Subpractice Areas

Medicare Secondary Payer & Other Coordination of Benefits

Sonnenschein’s Health Care Group lawyers are considered leading authorities on coordination of benefits issues, including Medicare Secondary Payer (MSP) matters.  Sonnenschein lawyers have a sophisticated understanding, not only of the current MSP laws and regulations, but also of how the Centers for Medicare & Medicaid Services (CMS) and the Department of Justice (DOJ) have interpreted and enforced the laws and rules over time.

Through our vigilant monitoring of the legal landscape, our team is unmatched in identifying and analyzing emerging legal issues and trends affecting key stakeholders.  These issues include the potential application of the MSP laws to clinical trial sponsors; legal and practical implications of the new mandatory reporting requirements under Section 111 of the Medicare, Medicaid & State Children's Health Insurance Program Extension Act of 2007 (Section 111); and changes in the overall risk assessment for various entities, based on anticipated CMS enforcement and collection activities, as well as the implications of recent federal False Claims Act and other litigation.

In addition to daily advice to clients on Section 111 reporting matters (which is currently a foremost concern),  Sonnenschein distinguishes itself by offering the full range of MSP strategic and regulatory counseling and the handling of  government inquiries and investigations, such as CMS enforcement matters, debt collection actions and False Claims Act  defense. Our unparalleled focus and expertise in this area uniquely positions us to assist in identifying areas of potential exposure and proposing strategic solutions to address them.

Our MSP team provides practical advice and in-depth knowledge based on years of experience representing virtually every type of entity subject to the MSP laws.  Our clients include workers’ compensation, liability and health care insurers, third-party administrators, Medicare Advantage (MA) and Part D Prescription Drug Plans (PDPs), hospital and other providers (in their own right and as self-insurance plans), large retailers and other entities that are self-insured, employers and industry associations.

Scope of Capabilities

Core Services

We have extensive experience in six key areas:

• Practical, Cost Effective Compliance Guidance: We understand that in most organizations, compliance involves the coordination of many business units, which raises practical challenges.  We assist our clients by conducting surveys of current MSP policies and procedures, identifying potential weaknesses, and developing and implementing solutions.  We engage with in-house lawyers and business owners to develop MSP process improvement strategies that promote efficient and effective compliance.  In the course of such reviews, we provide a range of potential services, including MSP training, development of written policies and procedures, legal analysis of various potential operational approaches and assistance with drafting communications to business partners and others regarding new policies.  When significant legal issues are uncovered, we assist with the investigation and work with clients to craft appropriate corrective action.
• Legislative and Regulatory Counseling: For many years, members of our team have assisted trade associations and other clients in their interactions with Congress and CMS regarding anticipated changes in the law, regulations and agency guidance around MSP and other coordination of benefits matters. 
• Transactional Counseling: Sonnenschein assists clients in structuring business arrangements to be compliant with Medicare, Medicaid and other coordination of benefits laws, and provides appropriate protections should client business partners fail to comply.  Most recently, we have assisted numerous clients (both Responsible Reporting Entities and agents) to negotiate vendor agreements in connection with the new Section 111 mandatory reporting requirements to ensure that all parties’ respective obligations are delineated and that our clients’ interests are adequately protected.
• Response to Enforcement Activities: We assist in responding to government MSP enforcement activities, whether those involve an informal CMS warning letter or formal litigation.  Over the years, we have successfully litigated an Administrative Procedure Act challenge to CMS regulations and resolved several qui tam MSP False Claims Act investigations.  We have assisted clients with voluntary self-disclosures and negotiated numerous MSP recovery and other settlements.
• Data Reporting Advice: Our lawyers are intimately familiar with the CMS data reporting regime, having advised clients in connection with the initial mandatory and voluntary data exchanges in the group health plan context.  We are counseling a host of group health plan and non-group health plan clients regarding compliance with the new Section 111 mandatory reporting requirements.
• Debt Collection Guidance: MSP recovery efforts by CMS continue to create operational and other challenges for our clients.  We help clients understand and navigate this intricate process to effectively assert their rights and promote a fair resolution of alleged debt at the MSP recovery contractor or U.S. Department of Treasury/debt collector level.

Section 111 Mandatory Reporting Counseling

Congress amended the federal MSP statute in December 2007 to impose mandatory reporting obligations on certain entities, including group health plans and liability, no fault and workers’ compensation insurers.  A liability insurer is interpreted broadly in this context to include any self-insured entity and, accordingly, CMS has determined that the reporting obligations may apply to a broad range of entities (including, in certain instances, those who settle and pay within insurance deductible amounts or self-insured retention amounts).  Sonnenschein is actively advising many clients on a host of MSP reporting issues, including:

• Understanding their Section 111 reporting obligations, including identifying who is the "Responsible Reporting Entity" and addressing practical registration and reporting questions;
• Negotiating contracts with or on behalf of vendors performing reporting tasks;
• Analyzing the possible reach of the Section 111 reporting requirements to self-insured entities and the unique issues related to self-insurance pools, reinsurance, excess liability insurance, and mass tort situations;
• Advising on effective strategies for collecting required data not in their possession and taking advantage of safe harbor protection from penalties by following specified CMS procedures;
• Establishing effective compliance programs to minimize potential civil monetary penalty and other legal risks;
• Analyzing the benefits and shortcomings of using Medicare set aside agreements in the liability context; and
• Advising with regard to CMS debt collection activities that will likely flow out of the data collection process.

With regard to Section 111 reporting, Sonnenschein is advising clients on many cutting edge issues and is monitoring closely CMS guidance regarding topics as diverse as potential application of the MSP laws in the clinical trial context, potential reporting obligations associated with risk management write-offs by hospitals, potential extraterritorial reach of Section 111 to overseas carriers, and the "exposure exception" as interpreted by CMS in the mass tort context.  For more information regarding issues related to potential application of the MSP laws in the clinical trial context, see our Bureau of National Affairs publication report (October 2007) summarizing the foundational principles that apply in this context.  Click here to access the complete BNA Medical Research Law & Policy Report.

Additionally, Sonnenschein has discussed amendments to MSP laws and their impact in further detail in a supplemental e-Alert. Click here to access the e-Alert:

Amendments to Medicare Secondary Payer Laws Impose Substantial New Reporting Obligations and Potential Civil Monetary Penalties for Non-Compliance.

Sonnenschein has issued other client alerts regarding Section 111 reporting requirements.  Read the latest client alert, CMS Postpones Section 111 Reporting Requirements for Non-Group Health Plans.

Recently, Sonnenschein partners Janice Ziegler and Ramy Fayed presented an analysis of Section 111 Medicare Secondary Payer mandatory reporting requirements during a complimentary health law webinar.  Click to listen to this Webinar presentation recording (use passcode: medicarerpt360). The presentation includes:

An overview of Section 111 mandatory reporting with discussion of:

• Reporting Basics
• Applicable Penalties
• Enforcement Risks

A discussion of Hop Topics including:

• Challenges for risk managers of self-insured entities
• Contracting with reporting vendors and compliance strategies for "Responsible Reporting Entities"
• Data collection strategies
• Provider risk management write offs and clinical trial research policies for Providers
• The debate regarding Medicare set asides for Liability Insurers
• Evolving reporting requirements and challenges for Mass Tort Litigants

Sonnenschein’s unparalleled focus and expertise in this area uniquely positions us to assist in identifying areas of potential exposure and proposing strategic solutions to address them.  Click here to view the Medicare Secondary Payer (MSP) Coordination of Benefits and Other Services Overview.