In certain cases, it may make good business sense to resolve an asbestos claim out of court.  But an omnipresent source of frustration with settlements and the processing of Release documents in asbestos litigation is determining whether the settlement is reportable to the Centers for Medicare and Medicaid Services (CMS).  The stakes in “getting it right” are high.  The responsibility to report does not only fall to plaintiffs – defendants/insurers who fail to properly report risk penalties and reimbursement liability.

The short and tortured answer is that if: (a) a plaintiff was a Medicare or Medicaid beneficiary, and (b) one of those programs paid for a portion of the plaintiff’s treatment for an asbestos-related disease; then the settlement is reportable to CMS if, (c) through the complaint or in the discovery process, allegations are made that the plaintiff was exposed to asbestos from a client’s product after the magical date of December 5, 1980.  It will come as no surprise that the above is often complicated by a disagreement among opposing counsel as to the dates of alleged asbestos exposure.

Plaintiffs’ complaints are frequently drafted broadly to encompass a plaintiff’s entire working career, and for many plaintiffs, their careers routinely extend well into the 2000s.  As a result, the timeframe of alleged exposure to asbestos is either concurrent with the entirety of a plaintiff’s career, and in some cases, can simply be unspecified.  In addition, allegations against all defendants (sometimes upwards of 50 in number) are lumped together within this broadly-alleged exposure period.

The best practice for defense counsel is to address these issues as early as possible, and it begins first with depositions.  The deposition(s) in the case are early opportunities to truly narrow and pinpoint the timeframe of a plaintiff’s alleged work with a client’s product.  And if the case later lends itself to resolution, Medicare reporting must be discussed as part of the settlement negotiations process.  Addressing the timeframe of a client’s product identification, and whether the settlement is reportable to CMS, is a necessary step in all settlement negotiations.  Memorializing the dates of alleged product usage and agreement on Medicare reporting with plaintiff’s counsel is the surest way to streamline back end paperwork for settlement processing.

Additionally, some outstanding concerns regarding CMS reporting may be alleviated by working with a cooperative plaintiffs’ counsel.  Most plaintiffs’ counsel have been agreeable to amending the complaint to accurately reflect the dates of alleged asbestos exposure from a particular defendant’s product if it occurred before December 5, 1980.  Another new and creative tactic is to request that plaintiffs’ counsel sign a partial dismissal, whereby any claims for alleged post-December 5, 1980 exposures are dismissed.

Taking extra time and effort on the front end of both litigation and settlement negotiations will alleviate headaches down the line, and ensure a well-reasoned decision to resolve a case serves the interest of the settling party.