ANNOUNCEMENTS
Latest announcements, industry news and InSight’s from Synergy Settlement Services.
March 24, 2020
Now, more than ever, proper settlement planning is critical for disabled clients. Protecting their recovery should be top of mind and a high priority given the turbulence in our global markets. There are always going to be ups and downs in the financial markets. The real estate market has crashed. The tech market has crashed. The oil markets have crashed. There will be ups and downs in everyone’s personal financial situation. You need a new car, roof or the AC goes out. Now we have a virus that is creating an economic and social shutdown of our way of life for the foreseeable future.
Our current financial crisis illustrates how critical it is for you to bring in a settlement planner to speak with your clients. Your clients do not have to plan for their settlement, but they do deserve to speak with someone that has the education, experience, and knowledge to show them the options. Education about ways to protect the recovery from rapid dissipation and insulation from the market are exceedingly important.
If you have a client that settles their case, they need to know the ramifications of their financial decisions. The two questions that always need to be addressed immediately before accepting any settlement are:
- Can I take any portion of my settlement in cash or will that impact my public benefits?
- Can I utilize a structured settlement for a portion of my settlement?
Those two questions have to be asked and answered on every case before anything is finalized. The answers to those questions will dictate the form of the settlement and set the stage for proper planning. Not asking those questions, could cause irreparable harm to the client.
As part of the planning process, it is important to meet with a qualified settlement planner to help your client create a visual picture of their future. They need to do some basic budgeting. Questions need to be asked like: How much do I NEED now and ongoing? What do I WANT now and ongoing? What public benefits are necessary for my future?
If a settlement planner can get a picture of the client’s needs and wants, solutions can be created to provide for as much of those as possible. By making sure critical questions get asked and simple budgeting is done, creating a rock-solid settlement plan becomes much easier. There are many benefits to crating a settlement plan which includes a structured settlement and public benefit preservation vehicles.
Structured Settlement Benefits
- Peace of mind (Guarantee and Fixed): The periodic payment schedule is outlined in the settlement documents and does not change with the market fluctuations.
- Creditor Protection: Future periodic payments are not subject to creditors.
- Lifetime Income: Annuities are one of the only financial services products that will pay you for the rest of your life (regardless of how long you live).
- Tax-Free Payments: All payments received from a traditional structured settlement are tax-free.
- Dollar-Cost Averaging Tool: A structure can create monthly, quarterly or annual income payable to you over a period certain. These funds can be used to invest in other asset classes over time to lower the risk of a single investment date.
Public Benefit Preservation Benefits
Income: Public Benefit programs from Social Security can continue to provide income for your lifetime.
Medical Coverage: Programs through Medicaid and Medicare can provide health insurance benefits at no or a lower cost vs private coverage.
Years upon years of settlement planning experience teaches us inevitably there are clients who need and would benefit from a structured settlement and/or trust to preserve benefits. All too frequently clients decide to take a cash settlement only to regret their decisions and want to go back on their public benefits they lost. At the same time, clients can structure too much of their settlement and need cash. It is critical to make sure that clients have the right allocation of their settlement to upfront cash, structured settlement, and trust. This blend, crafted at the time of settlement, is a critical foundation for their future. Proper settlement planning will impact how easily a disabled client transitions from litigation to life.
January 17, 2020
In Publix Super Markets, Inc. v. Figareau et. al., Case No. 8:19-cv-545, 2019 WL 6311160 (M.D. Fla. Nov. 25, 2019), the Court permitted an ERISA self-funded health plan’s equitable lien claim to attach to the plaintiff attorney. This case is further evidence that using Synergy Settlement’s Lien Resolution service can be essential to fully resolve asserted liens and ensure that you, your client and your firm are protected.
Publix provides a health benefit plan that is ERISA self-funded (“The Plan”). Figareau and Paul are the parents of a child who sustained a birth injury. The Plan paid $88,846.39 in related medical expenses. The case settled and the “funds are housed in a designated structured settlement account established by [Paul and Figareau].”
Publix initiated an action against Figareau and Paul, as well as their attorney and the attorney’s firm (“Attorney Defendants”) seeking to obtain appropriate equitable relief to enforce the Plan’s reimbursement provisions. Specifically, Publix sought reimbursement of the settlement funds and equitable relief in the form of a constructive trust or equitable lien on the amounts held or controlled by the defendants as a result of the settlement of the underlying case.
Defendants argued numerous points including the fact that the attorney and law firm are not parties to the Plan and therefore the claims against them are not cognizable. The Court found that the claim against the Attorney Defendants are cognizable because they hold the settlement proceeds in trust or otherwise possess the funds. Specifically, a lien or constructive trust on funds in possession of the Attorney Defendants is imposed by the express terms of the Plan. The Court reiterated earlier decisions where it was stated that “the most important consideration is not the identity of the defendant, but rather that the settlement proceeds are still intact, and thus constitute an identifiable res that can be restored to its rightful recipient.”
Another point argued by the defendants is that this action “creates an impermissible conflict of interest between [the Attorney Defendants], the minor child, and Publix,” and that “[i]t would be unethical . . . for [the Attorney Defendants] to represent Publix in a contingency fee contract and protect the interest of Publix over the minor.” The Court found that “the funds held in trust by the Attorney Defendants are, as alleged, subject to a lien by agreement under the Plan. Their possession of the funds does not create a conflict of interest.”
It’s always best for lien resolution to not reach this level. Synergy is your partner to bring these matters to conclusion, limiting your liability and giving you peace of mind.
By B. Josh Pettingill
Last week, the Centers for Medicare and Medicaid Services (CMS) released a “CMS Manual System” “One-Time Notification” regarding Liability Medicare Set Asides and enforcement of the Medicare Secondary Payer statute (MSP). Starting October 1, 2017, Medicare and their contractors will reject medical claims submitted post-resolution of a liability settlement on the basis those claims “should be paid from a Liability Medicare Set Aside (LMSA)”. The commentary cites the basis for rejection of the claims as enforcement of the MSP statute[1]. It is also important to note that the alert mentions that “Liability and No-Fault MSP claims that do not have a MSA will continue to be processed under current MSP claims processing instructions”.
Here is a link to the announcement:
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R1787OTN.pdf
At the heart of the announcement is the following text which Synergy has continually indicated was CMS’s position regarding liability settlements and enforcement of the MSP:
“Pursuant to 42 U.S.C. §1395y(b)(2) and §1862(b)(2)(A)(ii) of the Social Security Act, Medicare is precluded from making payment when payment “has been made or can reasonably be expected to be made under a workers’ compensation plan, an automobile or liability insurance policy or plan (including a self-insured plan), or under no-fault insurance.” Medicare does not make claims payment for future medical expenses associated with a settlement, judgment, award, or other payment because payment “has been made” for such items or services through use of LMSA or NFMSA funds. However, Liability and No-Fault MSP claims that do not have a MSA will continue to be processed under current MSP claims processing instructions.”
Enforcement of the MSP as it pertains to future Medicare covered services began back in 2001 when CMS announced in a policy memorandum the requirement to set aside a portion of workers’ compensation settlements allocated to future Medicare covered expenses[2]. Accordingly, the MSP enforcement only took place in the context of workers’ compensation matters. The practical implication of this memorandum was the advent of the Medicare set aside. In 2007, Section 111 Reporting Requirements (part of the Medicare, Medicaid, and SCHIP Extension Act (MMSEA)) added a mechanism for CMS to track Medicare beneficiaries who receive liability, workers’ compensation or no-fault liability settlements, judgements or awards[3]. This Section 111 Reporting Requirement gave CMS further ammunition to track compensable ICD codes related to the liability case.
There has been little to no enforcement of MSP in the context of liability settlements up until now. In most instances, Medicare has continued to process medical claims as if there never were a recovery made for future medical care. On very rare occasions, they would deny medial claims submitted by providers. This latest commentary indicates an imminent change in the near future in regards to enforcement of the MSP. CMS is subtly sending the message that LMSAs are going to be a necessary mechanism in order to avoid denial of medical claims post-resolution. They are also suggesting there will be certain cases where LMSAs will not be necessary; although, this latest alert did not specify these circumstances.
Take Away for Plaintiff Attorneys
This alert is latest evidence to support that CMS is continuing its pursuit in establishing formal guidelines for liability MSAs. CMS started the regulatory process for liability set asides with the Advanced Notice of Proposed Rulemaking (ANPRM) proposal in May 2012. However in October 2014, CMS withdrew its Notice of Proposed Rulemaking (NPRM) for protecting Medicare’s interests with respect to future medicals. Until CMS provides formal guidance on these issues to plaintiff attorneys, Synergy will continue to advocate for techniques that lower the MSA or completely eliminate the MSA obligation. We will also continue to monitor CMS developments on this issue and keep our clients informed to ensure MSP compliance for the Plaintiff community.
Synergy will be releasing a White Paper on the Current Status of Liability MSAs and Best Practices in the very near future. In the interim, here is a link to Synergy’s CEO, Jason Lazarus’s White Paper, Debunking the MSA Mystery. This paper provides a thorough overview on LMSAs and MSP compliance.
https://partnerwithsynergy.com/wp-content/uploads/2016/03/Debunking_The_MSA_Mystery_white_paper.pdf
[1] The MSP is a series of statutory provisions enacted in 1981 as part of the Omnibus Reconciliation Act with the goal of reducing federal health care costs. The MSP provides that if a primary payer exists, Medicare only pays for medical treatment relating to an injury to the extent that the primary payer does not pay. CFR Title 42, Part 411, Subpart B, Section 411.20 (2) provides “[s]ection 1862(b)(2)(A)(ii) of the Act precludes Medicare payments for services to the extent that payment has been made or can reasonably be expected to be made promptly under any of the following” (i) Workers’ compensation; (ii) Liability insurance; (iii) No-fault insurance.
[2] Parashar B. Patel, Medicare Secondary Payer Statute: Medicare Set-Aside Arrangements, Centers for Medicare and Medicaid Services Memorandum, July 23, 2001
[3] https://www.cms.gov/medicare/coordination-of-benefits-and-recovery/mandatory-insurer-reporting-for-non-group-health-plans/overview.html
In Allena Burge Smiley v. Hartford Life and Accident Insurance Company, et. al, No. 15-10056 (11th Cir. 2015), the Eleventh Circuit reiterated what Synergy regularly advises clients to do regarding the statutory document request pursuant to 29 U.S.C. 1024(b)(4) – send it to the right place! The first step in properly defending against an asserted subrogation or reimbursement claim from an ERISA plan is making a request for documents pursuant to 29 U.S.C. 1024(b)(4). On July 17, 2015, the Eleventh Circuit in Allena Burge Smiley v. Hartford Life and Accident Insurance Company, et. al, No. 15-10056 (11th Cir. 2015), reaffirms the rule that unless this statutory request is sent to the “plan administrator” no penalties will be assessed.
A proper 29 U.S.C. 1024(b)(4) request is of the utmost importance for two (2) reasons: to obtain the necessary documents to evaluate the strength of the ERISA plan’s recovery rights, and to exert pressure by means of 29 U.S.C. § 1132 (c) (1) (B) penalties.
29 U.S.C. § 1024(b)(4) – The administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated summary, plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated.
29 U.S.C. § 1132(c) – Any administrator who fails or refuses to comply with a request for any information which such administrator is required by this subchapter to furnish … within 30 days after such request may … be personally liable … in the amount of up to $100 a day.
29 C.F.R. § 2575.502c-1 – The civil monetary penalty established by … ERISA is hereby increased from $100 a day to $110 a day.
As the Eleventh Circuit found in Smiley, despite arguments that the third-party administrator was a de facto plan administrator, the plan language of the ERISA statute places these responsibilities on the plan administrator alone, not its agents. One bright spot for the plaintiff’s bar is the Court’s affirmation that in order to obtain penalties (where the request was sent to the correct party) there is no need for the plaintiff to demonstrate “prejudice, bad faith, [or] harm” in order to obtain penalties, Byars v. Coca-Cola Co., 517 F. 3d 1256 (11th Cir. 2008); Daughtrey v. Honeywell, Inc. 3 F.3d 1488, 1494 (11th Cir. 1993).
The Supreme Court issued its ruling in John Joerg, Jr., etc. et. al. v. State Farm Mutual Insurance Company on October 15, 2015. The opinion is exceedingly important as it reinforces application of the collateral sources rule to bar evidence of future Medicare benefits which may be potentially received by the plaintiff. So there can be no set of against future medical expenses for payments Medicare may make in the future.
This important decision cited to Synergy CEO, Jason Lazarus’ article on the Medicare Secondary Payer Act. The court stated:
“Failure to comply with the reporting requirement results in a $1,000 per day, per claim civil penalty. See id.; see also generally Jason D. Lazarus, Medicare Myths: What Every Trial Lawyer Should Know About the MSP and Liability Medicare Set Asides, Fla. B.J., Nov. 2010, at 46.”
Mr. Lazarus has been recognized as a national thought leader in the area of Medicare Secondary Payer Compliance with numerous published articles on the subject and countless CLE presentations. Synergy is on the forefront of Medicare Secondary Payer Compliance. It offers unique Medicare Set Aside and Conditional Payment Resolution services. It even offers combined services to address set asides and conditional payments with its Medicare 360 service. Synergy’s Medicare refund services recently obtained a refund from Medicare in the amount of $159,061.85 as the result of a waiver request. Many of Synergy’s competitors say that isn’t possible but in 2015 alone, Synergy has recovered $1,799,641.62 back from Medicare and since the service was started in 2014 it has recovered in excess of $2.4 million back from Medicare for deserving clients.
Turn to Synergy when you need a superior Medicare Secondary Payer Compliance partner.
Synergy Settlement Services’ experts will resolve the most difficult and complex Medicare Secondary Payer compliance challenges facing your firm. Medicare 360° is the complete solution for Medicare conditional payment resolution and Medicare Set Aside (MSA) allocations. Medicare 360° combines the most powerful services from our lien resolution group and our MSP compliance group into one solution.
Medicare 360° Benefits:
• Complete Medicare Secondary Payer Compliance to close cases rapidly and compliantly for Medicare beneficiaries
• Very reasonable cost
• A comprehensive Medicare compliance solution that handles the entire process from reporting potential for third party liability to the Medicare contractor, resolving Medicare’s repayment demands (including the first two (2) levels of administrative appeals) and protection of the plaintiff’s future Medicare eligibility
• Plaintiff centric services (Synergy doesn’t do defense work)
• Complete outsourcing solution for the trial attorney and their firm
• Peace of mind knowing that it is being handled by a team of highly credentialed MSP experts
Medicare 360° Services:
Phase 1: Medicare Conditional Payment Services – Medicare Conditional Payment Audit and Verification
This service includes the audit and verification of conditional payments for cases that originate from a personal injury case. The process includes reporting to the Centers for Medicare and Medicaid Services (CMS), the audit and dispute of Conditional Payment Summaries, the request for Final Demand, and includes 1st and 2nd level administrative appeals.
Phase 2: MSP Compliance Service – Medicare Set Aside Allocation without CMS Submission
This service includes preparation of a Medicare Set Aside allocation report that complies with CMS requirements for submission. Normal turnaround time for set aside allocations is 10 days from the due date we receive all necessary documents. Pricing includes coverage for one revision to the report.
Medicare 360° Pricing*: $2,500
*A 50% deposit is required at time of intake. If report needs to be expedited, a $500 rush fee will apply.
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