The Social Security Administration (SSA), which acts as a gatekeeper for disability benefits for many people, has been reviewing both new special needs trusts (SNT) and old, long-settled SNT’s with a fine-tooth comb.  SSA looks for technicalities that they allege violate SSA rules, and use that as a basis to deny disability benefits, even to people who are already receiving benefits.

SSA’s rules regarding special needs trusts are very technical, and can be found in the Program Operations Manual System (POMS).  SSA has been applying these rules very harshly of late.  For example, with first-party SNT’s (often used to hold lawsuit proceeds), when the beneficiary dies, the SNT must be used to repay the State for the cost of Medicaid over the beneficiary’s lifetime.  Many trust agreements include provisions providing that, after Medicaid is repaid, if any trust funds remain, those funds can be used to pay for funeral expenses.  Those provisions have never caused problems in the past, but now SSA is reportedly claiming in some cases that those provisions violate Medicaid repayment rules, and the beneficiary therefore is disqualified from disability benefits.  There are numerous other examples of provisions that never caused problems in the past, but that SSA is now claiming disqualify the trust beneficiary from public assistance.

I suspect this is the result of political and financial pressure on SSA to rein in costs, which they’re doing by trying to pare back the number of Supplemental Security Income (SSI) beneficiaries.  The take-away for lawyers and people with disabilities is that SSA is reviewing trusts more closely than ever now, so it’s of paramount importance to get a well-drafted special needs trusts that complies with the POMS.

To learn more about special needs trusts or discuss your situation, feel free to call or email FriedmanLaw today.

If you are a Medicare beneficiary filing a lawsuit, or an attorney representing a Medicare beneficiary in a lawsuit, you should be aware of your obligations to Medicare.

By law Medicare is a secondary payer, meaning that if Medicare makes payments for which someone else is ultimately responsible (such as a tortfeasor, liability insurer or worker’s compensation insurer), Medicare will demand reimbursement.

In other words, if you suffer an injury and need care, Medicare may make payments for your care.  But if you later recover on that injury, whether it’s in a lawsuit settlement, judgment, or worker’s compensation award, Medicare may demand repayment of those conditional payments (so called because Medicare’s payments are conditioned on being repaid if someone else is ultimately responsible to pay for care).

If you don’t comply with legal requirements to repay Medicare, you may be charged interest, or sued by the government, or Medicare may refuse to pay for further care for you.  The penalties are stiff, so it’s important to comply.

When the lawsuit is first filed, you should inform Medicare’s Benefits Coordination and Recovery Center (BCRC).  You can do so by mail or fax, but the quickest way is by phone at 855-798-2627.  BCRC’s contact info is listed online.

Once BCRC initially processes your case, they will send you a Rights and Responsibilities letter.  At that point (or about three days after notifying BCRC by phone) you can call BCRC and request a Case ID Number.  With the Case ID Number in hand, you can log on to the Center for Medicare and Medicaid Services’ (CMS) online recovery portal, the Medicare Secondary Payer Recovery Portal (MSPRP), to manage the case going forward.

While the case is ongoing, you can use the MSPRP to request an interim Conditional Payment letter, which shows the current amount for which Medicare will demand repayment.  The amount in the interim letter may not be final, as Medicare may make more conditional payments while the case is ongoing.  Once the case settles (or a judgment is issued or worker’s compensation award made, or other resolution), you should notify Medicare via the MSPRP and request a final Conditional Payment letter showing the final payoff amount.  You should review the final Conditional Payment letter to make sure all of the payments are for care related to the injury on which the lawsuit was based.  The letter should contain instructions on appealing if you want to challenge the payoff amount, e.g., if not all the payments were for care related to the injury.

Beneficiaries of Medicare, Medicaid and other government benefits programs may have strict obligations when pursuing a legal claim.  At FriedmanLaw we advise beneficiaries of public assistance and their attorneys on how to comply with program requirements and maximize benefits.  For advice on your situation, call or email us today.