Understanding Medicare’s Three-Year Dates of Service Limitation
by P. Czuprynski
The Medicare Secondary Payer Act requires reimbursement from an insurer or self-insured entity associated with a workers’ compensation, or a liability claim when there is (1) reasonable expectation of payment under the workers compensation laws or plan; AND (2) a demonstration of responsibility for those charges.
Although these are the underlying factors demonstrating when reimbursement is required, there are other statutes and regulations that limit Medicare’s recovery rights. 42 U.S.C. §1395y(b)(2)(B)(vi), is one such statute and states the following, which notably indicates the statute applies to primary plans:
Notwithstanding any other time limits that may exist for filing a claim under an employer group health plan, the United States may seek to recover conditional payments in accordance with this subparagraph where the request for payment is submitted to the entity required or responsible under this subsection to pay with respect to the item or service (or any portion thereof) under a primary plan within the 3-year period beginning on the date on which the item or service was furnished.
Some Federal Courts have determined that the statute’s three-year date of service limitation only applies to group health plans and not primary plans. This interpretation, however, is inconsistent with the statute and legislative history.[1]
While these decisions have focused heavily on the first sentence of the statute that identified group health plans, these decisions fail to reconcile the remaining sections which state Medicare may seek reimbursement “with respect to the item or service….under a primary plan…”
A primary plan is defined under the Medicare statute as including both group health and non-group health plans, as follows:
a group health plan or large group health plan, to the extent that clause (i) applies, and a workmen’s compensation law or plan, an automobile or liability insurance policy or plan (including a self-insured plan) or no fault insurance, to the extent that clause (ii) applies. An entity that engages in a business, trade, or profession shall be deemed to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance, or otherwise) in whole or in part.
The Ohio Northern District Court in MSP Recovery Claims, Series LLC v. Grange Ins. Co., states that legislative history explains the three-year dates of service argument applies to only group health plans.
However, taking a closer look at the language in H.R. REP. 105-149[2] used by the Court for Grange, the report demonstrates there was a desire to limit claims filings defenses for group health plans, but stops short of limiting the statute only to group health plans:
In many cases where MSP recoveries are sought, claims have never been filed with the primary payer. Identification of potential recoveries under the data match process typically takes several years—considerably in excess of the period many health plans allow for claims filing.
A 1994 appeals court decision held that HCFA could not recover overpayments without regard to an insurance plan’s filing requirements. Explanation of Provision.
The provision would specify that the U.S. could seek to recover payments if the request for payments was submitted to the entity required or responsible to pay within 3 years from the date the item or service was furnished. This provision would apply notwithstanding any other claims filing time limits that may apply under an employer group health plan. The provision would apply to items and services furnished after 1990. The provision should not be construed as permitting any waiver of the 3-year requirement in the case of items and services furnished more than 3 years before enactment.
The legislative history identifies there was a concern across the board against “primary payers” with considerably more issues with “health plans.” However, a limitation to only group health plans is not apparent in the legislative history. This is further demonstrated in the second paragraph of the report which states the provision applies “to the entity required or responsible to pay within three years…”
If the report stated the provision applies “to the group health plan required or responsible to pay within three years,” The reasoning of the Court for Grange would be more consistent with the legislative history.
Despite the decisions mentioned, the three-year dates of service statute should apply to other types of insurance beyond group health means insurers, and beneficiaries should consider disputing conditional payments on this basis, if appropriate.
We will follow up as more cases become available and this dispute should be available against recoveries from Medicare Parts A and B. If you have any questions about this case and its impact, please contact us at [email protected].
[1] MSP Recovery Claims, Series LLC v. Progressive Corporation and MSPA Claims 1, LLC v. Kingsway Amigo Ins. Co
[2] Section 4702 – Clarification of time and filing limitations Current Law of H.R. REP. 105-149