Medicare collection agency targets asbestos trusts

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Legislation & Litigation

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A major health insurance service collection agency is targeting about 60 viable asbestos trust funds, citing a failure to disclose settlement payments and reimburse health service providers.

Asbestos trusts are designed to compensate victims of illnesses caused by exposure to asbestos, including malignant mesothelioma, a rare cancer with no definitive cure.

MSP Recovery LLC, a leading Medicare / Medicaid recovery specialist, filed the first lawsuit last week against the JT Thorpe Settlement Trust, according to an article in the Wall Street Journal.

JT Thorpe Inc. is a former industrial equipment maker that filed for bankruptcy in 2002. The lawsuit was filed in US bankruptcy court in Los Angeles.

Attorney John Ruiz, managing director of MSP Recovery, told the Mesothelioma Center of Asbestos.com that he plans to file a complaint against five more trusts by the end of the month and the 60 asbestos trusts over the course of the next few months.

“When these companies don’t pay, it costs taxpayers money,” Ruiz said. “We have the right to collect.

Ruiz believes the lack of transparency around trusts has unfairly shifted the burden of treating patients to the general public through Medicare.

The lawsuit claims that the lack of payment reporting results in “huge financial losses” for Medicare Advantage programs, health care payers and physician groups, who are not properly compensated.

Trust officials say complaint has no merit

Asbestos trusts are not required to publicly disclose payment amounts, although business groups have argued for federal legislation that would require more reporting and better protection against potential fraud.

Steven Bray, executive director of the JT Thorpe Settlement Trust, told the Wall Street Journal that the trust “is convinced that the complaint filed by MSP Recovery and the related allegations are without merit and will vigorously defend themselves.”

Trusts are created by negligent companies that file for Chapter 11 bankruptcy protection and include rigorous, court-reviewed payment estimates to address current and future claims.

These are companies that knew, or should have known, that asbestos was toxic and that exposure to asbestos could lead to serious health problems. Trusts are often created by creditworthy companies that have been inundated with lawsuits.

According to various accounts, there are now 60 asbestos trust funds with assets estimated at $ 30 billion, designed to be paid off in the years to come.

Since the early 1980s, the trusts have paid claimants about $ 20 billion. Payments of mesothelioma trust claims can range from $ 7,000 to $ 1.2 million, with a median value of $ 180,000. Many applicants request money from more than one trust.

Occupationally exposed workers are the most common claimants against former employers. Household members exposed to second-hand asbestos and family members who have lost someone due to an asbestos disease can also file a claim.

Some of the most prominent companies with asbestos trusts include:

  • Owens Corning Company
  • Johns-Manville Company
  • Armstrong World Industries
  • Pittsburgh Corning Corporation
  • United States Gypsum
  • WR Grace and company
  • Babcock & Wilcox
  • Western asbestos
  • DII Industries

Disclosure of the regulations at issue in the lawsuit

According to the lawsuit filed earlier this month, the JT Thorpe Settlement Trust has paid more than 5,000 claims worth $ 167 million since 2006.

Correspondence between MSP Recovery and the JT Thorpe Trust has been included in the lawsuit file. Executors said the confidential claims could not be disclosed and that they were not bound by the Medicare registration and reporting obligations that MSP Recovery wanted.

Also part of the case, MSP Recovery’s own investigation determined that in 284 of the trust claims, medical bills were paid by Medicare, the government agency, and no reimbursements were provided.

MSP maintains that when Medicare provides patient care, asbestos trusts are obligated to report compensation and reimburse Medicare providers.

“These are pretty straightforward cases,” Ruiz said. “I hope that in a year, or a year and a half, things will have changed.”

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