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H.R. 5284 – The Medicare Secondary Payer and Workers’ Compensation Settlement Agreement Act of 2012

May 17, 2012

The Medicare Secondary Payer and Workers’ Compensation Settlement Agreement Act of 2012, H.R. 5284, was filed in the U.S. House of Representatives by Rep. Dave Reichert (R-WA) on April 27, 2012. The Government Printing Office released the text of the bill o May 7, 2012.

What H.R. 5284 Promises
Rep. Reichert purports that this bill “improves the Medicare Set-Aside process for workers compensation claims” and “provides clear and consistent standards for an administrative process that provides reasonable protections for injured workers and Medicare”.

Provides An Exemption From MSP Statute
H.R. 5284 amends the Medicare Secondary Payer (MSP) statute to provide an exemption from the Medicare Secondary Payer (MSP) statute for workers’ compensation settlements where any of the following occur:

• Total settlement is less than or equal to $25,000;
• Claimant is not eligible for Medicare at settlement date and is unlikely to become eligible for within 30 months;
• Future medical coverage is not included in the settlement;
• Settlement agreement does not limit or extinguish the right of the claimant to payment of future medical bills.

Defines “Qualified Medicare Set-Aside”
A (QMSA), as defined in H.R. 5284, is “a Medicare set-aside that reasonably takes into account the full payment obligation for present and future medical payments”. HR 5284 amends the MSP Statute such that a workers’ compensation settlement that includes a “qualified Medicare Set-Aside” (QMSA) will satisfy any obligation, with respect to present or future payment reimbursement under Section 1395y(b)(2) of the MSP statute.

To be considered as a QMSA, the MSA must give due consideration to:

• The illness or injury, age and life expectancy,
• the reasonableness of and necessity for future medical expenses,
• the duration of and limitations on benefits payable under the workers’ compensation law or plan and the relevant State workers’ compensation regulations and case law.

The QMSA must also:

• Include payment for items, services that are covered by the workers’ comp law or plan involved;
• Be based on the applicable workers’ compensation State fee schedule;
• Can (not must) be calculated using a proportional adjustment for compromised settlements that reduces the QMSA by the same proportion that the total settlement was reduced.

Under H.R. 5284, the current CMS review process remains intact. However, the follow requirements must be met during the review process to be considered a QMSA:

• The Secretary has 60 days to review the QMSA.
• Failure to meet that 60-day deadline will deem the QMSA to be approved.
• If denied, the Secretary must include specific reasons.
In addition, HR 5284 establishes an appeals process, with specific time deadlines, that entitles the dissatisfied party the right to all of the following:
• a reconsideration by the Secretary,
• a hearing before an administrative law judge,
• a judicial review.

Establishes a “Safe Harbor” Amount
Medicare set-asides of $250,000 or less are deemed QMSAs upon written consent of all parties to the settlement agreement, AND if a “safe harbor amount” is paid directly to Medicare.
The safe harbor amount is defined as “15% of the total settlement, excluding repayment of conditional payments and previously settled portions of the claim”. The bill gives the Secretary the authority to modify the safe harbor percentage if it is determined that the 15% rate causes significant negative impact.

Sets Time Limit for Conditional Payment Request
If the Secretary fails to provide conditional payment information within 90 days, then neither the claimant nor the payer is liable for any reimbursement to Medicare with respect to the conditional payment information being requested.
Sets QMSA Payment Not > Workers’ Compensation Fee Schedule
No one shall be liable for any payment amount established under a Medicare set-aside for an item or service provided to the claimant that is greater than the related workers’ compensation fee schedule amount. In addition, a provider may not bill a Medicare set-aside more than the payment rate used in the Medicare set-aside or the Secretary may apply sanctions.

 Treatment of state workers’ compensation law
If a workers’ compensation settlement agreement is accepted in accordance with the workers’ compensation law of a jurisdiction, then that acceptance shall be deemed conclusive. That includes determination of reasonableness of the settlement value, any allocation of funds, the projection of future indemnity or medical benefits that may be payable under State workers’ compensation law.

To view the text of H.R. 5248, click here.

Coming Soon – The Medicare Secondary Payer Recovery Portal

A new online Self-Service Tool to help manage your Medicare recovery case.

The Centers for Medicare & Medicaid Services (CMS) is in the process of implementing a new web-based tool designed to assist in and accelerate the resolution of Liability Insurance, No-Fault Insurance, and Workers’ Compensation Medicare recovery cases. The new tool is called, The Medicare Secondary Payer Recovery Portal (MSPRP).

The MSPRP will give users (attorneys, insurers, beneficiaries, and TPAs) the ability to access and update certain case specific information online. Activities that currently require written communication or telephone calls to the Medicare Secondary Payer Recovery Contractor will soon be able to be done through the portal.
The MSPRP will allow users the ability to electronically perform the following activities:
•Submit Proof of Representation or Consent to Release documentation – Instead of mailing in an authorization, users will be able to upload authorizations through the portal.

•Request conditional payment information – Requesting an updated conditional payment amount or a copy of a current conditional payment letter will be as simple as clicking a few buttons.

•Dispute claims included in a conditional payment letter – Users will be able to view the claims listed on the conditional payment letter and dispute unrelated claims online.

•Submit case settlement information – Users will be able to input settlement information online and upload a copy of the settlement documentation through the portal.

The MSPRP is scheduled to go live in July 2012. Additional details regarding the MSPRP will be shared on this website in the coming months.

Tower MSA Partners will be part of the MSPRP rollout.  More details will follow as to how to utilize this new electronic service.

Town Hall Teleconference Events – February through June, 2012

February 17, 2012

Mandatory Reporting for Liability Insurance (including Self-Insurance), No-Fault Insurance and Worker’s Compensation

Implementation of Medicare Secondary Payer Mandatory Reporting Provisions in Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007
(See 42 U.S.C. 1395y(b)(8))

The CMS will be hosting combined NGHP Policy and Technical Support related teleconference events. For these calls the format is opening remarks and a presentation by CMS, followed by a question and answer session with the audience. Following is the call schedule for the first half of 2012.

NGHP Policy and Technical Support Questions and Answers: These calls will address both policy and technical questions you have regarding Section 111 reporting. Policy discussions will focus on CMS policy supporting the Section 111 NGHP reporting requirements, and how policy is being and has been translated into procedures. Technical support questions will focus on EDI connectivity and data transmission, use of the COB Secure Website, disposition and error codes, and other aspects of the data exchange process. Both CMS staff and representatives of the CMS COBC EDI Department will be available throughout each call.

DATES:

  •  February 23 (Thursday), 2012
  •  March 22 (Thursday), 2012
  • April 24 (Tuesday), 2012
  • May 24, (Thursday), 2012
  • June 19 (Tuesday), 2012

Call-in time for all calls: 1:00 PM – 3:00 PM Eastern time. Participation is by telephone only.

Call-in line for all calls: (800) 603-1774

Pass Code: Section 111

Questions for the call: Please submit questions to PL110-173SEC111-comments@cms.hhs.gov.

Please begin dialing in approximately 20 minutes before the call start time, due to the large number of participants.

New Option to Self-Calculate Your Conditional Payment Amount

January 30, 2012

Just released from MSPRC (http://www.msprc.info/).

On February 21, 2012, the Centers for Medicare & Medicaid Services (CMS) will implement an option that allows certain Medicare beneficiaries to self-calculate Medicare’s final conditional payment amount prior to settlement. A full explanation, including instructions on how and when to elect this option can be found by clicking on the following link:

http://msprc.info/forms/SelfCalculatedFinalCP.pdf

The information provided includes eligibility criteria for this process, instructions on how to self-calculate the final conditional payment amount, CMS’ review process, tips, and an illustrative example for completing this new process.

CMS will continue to improve and refine this process. Therefore, we welcome your input and comments at a future teleconference.

Tower MSA Partners Seeks Experienced Salespeople

January 4, 2012

Tower MSA Partners is aggressively seeking experienced salespeople in both workers’ compensation and liability markets. Interested parties should forward their resumes to info@towermsa.com.  To speak with someone directly, please call 888-331-4941 and reference this post.
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New From MSPRC, A “Self-Calculated Final Conditional Payment Amount” Option

December 19, 2011

The Centers for Medicare & Medicaid Services (CMS) will be implementing an option that will allow certain Medicare beneficiaries to obtain Medicare’s final conditional payment amount prior to settlement. This option will be available in February 2012, for certain settlements involving physical trauma based injuries where treatment has been completed.

Under this option, the beneficiary or his representative will calculate the amount of Medicare’s conditional payment amount using information received from the Medicare Secondary Payer Recovery Contractor (MSPRC), the MyMedicare website, or other claims information available to the beneficiary. The MSPRC will review this amount and, if finding the amount accurate, will respond with Medicare’s final conditional payment amount within 60 days. To secure the final conditional payment amount, the beneficiary must settle within 60 days after the date of Medicare’s response.

In order to use this option, ALL of the following criteria must be met:

  1. The liability insurance (including self-insurance) settlement will be for a physical trauma based injury (the settlement does not relate to ingestion, exposure, or medical implant);
  2. The total liability settlement, judgment, award, or other payment will be $25,000 or less;
  3. The Date of Incident occurred at least six months before the beneficiary or his representative submits his proposed conditional payment amount to Medicare;
  4. The beneficiary demonstrates that treatment has been completed and no further treatment is expected either through a written physician attestation or by certifying in writing that no medical treatment related to the case has occurred for at least 90 days prior to submitting the proposed conditional payment amount to Medicare.

Explicit instructions on how to use this process will be posted on the Medicare Secondary Payer Recovery Contractor’s website at www.msprc.info by January 15, 2012. CMS will leverage existing processes to the greatest extent possible. This is an initial step to provide beneficiaries and their representatives with Medicare’s conditional payment amount prior to settlement. CMS plans to expand this option as it gains experience with this process.

New Fixed Percentage Option For Medicare’s Recovery Claim
Effective November 7, 2011, the Centers for Medicare & Medicaid Services has implemented a new and simple fixed percentage option that is available to certain beneficiaries. This option is available to beneficiaries who receive certain types of liability insurance (including self-insurance) settlements of $5000 or less.

A full explanation, including instructions on how and when to elect this option, is available in the Fixed Percentage Option section of both the Attorney and Beneficiary Toolkits.
Beneficiary Alert: $300 Threshold on Liability Settlements
Medicare has implemented a $300 threshold for certain Liability Insurance cases. If all of Medicare’s criteria are met, the MSPRC will not recover against the beneficiary’s settlement, judgment, award or other payment.

We have posted a detailed explanation in the Attorney and Insurer Toolkits.

Alert: Liability Insurance (Including Self-Insurance) and December 5, 1980 (12/5/1980):
Additional policy details have been provided by the Centers for Medicare & Medicaid Services on liability insurance (including self-insurance) cases involving exposure, ingestion, and implantation.  Click the link below to view the update.   http://www.msprc.info/forms/Exposure-Ingestion-TDL.pdf.

Workers’ Compensation Medicare Set-aside Portal (WCMSAP)

November 29, 2011

The Center for Medicare & Medicaid Services (CMS) has completed its Pilot Testing of the Workers’ Compensation Medicare Set-aside Portal (WCMSAP). The CMS will be conducting a Town Hall conference call on November 29, 2011 from 1:00 to 3:00 pm (EST), to introduce this initiative to submitters of proposed Workers’ Compensation Medicare Set-Aside Arrangement (WCMSAs) amounts, and to answer questions regarding the WCMSAP. After the Town Hall conference call, CMS will post the links of the WCMSAP application, and the WCMSAP Computer Base Training (CBT) Modules, on the Workers’ Compensation Medicare Set-aside Portal (WCMSAP) section page “Related Links Outside CMS.”

Please Note: The call in information for the WCMSAP Town Hall teleconference is:
Call in time: 1pm to 3pm
Call In Line: 1-(800) 603-1774
*Conference ID: 29840615

*Participants must use the Conference ID number to be allowed into the call.

Centers for Medicaid & Medicare Services (CMS) Town Hall Teleconference Call Summary

CMS Town Hall Teleconference Call Summary
November 22, 2011

The most recent Town Hall Teleconference was hosted by the Department of Health and Human Services Centers for Medicare & Medicaid Services (CMS) on Wednesday, November 16, 2011. Areas of technical concern discussed during the teleconference related to Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) mandatory reporting.

Below is a synopsis of the items discussed:

  •  CMS and Coordination of Benefits Contractor (COBC) responded to multiple callers who described scenarios in which Medicare beneficiaries were being denied payment and/or services for medical conditions unrelated to the workers’ compensation injury. In some situations the beneficiary was being directed to contact his/her workers’ compensation, no fault or liability claim adjuster to obtain authorization for procedures NOT related to the beneficiary’s covered injury.The CMS COBC representatives requested that specific examples of improper provider denials be directed to the individuals hosting the call and they would deal with the issues.As an adjunct, CMS restated the instructions in the 3.2 Version of the User Guidelines which direct RRE’s to report as many ICD9 codes as are applicable to the injury, but reinforced that ONLY those codes that describe the injury are to be reported. If ICD9 codes related to other medical conditions are reported, the COBC may assume that services related to these codes are to be covered by the RRE.
  • CMS discussed the ‘51 disposition code’ errors that are being generated when their system is unable to match on 3 of the 4 personal identification data elements being submitted by the RRE noting that it is extremely important that RRE’s go back and confirm that their info is correct.
    If the RRE has a claim to report, but is unable due to the ’51 disposition code’ error, the RRE may still be considered as non-compliant. The clear message was to address the error.
  • CMS and the COBC reminded the RRE’s that claim records are NOT to be submitted until claim responsibility is established. While the claim is under investigation, no submission should occur.The responsibility to report a workers’ compensation, liability or no fault claim only arises where there is a Medicare beneficiary and either the RRE has assumed responsibility for payment of medical benefits or a TPOC event occurs. Absent those two events no information should be reported on the claim input file.
    The one caveat to the above directive occurs in conjunction with the requirement in certain states (TX and MI were examples) that the entity must pay while investigating claims or during claim appeal. In these situations or ORM, the claim needs to be reported.
  • CMS explained that in situations where ongoing responsibility for medical benefits will continue for a term of months or years following a TPOC event, Medicare expects a subsequent notice of ORM termination to be provided at the time of the ORM termination. CMS will not allow RREs to report ORM terminations that are, for instance, one to two years into the future. RREs must report both the TPOC event and the ORM termination date when they occur, independently.
  • Improper reporting of TPOC amount in Liability settlements – In liability cases where several insurers are individually responsible for payment, the following directive was given. If there are separate settlements, only report the amount of your settlement. In cases where there is joint and several liability, each RRE must report the full TPOC amount.
  • Beginning January, 2012, RRE’s will receive emails asking each to confirm the accuracy of the RRE’s profile information in order to renew. Emails will be sent both the authorized representative and to the account manager. The representative must contact the EDI representative to confirm accuracy, or to update the profile. The authorized representative will also need to sign and submit newly assigned profile. If not signed, the RRE’s EDI application might be revoked (If the authorized representative is no longer with company, account manager should get email and can respond). RRE’s should expect this and should let their EDI representative know if either or both leave the company.
    Those were the primary issues discussed during the teleconference, with many questions surrounding the improper denial of Medicare coverage. The next Town Hall Teleconference will occur on Wednesday December 14th, and that call will focus on both policy matters.

For more information on SCHIP 111 , please contact Tower MSA Partners @ 888.331.4941 or email your questions to info@towermsa.com.

Top 10 Drugs Prescribed For Workers’ Compensation Claims

November 21, 2011

A recent study by NCCI Holdings, Inc. reports the top 10 most popular drugs prescribed for workers’ compensation claims.

1. OXYCONTIN®
2. LIDODERM®
3. HYDROCODONE-ACETAMINOPHEN
4. LYRICA®
5. CELEBREX®
6. GABAPENTIN
7. SKELAXIN®
8. CYMBALTA®
9. MELOXICAM
10. CYCLOBENZAPRINE HCL

Workers compensation medical costs per claim average more than $6,000 and soar to nearly $25,000 for lost-time claims. The report examined workers compensation prescription drug (Rx) use, a medical expense that makes up 19% of all workers compensation (WC) medical costs.

Other key findings of the report on drugs prescribed for workers’ compensation were:

• The indicated Rx share of total medical is 19%; this is slightly higher than the estimate given in the 2010 update
• OxyContin® climbs from the number 3 WC drug in Service Year 2008 to number 1 in Service Year 2009
• Hydrocodone-Acetaminophen drops from the top WC drug in Service Year 2008 to number 3 in Service Year 2009
• Recent overall cost increases are driven more by utilization increases than by price increases
• Physician dispensing continues to increase in Service Year 2009 in almost every state
• Increased physician dispensing is associated with increased drug costs per claim
• Per-claim Rx costs vary significantly by state

Medicare Set-Asides and Third-Party Liability

November 11, 2011

The following legal judgements relate to Medicare Set-Asides and Third-Party Liability

Hinsinger v. Showboat Atlantic City, 420 N.J. Super. 15, 18 A.3d 229 (N.J. Super Ct. Law Div. 2011)

In Hinsinger, the New Jersey court applied the same standard to Medicare set asides created with money obtained from third-party liability claims as it does with money obtained from workers’ compensation claims.  This rationale is premised based on the long understood policy of protecting Medicare’s interests from primary payers.

Based on a personal injury action, the parties to this case reached a settlement agreement in the amount of $600,000.00.  The claimant had become a Medicare beneficiary in 2009.  In order to protect Medicare’s interests, $180,600.00 of the $600,000.00 was allocated to a Medicare set aside account.  After this settlement was reached, the claimant’s attorney filed a petition to recover his attorney fees from the Medicare set aside account.  The trial court held that the attorney could deduct his fees from the Medicare set aside account.

The first issue was whether the same standard should apply to MSA’s created with money from third-party liability cases and MSA’s created from workers’ compensation claims.  The court held that the attorney was able to deduct his fees from the Medicare Set Aside Trust by applying the same standard as a workers’ compensation Medicare Set Aside

The second issue was whether the attorney’s fees could be deducted from the Medicare set aside account.  The court explained that the amount of money deducted from the Medicare set aside account for procurement costs was computed using the ration of the procurement costs to the total settlement or judgment.  The court in this case stated that 42 C.F.R. § 411.37 (2008) was applicable and since the ratio of procurement costs to the total settlement of $600,000.00 was 32.778%, that ratio was applied to the amount of money allocated for the procurement costs.

The court went as far as stating that “the Center for Medicare and Medicaid Services has stated multiple times that the same statutes that necessitate or otherwise apply to Medicare set asides in workers’ compensation cases apply to third-party liability situations.” Once the court determined that parties to a third-party liability action needed to consider Medicare’s interest, the court then applied the workers’ compensation
standard to arrive at the their conclusion that attorneys’ fees incurred to procure a settlement may be deducted from the money allocated to a Medicare set aside.

Zaleppa v. Siewell, 208, 9 A.3d 632 (Pa. Super. 2010)

In Zaleppa v. Siewell, a 69 year old woman was injured in a car accident and
subsequently obtained a judgment in the amount of $15,000.00 against the driver
who hit her vehicle.  The jury determined that $5,000.00 of the $15,000.00 would be allocated to provide for future medical expenses associated with her injuries.  Defendant filed a motion requesting the court to name Medicare as the payee of the $5,000.00 to ensure that Medicare would recover conditional payments. The trial court denied Defendant’s requested relief.

On appeal, the court noted that there was no evidence presented to show that Medicare had even paid any conditional payments to the Plaintiff and that the Medicare Secondary Payer Act bars private entities from essentially asserting the interests of the government by insisting that Medicare be named as payee on the settlement check.

 

Schexnayder v. Scottsdale Insurance Co., 2011 U.S. Dist. LEXIS 83687 (W.D.la. July 28, 2011)

This case involved both a workers’ compensation claim as well as a third-party liability claim.

In Schexnayder, plaintiff was injured in an automobile accident while working.  Settlement was reached in both the plaintiff’s workers’ compensation action and liability action.  The liability settlement provided a Medicare set aside allocation in order to protect Medicare’s interest under the Medicare Secondary Payer Act.  CMS approval was
sought but was however, advised that the proposed Medicare set aside would not
be reviewed or approved in the not too distant future.  The reason for that response from CMS was neither due to the fact that the plaintiff was not a Medicare beneficiary nor
within 30 months of qualifying for Medicare.

The court stated that Medicare does not currently require or approve Medicare set asides when personal injury lawsuits settle, nor do they have a current policy or procedure in effect regarding the adequacy of future medical expenses set aside in liability cases.

The court held that the amount of money allocated to future medical expenses (as evidenced in the settlement agreement), reasonably accounted for Medicare’s interest.

Related: Liability Settlement Solutions