Resolving Medicare Conditional Payment Claims in Mass Tort Actions

In Mass Tort cases, Medicare may agree to implement an alternative resolution process for conditional payment claims. Instead of parties resolving claims through the traditional process with Medicare’s recovery contractor, Medicare will set a dollar amount or implement a formula to calculate an amount to resolve conditional payment claims made for all plaintiffs in the Mass Tort case who are Medicare beneficiaries. The alternative resolution process streamlines the repayment of Medicare’s conditional payments. It can also serve to simplify the reimbursement process for primary payers. In addition, as a term of the alternative resolution process Medicare will agree that the claims do not have to be reported under Section 111. Individual Medicare beneficiaries may be able to “opt-out” of the alternative resolution process. In such cases, the Medicare beneficiaries who opt-out must follow the regular process to resolve Medicare conditional payment claims. For example, in Mattila v. Centers for Medicare & Medicaid, 2020 U.S. Dist. LEXIS 16892, the plaintiffs were also plaintiffs in a Mass Tort that was settled. The Mattila plaintiffs chose to opt-out of the alternative resolution process established with Medicare as part of the settlement agreement. Following settlement, Medicare issued demands to the Mattila plaintiffs for reimbursement of conditional payments made by Medicare on their behalf. The Mattila plaintiffs filed suit against CMS requesting relief for the following: 1. The conditional payment claim amount asserted by Medicare was “grossly in excess” of the anticipated settlement, when the settlement being paid to the plaintiff was $300,186.91, and conditional payment claims asserted totaled $367,828.72;

2. Conditional payment claims asserted were unrelated to injuries associated with the Mass Tort action; and

3. The plaintiffs paid the demand issued by CMS, but CMS continued to re-assert the claims.

CMS moved to dismiss the plaintiffs’ claims on the basis that the plaintiffs failed to exhaust their administrative remedies. The court granted the motion and dismissed the case without prejudice. The Mattila plaintiffs likely would have fared better by participating in Medicare’s alternative resolution process. Keep in mind, however, that alternative resolution processes do not resolve liens that may be asserted by any individual claimants’ Medicare Advantage or Prescription Drug Plan. Additionally, should individual claimants opt-out of the alternative resolution process, carriers should be sure that a final demand from Medicare is obtained and the proper administrative steps followed to resolve Medicare conditional payment claims. If you have any questions about the alternative resolution process, please let us know. Let us help you navigate Medicare conditional payment claim resolution.