penalty for non-compliance is $1000 per day, per claim, which is in addition to any other penalties available at law. As of this writing CMS had not issued any proposals regarding this aspect of Section 111.
Conclusion
For lawyers who practice in the workers’ compensation and liability arena, Medicare compliance, at least with respect to reimbursement of conditional payments, is nothing new. However, the new notice and reporting obligations of Section 111 of the MMSEA will have a significant impact on your clients.
Keeping abreast of CMS’s ongoing announcements of the agency’s MIR guidelines is imperative for all legal practitioners. Even if clients do not look to you for expertise and guidance in understanding the requirements of Section 111 or for developing procedures to assist with compliance, a complete understanding of Section 111 and CMS’s proposed MIR guidelines will be required to assure that all necessary measures are taken to protect Medicare’s interests as part of the claims handling and settlement process.
If you have any questions about this article, please contact Christopher R. Reeves at 404-320-9979 or creeves@thefinleyfirm.com.