On April 18, 2018, New Jersey Director & Chief Judge of Compensation Russell Wojtenko, Jr. issued a memorandum to all NJ Judges of Compensation, Bar Members, and Court Staff entitled “Medicare Conditional Payments.” In addition to providing background of the requirements of the Medicare Secondary Payer (MSP) Act, the memorandum provides guidance on how parties must report via Section 111 MMSEA Reporting and handle reimbursement of conditional payments to Medicare. 

Judge Wojtenko states that before a NJ Judge of Compensation can approve a Section 20 settlement involving a Medicare beneficiary, the parties first must report the required information to CMS as set forth by Section 111 of the MMSEA of 2007. The parties shall also begin the process of obtaining conditional payment information. 

Additionally, Judge Wojtenko advises that if conditional payments have been made, it is best left to the parties to decide how they will resolve remaining Medicare issues. “The parties are strongly encouraged to reach specific agreements delineating how their remaining Medicare issues will be resolved, thus protecting the injured Medicare beneficiaries, employers, and workers’ compensation insurers, as well as honoring the rights and interests of Medicare.” 

Commentary: Franco Signor has reached out to the New Jersey Department of Labor on this memorandum. As this memorandum speaks to Section 20 settlements, which in New Jersey involve denied workers’ compensation claims wherein the claimant agrees to a full and final settlement in exchange for a lump sum, the Section 111 requirements do not completely jive with practical requirements on the MSP. 

Regarding Section 111 reporting, in fully denied workers’ compensation claims, Ongoing Responsibility for Medical (“ORM”) is marked as “No”, as such, the settlement cannot be reported until a Total Payment Obligation to Claimant (TPOC) is reported at the time of settlement. Thus, to require Section 111 Reporting prior to settlement is not feasible. Judge Wojtenko has responded to our inquiry and understands this viewpoint. He stated that “either a conditional payment search or a manual report through the portal (Medicare Secondary Payer Recovery Portal) would satisfy the Division’s requirements for claims settling with a Section 20 Settlement.” 

Regarding conditional payment issues, this memorandum provides excellent advice that parties should have specific agreements in place delineating how Medicare will be reimbursed. As we have seen in a great deal of case law, where parties are not on the same page as to conditional payment obligations, settlements can be voided for failure to reach a meeting of the minds. Further, where primary plans rely upon the claimant or claimant’s attorney to reimburse conditional payments, and CMS is not reimbursed, CMS may pursue recovery for those payments from the primary plan. As such, clear delineation of obligations for conditional payments makes a great deal of sense. 

For questions on the NJ memorandum, please contact Heather Sanderson at Heather.Sanderson@francosignor.com.


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