An increase in Medicare reporting requirements is creating delays in personal-injury litigation. The delays caused by the new Medicare reporting process are in turn putting the squeeze on lawsuit plaintiffs. Lawsuit plaintiffs who have suffered personal injuries must wait longer than ever before to receive satisfaction of their claims and lawsuits. Similarly, their attorneys must also wait longer for payment, creating a business cash-flow problem.
Background
In 2010, Congress amended the reporting requirements for Medicare recipients. The new “mandatory secondary payer reporting” requirements took effect on January 1, 2011. Officially, the vehicle for this change is known as the Medicare/Medicaid and State Children’s Health Insurance Program (SCHIP) Extension Act of 2007 (MMSEA).
Under the MMSEA regulations, all self-insured employers and insurers are required to report all eligible liability, no-fault and workers compensation claims to the Centers for Medicare and Medicaid Services (CMS).The new law was enacted to limit Medicare payments to injured individuals which should in fact be paid by self-insured employers and insurers rather than Medicare.
MMSEA provides:
- What must be reported: the identity of a Medicare beneficiary whose illness, injury, incident, or accident was at issue as well as such other information specified by the Secretary to enable an appropriate determination concerning coordination of benefits, including any applicable recovery claim.
- When/how reporting must be done:
- Information shall be submitted within a time specified by the Secretary after the claim is resolved through a settlement, judgment, award, or other payment (regardless of whether or not there is a determination or admission of liability).
Because the law specifies that information must be provided after a claim is resolved, and because it imposes penalties for failure to comply with the requirements, the law in effect makes plaintiffs and plaintiffs’ attorneys wait longer to receive their payments.
Effect of MMSEA Medicare Reporting Requirements
Practically speaking, the MMSEA reporting requirements have become a financial nightmare for plaintiffs and plaintiffs’ attorneys. This added delay in the litigation process affects liability, no-fault, and workers’ compensation claims, even if the claims completely valid, and even when immediate medical treatment and funds are needed.
The delays caused by the reporting process to the Centers for Medicare and Medicaid Services, fear of penalty for non-compliances, and sometimes for the processing of satisfaction of Medicare liens, have caused insurance carriers to delay distributing settlement checks. In effect, the new Medicare reporting requirements have lengthened the time it takes personal injury victims to receive settlement or payment for their claims. In an industry famous for delay, the new law has made insurance claim payment delays and lawsuit settlement delays even longer, putting more and more pressure on already strapped personal-injury lawsuit plaintiffs and plaintiffs’ attorneys.
Pre-Settlement Funding and Post-Settlement Funding Needed Now More Than Ever
As a result of the delay in the litigation process and distribution of settlement checks, lawsuit plaintiffs and plaintiffs’ attorneys are experiencing an increasing need for both pre-settlement funding and post-settlement funding. Often, patients need surgery, medical treatment, or money for living and family expenses when they are unable to work or have exhausted their savings in paying expenses as a result of their injuries. Plaintiffs’ attorneys need to pay their expenses. Because of the nature of their practices, often they cannot weather cash-flow delays easily.
In these cases, pre-settlement funding and post-settlement funding can make the difference. Increasingly, plaintiffs and plaintiffs’ attorneys are requesting pre-settlement funding and post-settlement funding, and the need for these requests can be traced directly to the new Medicare reporting requirements.
