Source: https://www.medivest.com/author/nreifler/
Timestamp: 2020-07-10 08:06:06
Document Index: 179181447

Matched Legal Cases: ['§ 1395', '§1395', '§ 411', '§ 1395', '§ 1395', '§ 1395', '§ 411', '§1395', '§1395', '§ 1395', '§111', '§ 1395', '§ 1395', '§ 1395']

Natt Reifler, JD, CMSP, Author at Medivest
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January 15, 2019 by Natt Reifler, JD, CMSP
Announced and Unannounced Changes in the New WCMSA Reference Guide Now in Version 2.9 – A Peak Behind the CMS Curtain
CMS published the latest version of the WCMSA Reference Guide as Version 2.9 (Reference Guide or Guide) on January 4, 2019. In addition to changes announced in Section 1.1 of the Reference Guide titled Changes in This Version of the Guide, there are several other changes made that were not announced. The announced changes were as follows:
Version 2.9 of the guide includes the following changes:
• To eliminate issues around Development Letter and Alert templates auto populating with individual Regional Office (RO) reviewer names and direct phone numbers, these will now display the generic “Workers’ Compensation Review Contractor (WCRC)” and the WCRC customer service number “(833) 295-3773” (Appendix 5).
• Per CMS’ request, certain references to memoranda on cms.gov have been removed.
• The CDC Life Table has been updated for 2015 (Section 10.3).
• Updates have been provided for spinal cord stimulators and Lyrica (Sections 9.4.5 and 9.4.6.2)
Below, in numerical order, please find some of the main changes made by CMS, many of which were not announced in Section 1.1 quoted above. Sections, titles and additions have been bolded for emphasis and ease of reading.
A change in Section 4.1.1, titled Commutation and Compromise, on page 4, was one of the announced changes, and omits the previous Reference Guide’s reference to the July 2001 WC Regional Office (RO) Memorandum known in the industry as the Patel Memo. This is consistent with the statement in Section 1.0 that the Reference Guide “. . . reflects information compiled from all WCMSA Regional Office (RO) Memoranda issued by CMS, from information provided on the CMS website, from information provided by the Workers Compensation Review Contractor (WCRC), and from the CMS WCMSA Operating Rules. The intent of this reference guide is to consolidate and supplant all historical memoranda in a single point of reference. Please discontinue the reference of prior documents.” The concept is that the Reference Guide is the policy of CMS and prior documents or Memos it has issued should not be referred to or otherwise used to support a party’s position regarding matters addressed in the Reference Guide unless it continues to be referenced in the Reference Guide.
Section 4.2, titled Indications That Medicare’s Interests are Protected, has a new unannounced on page 5 bullet stating:
• CMS’ voluntary, yet recommended, WCMSA amount review process is the only process that offers both Medicare beneficiaries and Workers’ Compensation entities finality, with respect to obligations for medical care required after a settlement, judgment, award, or other payment occurs. When CMS reviews and approves a proposed WCMSA amount, CMS stands behind that amount. Without CMS’ approval, Medicare may deny related medical claims, or pursue recovery for related medical claims that Medicare paid up to the full amount of the settlement, judgment, award, or other payment.
Medivest’s take on the subject: CMS makes it sound enticing for Workers’ Compensation entities by using the word “finality.” Many parties have used the voluntary process to obtain approvals but have felt there has been a lack of consistency in review standards, especially from one contractor to another. Blogs and websites of many other companies that prepare Medicare Set-Aside (MSA) allocations indicate that they have experienced an increase in surprise counter highers over expenses like off-label prescription drug use as well as some other medical services when submitting WCMSAs to CMS for approval. As a result of what may have been perceived as a lack of consistency or perhaps a lack of confidence that the counter highers reflect real-world evidence-based needs of injured parties, many settling parties have seemed less inclined to choose submission as a regular practice, even when WC settlements fall within the CMS workload review thresholds, opting instead to follow the Medicare Secondary Payer Act, 42 U.S.C. § 1395y(b) et. seq. (MSP), and its corresponding regulations, instead of the voluntary policies of CMS.
On pages 8-9, under Section 8.1, titled Review Thresholds, two new unannounced examples have been included as follows:
Example 1: A recent retiree aged 67 and eligible for Medicare benefits under Parts A, B, and D files a WC claim against their former employer for the back injury sustained shortly before retirement that requires future medical care. The claim is offered settlement for a total of $17,000.00. However, this retiree will require the use of an anti-inflammatory drug for the balance of their life. The settling parties must consider CMS’ future interests even though the case would not be eligible for review. Failure to do so could leave settling parties subject to future recoveries for payments related to the injury up to the total value of the settlement
($17,000.00).
Example 2: A 47 year old steelworker breaks their ankle in such a manner that leaves the individual permanently disabled. As a result, the worker should become eligible for Medicare benefits in the next 30 months based upon eligibility for Social Security Disability benefits. The steelworker is offered a total settlement of $225,000.00, inclusive of future care. Again, the steelworker [typo fixed] is offered a total settlement of $225,000.00, inclusive of future care. Again, there is a likely need for no less than pain management for this future beneficiary. The case would be ineligible for review under the non-CMS-beneficiary standard requiring a case total settlement to be greater than $250,000.00 for review. Not establishing some plan for future care places settling parties at risk for recovery from care related to the WC injury up to the full value of the
Medivest’s take on the subject: These examples illustrate CMS’s position that Medicare’s future interests need to be considered even if the dollar amount of the judgment, settlement, award or other payment does not meet the CMS workload review thresholds. The examples emphasize that CMS considers the establishment of a plan for future care to be a priority and that CMS is serious about protecting Medicare’s future interests. These examples further spell out that CMS reserves the right to request an injured party to fully exhaust the amount of money equal to the entire settlement (not mentioning anything about allowing for a reduction of procurement costs such as attorney’s fees and costs expended to obtain the settlement typically allowed to be deducted under MSP regulations when parties timely request to resolve conditional payment/Medicare liens) when an injured party who is compensated for future medicals, fails to establish a plan for future care.
On page 9 under Section 9.0, titled WCMSA Submission Process Overview, CMS allows for a WCMSA proposal to be submitted either by paper or CD to the Benefits Coordination & Recovery Center or online via the WCMSA Portal (WCMSAP) and clarifies that these are the only acceptable submission delivery methods to be used.
In Section 9.4.5, titled Medical Review Guidelines, under the subsection heading Spinal Cord Stimulators on page 22, the following language was added to change the former policy of not including lead implantation in revision surgeries to the newly adopted policy whereby “Routine replacement of the neurostimulator pulse generator includes the lead implantation up to the number of leads related to the associated code. Revision surgeries should only be used where a historical pattern of a need to relocate leads exists.”
In Section 9.4.5, titled Medical Review Guidelines, under the subsection Pricing for Spinal Cord Stimulator (SCS) Surgery on page 22, the following text was inserted “SCS pricing is based on identification of: 1.) Rechargeable vs. Non-rechargeable and 2.) Single vs. Multiple Arrays (leads). If unknown, CMS will default to non-rechargeable single array.”
In Section 9.4.5, titled Medical Review Guidelines, under the subsection Pricing for Spinal Cord Stimulator (SCS) Surgery on page 22, the following language was deleted: “Preadmission Testing will be included where appropriate.”
In Section 9.4.5, titled Medical Review Guidelines, under the subsection Pricing for Spinal Cord Stimulator (SCS) Surgery, a table titled Table 9-3: Spinal Cord Stimulator Surgery CPT Codes on page 24, was expanded from three procedure (CPT) codes previously listed for Post Placement System Testing to a total of 12 including the same Post Placement System Testing as well as a series of CPT codes for Pre-Placement Psychological Testing, Anesthesia, and various other codes for the implantation procedures, etc. along with detailed descriptions of each.
In Section 9.4.6.2, titled Pharmacy Guidelines and Conditions, under the subsection Medically Accepted Indications and Off-Label Use, on page 28, there are now two detailed examples of off-label use instead of only one off-label use example in the prior version. The additional language appears in bold as follows:
Example 2: Trazodone” – which was previously described as – “Trazodone is approved by the FDA for the treatment of major depressive disorder,
but is commonly given off-label to treat insomnia. So the WCRC would include trazodone in a WCMSA if used to treat insomnia, if it is related to the workers’ compensation injury.”
Medivest’s take on the subject: This seems to be a situation where the new WCRC has been including more off-label drugs in its counter highers than the prior contractor, with the expensive drug Lyrica, gaining the most industry attention. Entities submitting WCMSAs for approval should be aware of the language referred to on page 28 of the Reference Guide that cites the Medicare IOM (Internet Only Manual) rules concerning Medicare covered off-label usage. The standard is as follows, “FDA approved drugs used for indications other than what is indicated on the official label may be covered under Medicare if the carrier determines the use to be medically accepted, taking into consideration the major drug compendia, authoritative medical literature and/or accepted standards of medical practice accepted, taking into consideration the major drug compendia, authoritative medical literature and/or accepted standards of medical practice.” Because this standard is so broad and the CMS and its WCRC seems to be taking an expansive approach to what types of off-label use is determined to be includable, parties seeking to control costs but still interested in CMS submission should consider professional consultations with treating physicians as to whether there are less costly medications and/or alternate treatment/prescription doses that can be utilized, implemented, and confirmed as equally effective, prior to submission.
Under Section 10.4 Section 20 – Life Care / Future Treatment Plan, page 43, a new statement “A Future Treatment Plan is required in the absence of a Life-Care Plan” makes it clear that there is a minimum requirement for future treatment to be listed in a submitted allocation in absence of a Life-Care Plan.
Medivest’s take on the subject: This is not really news because the term Future Treatment Plan existed in the prior Reference Guide’s title for this section. This seems to be a way to bring some consistency to the idea and to tie the term Future Treatment Plan together with the terms Future Treatment and Future Treatment Summary that also appear (and previously appeared) in the section.
In Section 10.5.2, titled Use of WC Fee Schedule vs. Actual Charges for WCMSA, on page 43, the state of Virginia was removed from the list of states that do not have a state Workers’ Compensation (WC) Fee Schedule. The states that do not have a WC fee schedule currently are Indiana, Iowa, Missouri, New Hampshire, New Jersey, and Wisconsin. The Reference Guide instructs, “Do not use a fee schedule in a state that does not have a fee schedule.”
Under Section 16, titled Re-Review, there are three subheadings describing circumstances under which a party may request a Re-Review. Under the subheadings of Mathematical Error and Missing Documentation on page 55, the following unannounced Note was inserted:
• Disagreement surrounding the inclusion or exclusion of specific
treatments or medications does not meet the definition of a mathematical error.
• Re-Review requests based upon failure to properly review already submitted records must include only the specific documentation referenced as a basis for the request.
Under the third subheading titled Amended Review, the criteria and information remained the same, but the information was reformatted as follows with a phrase added to last note bullet in bold:
• CMS has issued a conditional approval/approved amount at least 12 but no more than 48 months prior.
• The case has not yet settled as of the date of the request for re-review.
• Projected care has changed so much that the submitter’s new proposed amount would result in a 10% or $10,000 change (whichever is greater) in CMS’ previously approved amount.
• Where a re-review request is reviewed and approved by CMS, the new approved amount will take effect on the date of settlement, regardless of whether the amount increased or decreased.
• This new submission may be delivered in both paper and portal formats. Please see the WCMSAP User Guide for more information.
In order to justify that the projected care would result in a 10% or $10,000 change (whichever is greater), the submitter must return CMS’ Recommendation Sheet that was included in CMS’ conditional approval letter and identify the following:
• Line items that were included in the approved amount, but are for care that has already been provided to the beneficiary. Please identify where references to records indicating that the care has already been provided can be found in the updated proposal.
• Line items for care that is no longer required. Please identify where references to replacement treatment can be found in the updated proposal.
• If additional care is required that was not otherwise included in CMS’ conditional approved amount, please add line items.
• In the event that treatment has changed due to a state-specific requirement, a life-care plan showing replacement treatment for denied treatments will be required if medical records do not indicate a change.
• The approval of a new generic version of a medication by the Food and Drug Administration does not constitute a reason to request an amended review for supposed changes in projected pricing.
• CMS will deny the request for re-review if submitters fail to provide the above-referenced justifications with the request for re-review.
• Submitters will not be permitted to supplement the request for re-review, nor will they be developed.
Under Section 17.3 Use of the Account on Page 57, the bolded language replaced prior language on the subject:
“Please note: If payments from the WCMSA account are used to pay for services other than Medicare-allowable medical expenses related to medically necessary services and prescription drug expenses for the WC settled injury or illness, Medicare will deny all WC-injury-related claims until the WCMSA administrator can demonstrate appropriate use equal to the full amount of the WCMSA.”
Medivest’s take on the subject: CMS is indicating that Administrators have the burden to show appropriate use of MSA funds and therefore, must keep accurate records to prevent mistaken denial of injury related Medicare covered claims by Medicare after MSA funds are exhausted.
Under Chapter 18 titled CMS Submission, after the sentence, “Additionally, the contractor must ensure that Medicare makes no payments related to the WC injury until the WCMSA has been used up”, the following language was added on page 60:
This is accomplished by placing an electronic marker in CMS’ systems used to pay or deny claims. That marker is removed once the beneficiary can demonstrate the appropriate exhaustion of an amount equal to the WCMSA plus any accrued interest from the account. For those with structured settlements, the marker is removed in any period where the beneficiary exhausts their available funds; however, it is replaced once the anniversary fund deposit occurs until the entire value of the WCMSA is demonstrated as entirely exhausted.
Medivest’s take on the subject: This is the first indication of an “electronic marker” and gives an idea of how the CMS computer system will be flagging those injury related medicals submitted for payment by Medicare, but that Medicare may deny.
In Appendix 4, WCRC Proposal Review Reference Tools on page 69, the link to CMS Memos and written references to CMS Memos going back to 2001 were removed.
All references in Appendix 5. Sample Letters to Sherri McQueen, as Acting Director, were changed to Sherri McQueen, Director, Financial Services Group Office of Financial Management.
In the Development Letter Sample, the CMS Regional Office Contact reference and contact phone numbers were removed and replaced with “the Workers’ Compensation Review Contractor (WCRC) at (833) 295-3773” on pages 81 and 85.
Medivest’s take on the subject: The WCRC now has the responsibility to field calls regarding submission of WCMSAs instead of the CMS Regional Offices.
Medivest will continue to follow changes in policy at CMS and in the actions of its Workers’ Compensation Review Contractor, Capitol Bridge, LLC, and will keep our readers up to date on developing trends.
December 7, 2018 by Natt Reifler, JD, CMSP
Notice of Proposed Rulemaking for Protecting Medicare’s Future Interests on the Horizon (For Auto, Liability (and Self-Insurance), No Fault, and Workers’ Compensation Cases)
This week, under a “Miscellaneous Medicare Secondary Payer Clarifications and Updates” title, the Office of Management and Budget (OMB) provided information that in September of 2019 there will be a Notice of Proposed Rulemaking (NPRM) issued by the Department of Health and Human Services (HHS) and CMS, its sub agency that runs Medicare, to “ensure that beneficiaries are making the best health care choices possible by providing them and their representatives with the opportunity to select an option for meeting future medical obligations that fits their individual circumstances, while also protecting the Medicare Trust Fund.” The abstract acknowledges that “[c]urrently, Medicare does not provide its beneficiaries with guidance to help them make choices regarding their future medical care expenses when they receive automobile and liability insurance (including self-insurance) no fault insurance, and workers’ compensation settlements, judgments, awards, or payments, and need to satisfy their Medicare Secondary Payer (MSP) obligations.” Interestingly, the projected NPRM will be geared to clarifying MSP obligations to protect Medicare’s future interests regarding injury related future medicals regardless of the case type.
Stakeholders in the MSP compliance community must always look first to the Medicare Secondary Payer statute (a series of provisions beginning at 42 U.S.C. §1395y(b) commonly referred to as the MSP) to help determine how to best comply with the statute. However, while the MSP prohibits Medicare from making payment when a primary payer should pay and makes an exception for Medicare to be able to make payments conditionally provided it gets paid back, no part of the MSP or any related regulation references the term Medicare Set-Aside (MSA) or addresses what a Medicare beneficiary’s obligations are under the law as it relates to Medicare’s future interests.
Because the law does not directly address MSAs or future interests of Medicare, parties look to case law interpreting the MSP, regulations issued by CMS, a Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide published by CMS, and MSP compliance companies and attorneys, to help guide MSP compliance decision making. While CMS has issued memos discussing MSAs and have clarified that there is no difference under the law between workers’ compensation and liability cases in terms of the need to consider and protect Medicare’s interests, uncertainty has remained as to the “how” and “when” as opposed to the “why”.
MSP stakeholders have been waiting for clarification from CMS regarding Liability Medicare Set-Asides (LMSAs) and No Fault MSAs for quite some time. It is generally understood that an injured party that receives payment from an injury complies with the MSP regarding Medicare’s future interests, when he or she does not prematurely bill Medicare for injury related Medicare covered medicals. In the workers’ compensation context, because CMS sets workload review thresholds at over $25,000 when an injured worker is a Medicare beneficiary and at over $250,000 when the injured worker has a reasonable expectation of becoming a Medicare beneficiary within 30 months, this has been a standard that many in the industry look to when trying to determine when to protect Medicare’s future interests in injury cases outside of the workers’ compensation field. This “when” has not yet been clarified by CMS. Confusion over the “how” to protect Medicare’s future interests has surrounded LMSAs because liability cases often settle for amounts lower than full case value due to questions over causation, comparative or contributory negligence or hybrids of those concepts, policy limits, caps on damages, along with the allowance for a variety of non-economic damages in liability cases. While the abstract describing the future Notice of Rulemaking does not use the term Medicare Set-Aside or MSA, it describes precisely what Medicare Set-Asides are designed to address.
As described, the proposed rule would address the protection of Medicare’s future interests in each of the Non Group Health Plan (NGHP) categories described in the MSP and its regulations, those being automobile and liability insurance (including self-insurance) no fault insurance, and workers’ compensation cases. The OMB notification defines the future action as a NPRM. Prior to the distribution of the Notice of Rulemaking, agencies typically publish a notice in the Federal Register called an Advance Notice of Proposed Rulemaking or ANPRM, to “test out” a proposal or to solicit ideas before drafting its actual Notice of Proposed Rulemaking. The ANPRM is often an intermediate step for an agency to let the public know it intends to take official action in creating a regulation in the Code of Federal Regulations pertaining to a statute. The statute this NPRM would relate to is the MSP. An ANPRM had been announced in 2012 and it sought public comment but was subsequently withdrawn.
We have also written about some private MSP stakeholder meetings in 2018 during which CMS indicated that, while subject to change, denial of service would be their primary enforcement mechanism with respect to injury related Medicare covered future medicals in the liability area when specifically discussing Liability Medicare Set-Asides (LMSAs). With the addition of a Mandatory Insurance Reporting (Section 111 Reporting) section in the MSP effective in 2009, and the collection of Medicare beneficiary injury data by CMS now approaching 10 years, it seems inevitable that denials of service will increase for Medicare beneficiaries who fail to set money aside to cover their injury related Medicare covered items, services, and expenses. Due to the private stakeholder meetings CMS has had, it is not known whether CMS will provide an ANPRM prior to the NPRM.
Therefore, it remains to be seen how soon regulations clarifying the obligations of parties to protect Medicare’s future interests will be promulgated. Medivest will continue to keep you apprised as this important Medicare future interest matter progresses.
November 20, 2018 by Natt Reifler, JD, CMSP
Medicare Lien Investigation/Lien Resolution (Is Ignorance of MSPRP Procedures or Other CMS Access Channels a Valid Defense?)
Not following proper lien investigation procedures for the investigation and negotiation of Medicare liens can have far-reaching consequences on settling parties. Lien investigation means finding the dollar amount of conditional payments made by Medicare that are related to an injury for which another entity has the primary responsibility to pay under the Medicare Secondary Payer Act (MSP)[1]. For a plaintiff and their attorney or even a defendant paying a third party settlement, there could be MSP conditional payment exposure with potential recovery actions from the U.S. government. In many areas of law, a party seeking to enforce a lien needs to first file a document in court, providing notice to the party against whom it seeks to enforce the lien. The U.S.’s direct[2] statutory right to reimbursement of its conditional payments pursuant to the MSP does not require the filing of a document in court prior to becoming enforceable but does have a 60-day notice period from The Centers for Medicare & Medicaid Services (CMS), the agency that runs Medicare, after which interest begins accruing for parties that fail to pay CMS contractor final demands. While the procedures establishing Medicare’s conditional payment reimbursement rights differ from other lien procedures, this direct reimbursement right of the U.S. under the MSP is often referred to as a lien right.
The Plaintiff in Mayo v. NYU Langone Medical Center, a New York state trial court case, seems to have gotten a second chance at settlement when the court vacated a Settlement Agreement in the amount of $725,000 when Plaintiff’s counsel received a letter soon after settlement requesting a much higher Medicare reimbursement than was originally discovered. While the court’s decision worked in favor of the Plaintiff this time, (giving the Plaintiff and attorney a second crack at a higher settlement or trial), if the motion was denied, the attorney might have been accused of committing legal malpractice.
In Mayo, the Plaintiff and Defendant each received different conditional payment letters from the Centers for Medicare & Medicaid Services (CMS). While not ideal, this can occur when duplicate files are generated from the two different contractors that CMS uses for collecting conditional payment reimbursements, often referred to as Medicare liens, stemming from liability/auto/self-insured, workers’ compensation and/or no-fault cases. The Plaintiff’s letter from the Benefits Coordination and Recovery Center (BCRC) indicated that Medicare’s conditional payment amount was $1,811.95. The Defendant’s letter from the Commercial Recovery Center (CRC) indicated that Medicare’s then existing lien amount for conditional payments was $2,824.50. Before requesting or obtaining a Final Demand from the CMS web portal, the parties created a written Settlement Agreement, agreeing to settle the matter in its entirety for $725,000 inclusive of what the parties contemplated as a “Medicare-final” conditional payment reimbursement of no more than $2,824.50. The Defendant never signed the Settlement Agreement. Prior to settlement funds being disbursed, a Final Demand from CMS was received by the Plaintiff, the Executor of an Estate of a Medicare beneficiary, asking for repayment of the shocking amount of $145,764.08.
The Plaintiff attempted to appeal the Final Demand amount at the first few administrative stages but was not able to be heard by a U.S. District Court because he failed to exhaust his administrative remedies. Instead of completing all four administrative appeals before seeking federal court review, the Plaintiff went to state court and asked the court to void the Settlement Agreement. The Plaintiff argued that despite being in writing, the Settlement Agreement was unenforceable because it had not been signed by a representative for the Defendant and that there was a mutual mistake of fact concerning the Medicare lien amount. The court agreed with both arguments.
The CMS web portal, called the Medicare Secondary Payer Recovery Portal or MSPRP, was improved in July of 2018, to make it even easier for settling parties to obtain up to date conditional payment/lien reimbursement amounts. Congress, through the SMART Act amendments to the MSP[3], regulated by 42 C.F.R. § 411.39 of the Code of Federal Regulations, contemplated parties being able to rely on a download of a time and date stamped Final Conditional Payment Letter from the Medicare Secondary Payer Recovery Portal (MSPRP) provided there was proper notification/reporting of a pending settlement within 120 days prior to the anticipated settlement and after giving CMS at least 65 days to search for conditional payments to be reimbursed. The updated functionality of the web portal provides a tool allowing authorized users to view conditional payment correspondence and request electronic or paper copies of same.
On November 19, 2018, CMS announced a webinar on upcoming self-reporting functionality that will be added to the MSPRP in January 2019. Medivest will monitor this MSPRP enhancement and has representatives that regularly communicate with CMS via phone, fax, mail and the CMS MSPRP web portal to help parties stay up to date with CMS and avoid misunderstandings like the one that occurred in the Mayo case.
• It is crucial for prospective settling parties to investigate conditional payment reimbursement amounts or work with an entity familiar with lien investigation procedures.
• There is value in evaluating Conditional Payment Summary forms that accompany the conditional payment correspondence from Medicare to confirm all entries on the form are injury-related and/or determine whether some entries should be disputed[4].
• In addition to checking and verifying the correct demand amounts from CMS contractors, prior to settlement, steps should be taken by all parties to expand lien search inquiries beyond traditional Medicare (and Medicaid) to determine whether a Medicare Advantage Plan or Organization (MAP/MAO) made any conditional payments that could be recovered under the MSP.
• If a Claimant/Applicant is a Medicare Advantage Plan member and any payments by the Medicare Advantage Plan should have been paid by a primary payer, steps should be taken to get those conditional payments reimbursed promptly.
• During the lien investigation process, parties should analyze whether a compromise (reduction) of a lien or potentially a waiver may be appropriate.
• Medivest provides lien resolution services to help parties satisfactorily negotiate outstanding public and private health care matters including Medicare liens, Medicaid liens, Veterans Administration/TriCare liens, hospital liens, and doctors’ bills. Our lien resolution team works hard to dispute non-claim related bills, resolve and reduce outstanding bills/liens, and will seek refunds for amounts already paid when appropriate. Please reach out to discuss lien resolution today.
[1] 42 U.S.C. § 1395y(b)(2) et. seq.
[2] The MSP also provides the U.S. subrogation rights, subrogating the U.S. to the rights of any Medicare beneficiary as follows:
42 U.S.C.A. § 1395y (West)
[3] The MSP law says,
42 U.S.C. § 1395y(b)(2)(B)(vii)(III).
The protected period defined in subclause (V) is a 65-day period that can sometimes be extended another 30 days after a party, their attorney or other representative (such as a MSP Compliance company) has notified CMS through the MSP recovery web portal of a pending liability insurance (including self-insurance), no-fault insurance, or workers’ compensation settlement, judgment, award or other payment (“Settlement”). The entire process is outlined in the Code of Federal Regulations (C.F.R.) at 42 C.F.R. § 411.39. If after the 65 day Protected Period, the date/time stamped Final Conditional Payment Letter is downloaded within three days of a settlement, parties may reasonably rely on that Final Conditional Payment Letter. There seems to be some uncertainty whether the MSPRP Final Conditional Payment Letter may be re-requested at a later date if the settlement occurs later.
[4] There should be primary diagnosis codes obtained from the insurance carrier’s/Responsible Reporting Entity’s report of the claim under Section 111 of the Medicare Secondary Payer Act (MSP). It is important to parse out payments for co-morbid and other non-injury related payments made by Medicare that don’t count as conditional payments because disputes may only be made once during this process. Once disputed, unless CMS responds within 11 days from receipt, the dispute will be considered granted.
November 5, 2018 by Natt Reifler, JD, CMSP
Does Self-Administration Ever Make Sense?
Injured parties receiving lump sum settlements tend to spend their settlement money quickly. This quick spend risk is often described as dissipation risk. Statistics in a personal injury practice guide by The Rutter Group indicate that somewhere between 25 and 30% of accident victims spend all settlement money within two months of receiving the funds and that up to 90% of accident victims use all settlement proceeds within five years[1]. It would, therefore, seem prudent for attorneys representing injured parties to caution their clients about the quick spending tendency and to discuss ways to reduce that risk. One method to help reduce dissipation risk is the use of structured settlements with regular tax-free annuity payments, discussed in footnotes 4-6 of a prior blog article. Another option is using a professional administrator for payment of medical needs through Medical Custodial Accounts (MCAs) or via Medicare Set-Aside (MSA) accounts specifically designed to protect Medicare’s Trust Funds by preventing premature billing of Medicare for future injury related Medicare covered medical items and services (future medicals). MSAs, which can and are often funded via structured settlement arrangements, are most often considered when the injured party is a Medicare beneficiary or has a reasonable expectation of becoming one within 30 months of judgment, settlement, award or other payment (settlement) (30-month Medicare window[2]), and the settlement compensates future medicals that would ordinarily be covered and reimbursable by Medicare.
The Centers for Medicare & Medicaid Services (CMS) suggests in section 17.0 of its Workers’ Compensation Medicare Set Aside Arrangement (WCMSA) Reference Guide, currently in Version 2.8, that WCMSAs “should be administered by a competent administrator” and provides examples such as a professional administrator, a representative payee, the claimant, etc. Other than cases with traumatic brain injuries for which a court may render a person legally incompetent, the question becomes whether there should be a minimum level of competence for a person to be deemed capable of self-administering a WCMSA or a Liability MSA (LMSA).
CMS explains the administration process in section 17.5 of the WCMSA Reference Guide. Requirements for administration are summarized by CMS as follows:
• Claimants should submit annual self-attestations, just as professional administrators would.
• WCMSA funds must be deposited into interest-bearing accounts separate from any personal savings or checking accounts.
• WCMSA funds may only be used for medical services and prescription drug expenses related to the workers’ compensation injury that would normally be paid by/otherwise reimbursable by Medicare.
• CMS provides some examples of care/items that Medicare does not pay for including acupuncture, routine dental care, eyeglasses or hearing aids, and suggests that claimants get a copy of the booklet entitled “Medicare & You” for a more detailed list of non-Medicare covered items.
• CMS cautions that “if funds from the WCMSA are used to pay for services other than Medicare-allowable medical expenses related to medically necessary services and prescription drug expenses, Medicare will not pay injury-related claims until these funds are restored to the WCMSA account and then properly used up.”
• Even if a person is not a current Medicare beneficiary, the requirements and prohibitions are the same as if the injured party were a Medicare beneficiary.
• While whether to submit a WCMSA to CMS for review is voluntary, Claimants that lose Medicare entitlement after such CMS approval, “. . . are not entitled to release of WCMSA funds if they lose their Medicare entitlement. However, the funds in the WCMSA may be used for medical expenses specified in the WCMSA until Medicare entitlement is re-established or the WCMSA is exhausted.”
Are the above bullets easy to understand and follow? Does the WCMSA Reference Guide language clearly explain what is expected? Even if a person can understand what they are reading, are injured parties likely to comply with the described procedures?
Regarding WCMSAs, The National Council on Compensation Insurance, Inc. (NCCI) published a February 2018 research brief updating its 2014 study on WCMSA reviews. According to the 2018 NCCI brief, approximately 98% of all WCMSAs (from the study’s 11,000 MSA data sample between 2010 and 2015) were self-administered.
Shouldn’t CMS want to try to plug this 98% administration compliance hole? CMS has “highly recommended that settlement recipients consider the use of a professional administrator for their funds”, does that language go far enough to protect the Medicare Trust Funds, one of which (covering Medicare Part A hospital insurance) is on track to be exhausted in 2026, three years earlier than projected just a year ago?
Are injured parties flying blind when self-administering their MSA funds? How does the dissipation risk described above affect injured parties’ decision-making process? There is an entire industry devoted to helping injured parties consider and protect Medicare’s interests in accordance with the Medicare Secondary Payer Act[3] and that keep up with CMS policies on WCMSAs, LMSAs, and administration. Regardless of whether CMS might ever mandate professional administration, insurance carriers and attorneys for injured parties should want competent and professional compliance partners to dispute and negotiate Medicare conditional payment reimbursements, estimate future injury related Medicare covered medicals, and above all else, to help injured parties competently administer their Medicare Set-Aside funds.
After all, should injured parties really be the ones making payments, coordinating benefits and/or negotiating bills? Can they really be expected to keep up with the detailed accounting and reporting expected by CMS? CMS has shown a rekindled interest in both review of WCMSAs and LMSAs with the increased scope of work and dollar amount of its awarded WCRC Contract and in its recoveries of conditional payments. Because best in class administrators provide network discounts for Durable Medical Equipment and Prescription Drug pricing through Pharmacy Benefit Managers (PBMs), professional administration can help ease the burden of MSP compliance and save injured parties money.
• Professional administration should be thoroughly discussed with injured parties by their attorneys. After all, lawyers are not only attorneys, but “Counselors at Law”.
• Insurance carriers and their attorneys should see also see value in minimizing MSP exposure.
• Even when outside the commonly referred to 30-month Medicare window, when future medicals are in play, parties to a settlement should strongly consider the use of a professional administrator, regardless of whether the primary driver is to coordinate and negotiate bills, or to reduce dissipation risk.
• The need for professional administration becomes even more apparent when the injured party is within the 30-month Medicare window, now combining the advantages of wiser spending with reduced MSP exposure.
• Allowing non-competent individuals to self-administer MSA funds turns a blind eye on our nations’ at-risk Medicare Trust Funds.
• MSP enforcement by CMS regarding past medicals will likely continue to proceed via the conditional payment recovery process. MSP enforcement by CMS regarding future medicals will likely be addressed through denial of Medicare coverage for injury related medicals when beneficiaries ignore the law or don’t keep accurate records of their Medicare covered medical spending.
[1] The Rutter Group, “California Practice Guide: Personal Injury” Chapter 4.
[2] CMS workload thresholds established for suitability of review of WCMSAs, as listed in the current WCMSA Reference Guide, have one tier for claimants who are Medicare beneficiaries and one for claimants with a reasonable expectation of becoming enrolled in Medicare within 30 months of judgment, settlement, award or other payment.
[3] 42 U.S.C. §1395y(b)(2) et. seq.
October 23, 2018 by Natt Reifler, JD, CMSP
New Section 111 Reporting User Guide Published by CMS (But No New Information Provided on Penalties for Noncompliance)
On October 1, 2018 the Centers for Medicare & Medicaid Services (CMS) published a new user guide for entities in the Non Group Health Plan (NGHP[1]) category, regarding Section 111 Mandatory Insurance Reporting under the Medicare Secondary Payer Act’s (MSP)[2] amendment called the Medicare, Medicaid, and SCHIP[3] Extension Act of 2007 (MMSEA). The MMSEA reporting obligations are commonly referred to as Section 111 Reporting or simply Section 111 because they were listed in Section 111 of the Public Law amendment to the MSP[4]. Section 111 requires NGHP entities or in some cases, Third Party Administrators for NGHP entities, as Responsible Reporting Entities (RREs), to report data to CMS about injury claims. The reporting which must be electronically transmitted, is sent to CMS through its Benefits Coordination & Recovery Center (BCRC) contractor, and includes a large amount of information identifying Medicare beneficiaries, their injuries, their legal representatives, dates of injury, dates of payment, whether injury-related payments are ongoing or are paid in lump sums etc., provided the annually updated dollar threshold for reporting (currently $750 for accident or exposure cases) is met.
The updated MMSEA Section 111 Medicare Secondary Payer Mandatory Reporting Liability Insurance (Including Self-Insurance), No-Fault Insurance, and Workers’ Compensation USER GUIDE (Section 111 User Guide) is now in version 5.4.
Only two changes were announced in the new version of the Section 111 User Guide. The first change was the addition of an updated Paperwork Reduction Act disclosure and the second change was an update to the contact protocol for the Section 111 data exchange escalation process. The updated contact protocol is listed in its entirety below:
8.2 Contact Protocol for the Section 111 Data Exchange
In all complex electronic data management programs there is the potential for an occasional breakdown in information exchange.
If you have a program or technical problem involving your Section 111 data exchange, the first person to contact is your own EDI Representative at the BCRC. Your EDI Representative should always be sought out first to help you find solutions for any questions, issues or problems you have. If you have not yet been assigned an EDI Representative, please call the EDI Department number at 646-458-6740 for assistance.
The CMS and the BCRC places great importance in providing exceptional service to its customers. To that end, we have developed the following escalation process to ensure our customers’ needs are met. It is imperative that RREs and their reporting agents follow this process so that BCRC Management can address and prioritize issues appropriately.
1. Contact your EDI Representative at the BCRC. If you have not yet been assigned an EDI Representative, please call the EDI Department number at 646-458-6740 for assistance.
2. If your Section 111 EDI Representative does not respond to your inquiry or issue within two business days, you may contact the EDI Director, Angel Pagan, at 646-458-2121. Mr. Pagan’s email is apagan@ehmedicare.com.
3. If the EDI Director does not respond to your inquiry or issue within one business day, you may contact the BCRC Project Director, Jim Brady, who has overall responsibility for the EDI Department and technical aspects of the Section 111 reporting process. Mr. Brady can be reached at 646-458-6682. His email address is JBrady@ehmedicare.com. Please contact Mr. Brady only after attempting to resolve your issue following the escalation protocol provided above.
When initially enacted on December 29, 2007, the enforcement clause under 42 U.S.C. §1395y(b)(8)(E) announced that applicable plans “shall be subject to a civil money penalty of $1,000 for each day of noncompliance with respect to each claimant.” That clause was changed with the SMART Act amendment to the MSP on January 10, 2013, effective at the beginning of 2014, to the phrase “may be subject to a civil money penalty of up to $1,000 for each day of noncompliance with respect to each claimant.” In this same 2013 SMART Act MSP amendment, an additional paragraph was added requiring the Secretary of the U.S. Department of Health and Human Services (Secretary) to publish a notice in the Federal Register soliciting proposals during a 60-day period, specifying practices by which enforcement sanctions would or would not be imposed under subparagraph (E). After proposals were to be submitted and considered, the Secretary, in consultation with the Attorney General, and after a 60-day comment period, was to publish in the Federal Register proposed specified practices for which enforcement sanctions will and will not be imposed and to later issue final rules specifying applicable enforcement practices. About a year after the SMART Act amendment was enacted, CMS sought comment through an advanced notice of proposed rulemaking (ANPRM) for the types of practices that would or would not result in civil money penalties, along with other related questions. Final rules have still not been announced.
CMS wants “clean data” to be reported through Section 111 and has a process in place to test and reject reporting that does not meet CMS’ data quality rules. How and when penalties for noncompliance with Section 111 will really be enforced will likely not be answered until CMS, through the Secretary of HHS, takes the required regulatory steps of issuing final rules on the subject. Therefore, while most insurance companies and TPAs have set up internal systems to comply with Section 111, or paired with reporting agent vendors to help them comply, there is still time for Responsible Reporting Entities to establish a system to report Section 111 data without fear of reprisal.
Interestingly, another SMART Act initiative is now in its final stages of completion. That initiative has been the gradual removal of Social Security Numbers from Medicare ID numbers through the replacement of the SSN-based Health Insurance Claim Number (HICN) with a new non-SSN-based Medicare Beneficiary Identifier (MBI). CMS has estimated this project to be completed by April 2019. It has mailed almost 35 million new Medicare cards to date with a majority of seven total “waves” of mailing completed. Will CMS begin tackling the reporting conundrum next? While companies doing reporting may still use the HICN and are not yet required to use the MBI in Section 111 Reporting, it would be wise for companies to plan ahead and ready themselves for transmission of the new MBI format Medicare ID in the future.
[1] Entities in the NGHP category include Liability Insurance (including Self-Insureds), Workers Compensation Plans, and No-Fault Insurance.
[2] 42 U.S.C. § 1395y(b)(2) et seq.
[3] SCHIP stands for State Children’s Health Insurance Program
[4] Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) (P.L. 110-173, Title I, §111(a)), found within the MSP at 42 U.S.C. § 1395y(b)(8).
October 16, 2018 by Natt Reifler, JD, CMSP
Conditional Payment Collections – Make It Stop!
When Medicare makes a payment for medical items, services or expenses that another entity (Primary Plans or Primary Payers[1]) should pay under the Medicare Secondary Payer Act (MSP) [2], the payments that are made by Medicare are called conditional payments. Under the MSP provisions and its regulations, Medicare is entitled to be reimbursed for its conditional payments. The U.S. Department of Treasury (Treasury) has authority to collect conditional payments after being referred MSP debt cases from the Centers for Medicare & Medicaid Services (CMS), the agency that runs the Medicare program, when Primary Payers/settlement parties fail to timely pay final demands for conditional payments issued by CMS contractors. Treasury collection tools include the Treasury Offset Program, that allows Treasury to divert tax refunds or government benefits that would otherwise flow to Medicare beneficiaries or Primary Plans, as well as Private Collection Agency actions. If conditional payments are not timely paid to Treasury, the U.S. may also file lawsuits directly under the MSP through the Secretary of the U.S. Department of Health and Human Services (Secretary). Appealing the amount of the debt and/or requesting a reduction of the conditional payment demand amount via the compromise process is supposed to stop or at least delay the collections process while the appeal/compromise request is pending.
At the October 2018 educational conference of the National Alliance of Medicare Set-Aside Professionals in Baltimore, during a presentation led by Ted Doyle, V.P. Healthcare Markets for Performant Recovery, Inc., the Commercial Repayment Center (CRC) contractor for CMS, several members of the audience voiced concerns over the CRC prematurely referring conditional payment collections cases to Treasury. The frustration focused on the difficulty of getting prematurely referred debt recalled from Treasury. It seems that even when people take steps to appeal the debt and/or request reductions via the compromise (or waiver) process, collections can sometimes mistakenly proceed. Jacqueline Cipa, the Deputy Director for the CMS Division of MSP Program Operations, recommended diligent follow up by requesting an internal “elevation”/review with the appropriate CMS contractor and suggested that if a Treasury referral error is not corrected, to reach out to her via e-mail at Jacqueline.cipa@cms.gov.
The CRC contractor is usually the entity in charge of collecting conditional payment reimbursements from commercial Primary Payers prior to any Treasury involvement[3]. The Benefits Coordination & Recovery Center (BCRC) contractor for CMS, on the other hand, is the only entity to initiate collection attempts for reimbursement of conditional payments from Medicare beneficiaries. Primary Payers such as insurance carriers or Third Party Administrators (TPAs) sometimes use reporting agents for their MSP Section 111 Mandatory Insurance Reporting obligations under the MSP[4]. Those reporting agents are often the ones that are sent conditional payment correspondence, demand letters, intent to refer letters, and potentially, Treasury collection letters. If a reporting agent fails to provide notification to the respective carrier or TPA it reports for, a conditional payment collection could develop and be referred to Treasury before the carrier/TPA knows about it. Under that scenario, a lack of communication between the reporting agent and its client might lead to a referral of conditional payment debt without it technically being premature. However, if a debt is referred to Treasury as a result of an error, the responsible party should take immediate steps to recall the debt. If using a third party for reporting purposes, consider setting up a calendar system to follow up with any reporting agents to help prevent an inadvertent Treasury referral.
Regardless of whether a referral to Treasury has been made or not, it is wise to make a written request for a Redetermination (first level appeal) and to also consider whether a compromise (or even waiver in cases regarding Medicare beneficiaries) might be appropriate. There is a five-level appeal process if a party decides to appeal conditional payment reimbursement debt. The first four levels of appeal are administrative remedies and the fifth is a court based remedy, with a review by a U.S. District (federal) Court. If the matter is timely appealed at any level, collection action through the BCRC, CRC, or Treasury should stop until the respective appeals stage is completed.
A party is timely with its first level of appeal by providing a written request for a Redetermination within 120 days of a final demand. The appeal phase directly after a Redetermination is called a Reconsideration. It must be requested within 180 days of the Redetermination, may include new evidence, and is decided by a Qualified Independent Contractor (QIC). The third level of appeal must be requested within 60 days of the Reconsideration decision, is generally only based on the evidence previously presented during the first two appeal phases (unless good reason is shown why it was left out previously), and is heard before an Administrative Law Judge(ALJ). If the ALJ decision is unfavorable, the fourth appeal level is a request for Council Review within 60 days of the decision and takes place before the Medicare Appeals Council. The final appeal goes before a U.S. District Court and must be filed within 60 days of the Medicare Appeals Council Review. The entire process of exhausting administrative remedies takes a minimum of 420 days and is required before a party is allowed to appear before a federal judge.
Because going to federal court takes so much time and can become quite expensive, especially during the last two stages of appeal, parties have found it beneficial to enter into negotiations with the appropriate CMS contractor/CMS Collection Officer/Regional Office as appropriate for compromises of the conditional reimbursement amounts while the appeals process is taking place. The compromise/negotiation process can be established and run at the same time as the appeals process. Many times, matters can be satisfactorily resolved before having to move to even the second level of appeal. Medivest is available to help parties negotiate conditional payment reimbursement amounts/liens and appeal conditional payment amounts. Please contact us to discuss best practices regarding conditional payment negotiations/appeals.
[1] Both Group Health Plans and Non Group Health Plans (NGHPs) are Primary Plans under the MSP. Entities in the NGHP category include Liability Insurance (including Self-Insureds), Workers Compensation Plans, and No Fault Insurance.
[2] 42 U.S.C. § 1395y(b)(2) et seq.
[3] For commercial matters, it is most often the CRC contractor that sends these letters, although for matters prior to October 2015, and more recently during backlogs associated with the changeover to the new CRC contractor, the BCRC has initiated files for some commercial repayment matters. Parties are urged to pay careful attention to which entity sends each letter and to provide development information or other responses and/or requests to the respective entity that sends the letter.
[4] Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) (P.L. 110-173), found within the MSP at 42 U.S.C. § 1395y(b)(8).