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Baltimore U.S. Attorney Nabs Law Firm: Obtains $250,000 Settlement with Law Firm that Failed to Reimburse Medicare

Thursday, March 28, 2019

By Marty Cassavoy, VP MSP Compliance

Standard operating procedure when settling a personal injury claim: parties should first determine if a plaintiff is a Medicare beneficiary, and once confirmed  should comply with the Medicare Secondary Payer statute by ensuring that Medicare is repaid for any injury-related payments that it made.  What happens when standard operating procedure breaks down?  A recent $250,000 settlement in Maryland demonstrates that law firms can find themselves in the cross-hairs when these procedures are not followed.

The U.S. Attorney’s Office for the State of Maryland outlined the basic facts that led to the settlement.  The law firm Meyers, Rodbell & Rosenbaum, P.A. prosecuted a medical malpractice claim that ultimately led to a $1.15M settlement in December 2015.  The settlement resulted in a conditional payment demand from Medicare.  According to the press release, the firm “refused to pay the debt in full, even when the demand became administratively final.”  In addition to reimbursing Medicare $250,000, the settlement requires the firm to designate one employee to monitor Medicare conditional payment claims and ensure that any demands are paid in a timely fashion.  Medicare claims must be reviewed no less than every six months with the firm’s designated Medicare Secondary Payer monitor.

No company wants to be made an example of compliance failures.  In June 2018, the U.S. Attorney for the Eastern District of Pennsylvania issued a very similar press release with the same settlement terms.  In that case, however, the law firm targeted by the U.S. Attorney settled for $28,000.  Other recent case law – Aetna v. Guerrera out of Connecticut and Humana v. Paris Blank out of Virginia – have shown that plaintiff-side law firms are more frequently targeted by Medicare Advantage plans, as well.

Many law firms, insurance companies and third-party administrators have invested in policies and procedures to guard against this sort of enforcement.  Nevertheless, it would be a mistake to whistle past the graveyard and assume that because a Maryland law firm is the target today, that a law firm or insurer in your backyard will not be the target tomorrow. 

The bottom line is that the easiest way to inoculate against future enforcement is to prepare proactively and systematically to address Medicare compliance issues at the time of a settlement.  Confirm Medicare entitlement prior to settlement.  Once identified, investigate whether Medicare claims that it has made any payments.  When Medicare alleges conditional payments, all parties share a responsibility to ensure that those payments are properly addressed within the terms of the settlement, and  ultimately  Medicare is repaid.

ExamWorks Clinical Solutions’ team of conditional payment experts closely monitors conditional payment enforcement activities like this one.  We work closely with our client partners to develop compliance solutions to prevent these types of exposures from materializing.  If you need help with conditional payments please contact our Director of Conditional Payment Research, Lou Porrazzo, at 678-256-5085 or louis.porrazzo@examworks-cs.com.

About Marty Cassavoy

Marty Cassavoy is the Vice President of MSP Compliance at ExamWorks Clinical Solutions.  Marty and his team develop solutions to challenges in all areas of Medicare Secondary Payer compliance and across all insurance types.  An attorney licensed to practice law in Massachusetts, Marty works from the ExamWorks’ Woburn, Massachusetts office and can be reached at 781-517-8085 or marty.cassavoy@examworks-cs.com