Haro v. Sebelius
Changes in Medicare Reimbursement Procedures
A recent decision by the United States District Court for the District of Arizona has changed the reimbursement procedures of Medicare. In the past, once its reimbursement rights under the MSP statute were triggered, CMS would demand repayment of its reimbursement claim within sixty days of claim resolution. The court’s decision in Haro v. Sebelius, CV 09-134 TUC DCB, (D. AZ.)(May 5, 2011) states that CMS cannot demand immediate payment from Medicare beneficiaries while the reimbursement amount is pending appeal or a waiver request.
Additionally, prior to the Haro decision, CMS required that the plaintiff attorneys hold funds in escrow without distributing proceeds to the Medicare beneficiary prior to CMS being reimbursed in full for any conditional payments made. In Haro, the Court ruled that plaintiffs attorneys can distribute undisputed settlement proceeds to their clients as well as taking their fees, case costs and expenses (amounts for procurement).
Because of these rulings, CMS has to change the language in their demand letters. While this is under review, CMS has temporarily suspended issuance of demand letters. They are still working the cases and demand letters will be mailed as soon as the review is complete. We will update our clients as soon as Medicare begins issuing the new final demand letters.
The Medicare Secondary Payer Recovery Contractor (MSPRC)’s website has been updated to state:
News and Updates
ALERT UPDATE: Review of the Rights and Responsibilities letter and the Demand Letters is complete
Review of the Rights and Responsibilities letter (“RAR”) and the Demand Letters for liability insurance (including self-insurance), no-fault insurance and workers’ compensation is complete. Issuance of the RAR resumed on June 10, 2011.
This is great news for our clients waiting for final demands from Medicare.