Specialty Services

In response to this dual problem, we established our Pooled Medicare Consideration Account (PMCA).  It can remove the impediment to settling cases because it is economical, which is an important consideration with modest liability cases.  In terms of protecting future Medicare entitlement, the PMCA can also be used as reasonable way to avoid shifting future medical expenses to Medicare when there are not a lot of settlement proceeds to go around after fees and litigation costs.

Using the Pooled Trust concept as a model, the PMCA is able to take advantage of our in-house economies of scale.  Accounts are pooled for consolidated management, which reduces cost, but each individual PMCA account is segregated in the pool as a separate account.  In addition, drafting costs are eliminated entirely because the PMCA documents are ready and waiting to be used just as they are with a Pooled Trust.  The process for opening an account is simple, and all a claimant needs to do is sign an individual account agreement and fund it with whatever amount will be used to pay for future accident related medical care.

The individual agreement incorporates a master agreement, and it includes several simple exhibits that ask for basic claimant information so we are able to open an account. The exhibits also ask for instructions on how the funds should be used.  As long as the instructions clearly identify how the funds should be used, they can be formal or informal depending on the larger context of the case.  For example, if all a claimant will need is some specific procedure in the future, the instructions could be as simple as a letter from the claimant’s attorney or doctor identifying the procedure.

Whatever the instructions for future medical care may include, using the PMCA means that the funds will be protected and only spent for their intended use. While using the PMCA does not provide the same guarantee as a CMS approved MSA, it is a reasonable method to settle liability cases and to document that the claimant took affirmative action to avoid shifting future medical expenses to Medicare.  Until such time as CMS might finally take responsibility for providing clear and reliable guidance, the PMCA is a practical and economic solution for claimants, plaintiff attorneys, and defendants who want to meet their obligations regarding Medicare.

These cases are typically brought as part of Project Safe Childhood, which is a national initiative that the Department describes as, “…a unified and comprehensive strategy to combat child exploitation. Initiated in May, 2006, Project Safe Childhood combines law enforcement efforts, community action, and public awareness. The goal of Project Safe Childhood is to reduce the incidence of sexual exploitation of children”.  See http://www.justice.gov/psc/about-project-safe-childhood for more information. According to the Department’s website, the annual prosecution rate has increased each year since the project’s launch date in 2006.

The Center is proud of its work in developing the Compensation Fund for the Department.  It can be used both internationally and domestically, and it was designed to meet two broad objectives.  First, it has been designed to avoid additional complications at the conclusion of a successful prosecution by being straight-forward and easy to use. Second, and most importantly, it has been designed as a cost-effective method for protecting the interests of these young beneficiaries.  While each child’s fund can be established with detailed and specific instructions for how the funds should be used, the documents contain very broad default provisions in the event the Center receives no instructions.  These default provisions ensure that the Center has discretion to use the funds in any way necessary to meet the child’s material, emotional, and psychological needs no matter what those needs may be.

Establishing an individual Disbursement Account can also provide a secure, consistent, and reliable method for making settlement payments to foreign Plaintiffs. While the primary intent is to make non-taxable payment to Non-resident Aliens for personal injury, medical malpractice and wrongful death settlements, we recognize that Defendants also need to make settlement payments on occasion to Resident Aliens. Therefore, the larger purpose and intent of the Disbursement Account is to make non-taxable settlement payments to both Non-resident Aliens and Resident Aliens alike. However, this larger purpose and intent does not preclude us from making taxable payments to either Non-resident Aliens or Resident Aliens in addition to non-taxable payments. In those cases were taxable payments may need to be made to Non-resident or Resident Aliens, we take care of filing any necessary and appropriate tax returns.

We make all disbursements according to instructions provided by the Plaintiff in the disbursement schedule that is attached to each individual Disbursement Account agreement. Each Plaintiff is also asked to include residual beneficiary information so that we can follow the Plaintiff’s wishes if funds remain at the time of death.

Background: similar to the law of many other States, the Act controls the rights and responsibilities of Medicaid recipients and their legal representatives when resources become available from a liable third party after Medicaid has provided medical benefits to an injured party.  In other words, the Act establishes Medicaid’s lien rights along with the Medicaid recipient’s duty to satisfy any liens.

Prior to the change that became effective on July 1, 2013, it was perfectly appropriate for law firms to hold any disputed funds in their trust accounts while the amount owed to Medicaid was resolved.  Now, however, the Act requires the full amount claimed by Medicaid to be paid in full to the Agency for Health Care Administration (the “Agency”), or alternatively, to be placed in an interest-bearing trust account for the benefit of the Agency.

Obviously, most law firms who dispute a Medicaid claim do not want to pay the full amount to the Agency and then hope for a refund. Therefore, we established a compliance tool so law firms can meet this new statutory requirement without paying the full amount to the Agency.  The 409(17) Fund allows law firms to place the disputed funds in an interest-bearing account for the benefit of the Agency while contesting the amount owed. While the Act does not prohibit attorneys from opening and maintaining an interest-bearing account on their own, many law firms view it as a logical choice to shift this additional liability to an independent third party.

How it Works: the 409(17) Fund works very simply and efficiently.  To open an account, all we need is an Individual Application Form signed by the Medicaid recipient or legal representative along with a check in the amount claimed by Medicaid.  The Individual Application Form is a short and simple form that comes with an Instruction Sheet with easy to follow directions.

When we receive the signed Individual Application Form and check, one of our designated representatives will sign the Form, deposit the check, and return a copy of the fully signed Form to the law firm.  In addition, we also provide a Deposit Receipt and a Certificate of Account so the law firm can demonstrate compliance with the statutory requirement to place the funds in an interest-bearing account.

The funds remain in the account, and we will only disburse upon one of the following events: 1) the entry of an order determining the Agency’s rights; 2) a written and signed directive from the individual Medicaid recipient or their legal representative to disburse all of the funds to the Agency; or, 3) a written and signed agreement between the individual Medicaid recipient or their legal representative and the Agency that settles the claim for an identifiable amount.

Although the Fund holds the full claim for the benefit of the Agency as specified by statute, the Fund also addresses the needs of the Medicaid recipient as described below.

• The Medicaid recipient’s ongoing Medicaid eligibility is protected because the funds are specifically not available while the claim is being disputed.

• The Medicaid recipient can direct where any remaining funds are disbursed after the claim is resolved, including to a special needs trust.

The Medicaid recipient can avoid probate in the event of death prior to the claim being resolved by naming residual beneficiaries in the Application Form.