In a Volatile Political Climate MSAs & Professional Administration Provide Much Needed Assurances

March 17, 2017

Learn why MSAs and professional administration offers stability in an otherwise volatile and partisan political environment in this joint article between Ametros Financial and Tower MSA Partners

These first few of months of 2017 have been, to put it mildly, volatile in national politics. The incoming Trump Administration and a Republican Congress are poised to tackle the federal budget, Medicaid, and the Affordable Care Act (Obamacare) among many other federal programs. All of these issues have sharp partisan divides, however no matter where your views lay on the political spectrum, if you are a professional involved in the workers compensation industry, these issues may have a big impact on how you can be successful at your job.

This article looks at what impact the Trump administration and a Republican-controlled Congress may have on Medicare Set-Asides (MSAs) in the context of the legislative and regulatory history of the Medicare Secondary Payer (MSP) Act and how the uncertainty resulting from potential changes to federal healthcare programs results in MSAs and professional administration being even more relevant in the settlement of workers’ compensation cases.

The MSP Act Has Been and Remains Bipartisan

A review of the history of the MSP Act demonstrates a noticeably bipartisan effort to improve and expand its applicability and enforcement mechanisms. The MSP Act was enacted in 1980 during President Carter’s administration. Subsequent to its passage, provisions were added over the Reagan, George H.W. Bush and Clinton administrations, all emphasizing Medicare being secondary to group and non-group health plans. The most notable legislative expansion occurred in 2007 when a Democratic-controlled Congress passed, and President George W. Bush signed into law, the Medicare, Medicaid and SCHIP Extension Act which included Section 111 Mandatory Insurer Reporting provisions for group and non-group health plans. There also continues to be a decade long effort to pass bipartisan legislation which would implement certain reforms to the Workers’ Compensation Medicare Set-Aside (WCMSA) review process. While the most recent WCMSA reform bill died in the last Congress it is expected a new bill will be reintroduced in 2017.

Besides legislative expansion of the MSP Act, during President George W. Bush’s administration there occurred the release of the July 23, 2001 CMS memo, commonly called the “Patel Memo.” The Patel memo and subsequent CMS memos effectively formalized a process for CMS to review and approve WCMSAs.

MSA reviews continued, Medicare conditional recovery processes expanded and Section 111 was implemented all during the course of President Obama’s administration. The only legislative change to the MSP Act occurring during the Obama years was the passage of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act) which was a successful bipartisan effort to address deficiencies identified in the MSP Act, particularly Section 111 reporting and Medicare conditional payment recovery.

Since the enactment then of the MSP Act in 1980 it has continued to be expanded and enforced consistently across both Republican and Democratic Presidents and Congresses.

Why has there not been a partisan divide? The simple reason is that the MSP Act forces entities other than the federal government to pay which has benefits for both political parties. For Democrats it demonstrates their protecting the viability of a federal government entitlement program while for Republicans it demonstrates their protecting taxpayers by shifting costs away from the government. While the Trump administration has to our knowledge never issued any MSP policy statements, based upon the past bipartisanship on this issue, our expectation is the administration will continue and possibly expand the MSP compliance programs at CMS.

Uncertainty Over Federal Healthcare Programs to Drive Assurance with MSAs

President Trump has indicated repeatedly that he will not reduce benefits to Medicare beneficiaries. Nonetheless, Medicare beneficiaries are facing premium increases. Notably, a Kaiser Family Foundation report indicated Part D premiums are rising by an average of 9% in 2017. As for Medicaid, the Trump administration is supporting a block grant program which would give more discretion to the states in formulating and implementing their own Medicaid programs compared to the present process which includes significant federal oversight. Finally, and most significant, is the Republican-led initiative to “repeal and replace” the Affordable Care Act, commonly known as ObamaCare. These potential changes to statutory programs create uncertainty for injured workers contemplating settlement of medical in their workers’ compensation cases.

Uncertainty for injured workers exists with programmatic changes to Medicare and private group health plans which are increasingly driven by a more value-based approach to healthcare delivery. A value-based approach provides incentives to medical providers to be more cautious with prescribing treatments and medications which may have limited value to the patient. This is also usually tied in part to a utilization review process which places limits on care through the use of evidence-based medicine. While in the past some injured workers have settled medical stemming from their work related injury confident that they could shift their ongoing work-related care, if any, to their group health plan, such coverage may now be limited. And when it comes to shifting costs to Medicare, CMS’s long-standing policy is such costs must be accounted for in an MSA.

MSAs and professional administration A Flight to Certainty

Accordingly, injured workers and their attorneys when settling their workers’ compensation cases will look for certainty where it can be obtained so that they have the assurance of access to medical care for their future injury-related care. For claimants who are Medicare beneficiaries or are close to becoming Medicare beneficiaries, such assurance can be obtained by a properly allocated MSA which is CMS-approved, when necessary, and professionally administered to maintain the MSA funds over life-expectancy in compliance with CMS rules.

Tower MSA Partners is committed to providing employers and claimants a reasonable MSA allocation which, along CMS guidelines, properly accounts for future injury-related and Medicare-covered medical care without unnecessary overfunding. This often includes Tower MSA reaching out to treating physicians to confirm current care regimens or clarity regarding ongoing medication and treatment prior to submission of the MSA to CMS.

While CMS approval of the MSA and subsequent funding provides assurance at the point of settlement that funds for injury-related medical have been provided, equally important is proper administration of those funds such that an injured worker can be assured the funds for his or her care will last over their life expectancy and that there will be a seamless transition to Medicare for payment if the funds every run out.

Ametros’ professional administration service, CareGuard, secures the injured party discounts on their medical treatment, and prescription costs. All the while they are free from utilization review allowing them to not have to worry about their treatment being rejected. Additionally, CareGuard will makes sure all MSA expenses are accounted for in the eyes of Medicare. Cost-effective programs like CareGuard are in place to protect the injured worker post-settlement and ensure compliance with CMS requirements for MSA administration.

In this current era of high uncertainty, all parties can rest easy by focusing on known methods to protect themselves and the injured party throughout the claim handling and settlement process. That’s why many believe it is more critical than ever to obtain an adequate MSA that will cover the ongoing medical care of the injured party and, upon settlement, to have a professional administrator help the injured party make the funds last as long as possible and do all the required Medicare reporting.

For further information or questions om MSAs and professional administration, please contact:

Tower MSA Partners
Dan Anders (847) 946-2880 or Daniel.anders@towermsa.com

Learn more at: www.towermsa.com

Ametros

Porter Leslie – (339) 223 9857 or pleslie@ametroscards.com
or
Jayson Gallant – (339-234-3420) or jgallant@ametroscards.com

Learn more at: www.ametroscards.com

CMS to Begin Referencing 2012 Life Expectancy Table on April 1

March 13, 2017

The Centers for Medicare and Medicaid Services (CMS) announced on 3/8/2017 that it “will begin referencing the CDC’s Table 1: Life Table for the total population: United States, 2012, for workers’ compensation medicare set aside (WCMSA) life expectancy calculations on April 1, 2017.” CMS presently uses the 2011 table, thus this announcement represents an expected annual update to the next available CDC table. In most instances the update to the most recen table represents at most a one-year change in the life expectancy used in the MSA report compared to the prior table. All Tower MSA reports completed on or after 4/1/2017 will reference the 2012 table.

The 2012 Life Table for the total population may be found on Pages 10-11 of the CDC report.

CMS Provides Another Piece of the Puzzle on Future LMSA Policy

March 2, 2017

While the Centers for Medicare and Medicaid Services (CMS) has yet to formally issue a policy regarding review of Liability Medicare Set-Asides (LMSAs), since a June 2016 announcement that it was considering expanding the WC MSA review process to liability and no-fault, CMS has nonetheless provided pieces of the puzzle which will ultimately make up a liability and no fault MSA review process. The most recent piece of the puzzle is an announcement by CMS that effective 10/1/2017, no Medicare payments are to be made to medical providers where a Liability Medicare Set-Aside (LMSA) or No-Fault Medicare Set-Aside (NFMSA) exists.

The announcement comes via the issuance of a CMS MLN Matters article directed to physicians and other medical providers submitting claims to Medicare Administrative Contractors (MACs) for services to Medicare beneficiaries. It directs these MACs to deny payment for medical care that is covered under an LMSA or NFMSA as identified in the Common Working File (CWF).

To clear up some of these technical terms, MACs process Medicare Part A and B payments to medical providers on behalf of Medicare. A Common Working File (CWF) is maintained by the CMS Benefits Coordination and Recovery Center (BCRC) and contains information on a particular claimant’s Medicare eligibility and, importantly, when Medicare should be considered secondary such that payment to a medical provider should be denied and directed instead to the primary plan.

BCRC presently keeps records of all WCMSAs that have been approved by CMS and funded through settlement (This is why CMS requires final settlement documents be submitted to BCRC post-settlement). The WCMSA funding information is placed in the CWF so that the MACs deny payment for medical care associated with the WCMSA until the WCMSA is exhausted. This directive from CMS makes this same process applicable to LMSAs and NFMSAs.

In response to this announcement, you would be correct in asking, how can CMS deny payment for medical care based upon an LMSA an NFMSA process that does not yet exist? Putting aside that some CMS Regional Offices have reviewed and approved LMSAs at their own discretion for quite some time, this does pose a very good question. CMS responds as follows:

CMS will establish two (2) new set-aside processes: a Liability Medicare Set-aside Arrangement (LMSA), and a No-Fault Medicare Set-aside Arrangement (NFMSA).

So CMS readily admits the new set-aside processes will be put in place at some point in the future. Such future date has already been tentatively set based upon CMS’s release, in December 2016, of its request for proposals for the new Workers Compensation Review Contractor which includes an optional provision to expand reviews to LMSAs and NFMSAs effective July 2018 (See prior blog post: CMS MSA Review Expansion to Liability Planned for 2018). Consequently, this directive to the MACs is implementing medical payment processing changes which will be required to be place once the LMSA/NFMSA review process is made available.

It is important to keep in mind that CMS has yet to release any guidance on such an expansion of the WCMSA review process to liability and no-fault and particularly how such a process would differ from that created for WC. Also note that CMS does not state that effective 10/1/2017 the MACs are to deny payment for all post-liability settlement injury-related medical care, rather, they are to “deny payment for items or services that should be paid from an LMSA or NFMSA fund.” The funds must exist for denial to occur. Accordingly, over 2017, as more pieces of the puzzle come together on CMS’s Liability and No-Fault MSA review policy, Tower MSA will provide further interpretation and guidance on what will be one of the most significant developments in MSAs since CMS formalized the WC MSA review process in 2001.