Have you ever received a letter from a patient’s attorney demanding the release of your lien at the expiration of the Medicare timely filing period? Did the letter reference a Medicare Learning Network (“MLN”) article?
If so, what did you do? Did you immediately file to Medicare and/or release your lien?
This blog is intended to address an MLN article that has created confusion among patients and providers.
On September 19, 2017, CMS published an article titled Billing in Medicare Secondary Payer (MSP) Liability Insurance Situations. The MLN Matters Number is SE17018. The article sets forth several frequently asked questions with corresponding answers. One specific question is, “How long can a claim/lien be maintained against the liability insurer/the beneficiary’s liability insurance settlement? (Can I direct bill/maintain my lien once Medicare’s timely filing period has expired?).” The article provides the following answer: “providers are required to drop their claims/liens and terminate all billing efforts to collect from a liability insurer or a beneficiary once the Medicare timely filing period expires, unless the liability insurance claim was paid or settled prior to the expiration of the Medicare timely filing period.”
We believe this “answer” contradicts the clear language of established Medicare law and undermines the intent of the Medicare Secondary Payer Act.
It is important to note at the outset that agency materials, such as MLN articles, do not have the force of law. If litigation were to arise over this issue, a court would not give any deference to the MLN article. Instead, courts would focus on Medicare statutes, regulations, and case law.
Federal Medicare statutes require providers to first seek payment of its charges from all primary payers, such as an automobile insurer, prior to considering filing a conditional payment claim to Medicare. See 42 U.S.C. § 1395y(b)(2). If it is determined that a liability insurer will not pay within 120 days, providers may choose between filing a claim to Medicare or seeking payment from its hospital lien.
This choice is highlighted in the most recent version of CMS’s “Medicare Secondary Payer (MSP) Manual,” which states a provider may either “bill Medicare for payment and withdraw all claims/liens against the liability insurer/beneficiary’s liability insurance settlement . . . or maintain all claims/liens against the liability insurance/beneficiary’s liability insurance settlement.” Section 40.2(F) states, “[w]here permitted by State law, a provider, physician, or other supplier may file a lien for full charges against a beneficiary’s liability settlement.” The MSP manual does not require providers to terminate liens after the expiration of the Medicare timely filing period.
The most recent court decision on this issue comes from Wisconsin in Laska v. Gen. Cas. Co. of Wis., 347 Wis.2d 356 (Wis. App., 2013). The court addressed a 2000 U.S. Department of Health and Human Services Memorandum, which stated: “providers of services are required to drop their liens and terminate all billing efforts to collect from a liability insurer or a beneficiary once the Medicare [billing] period expires, unless the liability claim was paid or settled prior to the expiration of the Medicare [billing] period.” This is the exact position taken in MLN SE17018. However, the court in Laska concluded the 2000 Memorandum is not a “reasonable interpretation of federal law” and that the beneficiary failed to “point to any other federal authority that would bar the Hospital’s lien after the Medicare billing period expired.” Id. at 263-264. Furthermore, the court reasoned that the 2000 Memorandum “undermines the obvious cost-shifting purpose of the Secondary Payer Statute by imposing a cut-off date for provider liens that appears to lack any connection to whether a source other than Medicare can be reasonably expected to pay.” Id. at 262. As a result, liability insurers would have a “perverse incentive . . . to delay settlement until the Medicare billing period expires.” Id.
In light of the above, we believe Medicare law allows providers to maintain their liens against liability settlements, without regard to the Medicare timely filing period. There is simply no legal authority to support CMS’s billing policy requiring providers to withdraw liens after the expiration of Medicare timely filing period.