Many lawyers are still unaware of the upcoming enforcement of new Medicare reporting rules, let alone versed on how to prepare clients.

And some insurers, fearful of running afoul of the rules, are engaging in practices that have delayed getting awards to plaintiffs.

New Medicare Secondary Payer reporting rules require attorneys, insurers and even plaintiffs to report any personal injury settlement, judgment or other award to the Centers for Medicare and Medicaid Services (CMS) in cases where Medicare has rendered payment or could render future payments for care based on the injury alleged in the case. Failure to do so could result not only in CMS slapping a lien on the award for Medicare reimbursement, but also fines of up to $1,000 per day.

Due to the confusion over the rules, the government has postponed enforcement twice. Now, the reporting requirements are set to go into effect Jan. 1, 2011.

But the reporting rules apply to one-time payments made on or after Oct. 1, 2010 and ongoing-care settlements and awards made on or after Jan. 1, 2010, so lawyers who have yet to prepare for them are already behind the ball.

All of this has personal injury and elder law attorneys, insurers and clients on edge.

“The reason everyone is so scared is because as soon as you touch the money, you are on the hook,” said Christine Alsop, a partner at the Webster Groves, Mo. elder law firm Oelbaum, Brown & Alsop, where she works with plaintiffs’ and defense attorneys as well as insurers on Medicare reporting requirement issues and set-aside trust creation.

“Many times insurance companies — because of their fear about the rules — have said ‘we’re going to put Medicare’s name on the draft of the check,’” said Mark C. Joye of the Joye Law Firm, a personal injury firm in North Charleston, S.C.

Such a move creates problems that can delay the settlement process or stop it altogether, because negotiating such a payment is difficult if not impossible for the client or CMS. “That will scuttle the settlement,” Joye said.

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http://wislawjournal.com/article.cfm/2010/07/26/Medicare-setaside-rules-continue-to-baffle-Many-lawyers-arent-aware-of-new-rules