Author: daniel.anders

CMS: Lead Insurer is RRE for Subscription Insurance Policy Section 111 Reporting

April 26, 2023

CMS User Guides for Section 111 Reporting. open book with colored page markers.

In an update to its Section 111 MSP Mandatory Reporting User Guide (Version 7.1 Chapter III Policy Guidance) CMS made clear that in a subscription insurance policy arrangement, the lead insurer is solely responsible for Section 111 mandatory reporting requirements.

The new section of the guide, Section 6.1.13 states:

In a subscription insurance policy arrangement, two or more insurers enter into an agreement whereby the risk of the insurance policy is spread among the various insurance entities in some agreed-upon ratio. In such arrangements, a lead insurer is designated for various administrative and business purposes. While there may be many co-insurers on a subscription insurance policy, there is only one lead insurer, and that lead insurer remains so throughout the policy life cycle.

 Due to the nature of the subscription insurance market and the way such policies are structured, it is appropriate for the lead insurer to act as the sole RRE as it relates to Section 111 mandatory reporting requirements. The ability for the lead insurer to act as the sole RRE is predicated on the assumption that the lead insurer will avail themselves of all rights, requirements, and responsibilities codified in statute and further set out in regulation and within this and any other sub-regulatory guidance provided by CMS, as is from time to time amended. In any such lead reporting situation, as it relates to subscription insurance policies, CMS will assume that the lead insurer, as the sole RRE, will be responsible for all applicable reporting, recovery, and benefits coordination requirements that presently exist, regardless of the existence of any other co-insurer that may enter into a subscription arrangement or similar contract with the lead insurer.

Practical Implications

With subscription insurance policies, risk is divided among two or more policies. It can be an equal split, or one company assumes more risk than another as long as the combined coverage equals 100% of the required limits.  In these arrangements, one insurer takes the lead as administrator.

Based on this policy announcement, only the lead insurer is required to complete Section 111 reporting as the sole RRE.  Other insurers are released from reporting responsibilities.

Please get in touch with Dan Anders, Chief Compliance Officer, at daniel.anders@towermsa.com or 888.331.4941 with any questions.

CMS Extends Deadline for Publication of Final Section 111 Penalties Rule

February 20, 2023

Picture of stamps reading rules, regulations, Section 111 Penalties.

There was much expectation that the Centers for Medicare and Medicaid Services (CMS) would meet the February 18, 2023 deadline to release a final rule on Section 111 reporting civil money penalties (CMPs). However, it was not to be.  CMS extended its deadline for publishing the final rule by a year to February 18, 2024.

Recall that the purpose of the rule is to set out specific criteria for when CMS may impose penalties for what it considers a failure to report or improper reporting.  A summary of the proposed rule can be found here.

In the notice, CMS explains the reason for the extension:

. . . We are not able to meet the initial targeted 3-year timeline for publication due to delays related to the need for additional, time-consuming data analysis resulting from public inquiry. It was not possible to conclude this data analysis on the initial, targeted timeline for the proposed rule because public listening sessions raised additional concerns that CMS believed were important to properly and thoroughly research prior to publishing the final rule. We have decided that it is critical to conduct additional analysis about the economic impact of the rule. We are preparing additional data analysis and predictive modeling to better understand the economic impact of the proposed rule across different insurer types. This data analysis is designed to review the actual current reporting and model potential penalties that would be imposed were the final rule in place. Along with delays resulting from the agency’s focus on the COVID- 19 public health emergency, we determined that additional time is needed to address the complex policy and operational issues that were raised. We are extending the publication deadline so as to provide the most accurate, complete, and robust data possible to confirm the intent and economic impact of the final rule.

Practical Implications

Besides not having to worry about penalties for another year, we are pleased CMS is taking the time to complete a data analysis of the impact of its penalty regulation.  While in its initial regulatory announcement, CMS indicated its rule would not have a significant economic impact, we, as well as others, noted in our comments to the proposed regulation that the authority to impose penalties of up to $1,000 per day per claim could lead to millions of dollars of penalties on even one claim.  This is most definitely a significant economic impact.

As required by law, CMS will eventually make its penalties rule final and issue penalties.  Accordingly, while we await that final rule, you have been granted more time to ensure the accuracy and timeliness of your reporting.

Current Tower Section 111 reporting partners have access to our Section 111 Management Dashboard, which gives you complete visibility into your claims from a global level all the way down to specific claims.  This, along with our standard error reports and consultation on error correction, is the best path forward to eliminate the potential for CMS to impose penalties.

If you do not yet partner with Tower for Section 111 reporting, now is an excellent time to consider the benefits of a platform which seamlessly manages Section 111 reporting, conditional payments, Medicare Set-Aside triage, clinical and legal interventions, MSA preparation, and CMS submission activities.  Don’t hesitate to contact Tower’s Chief Compliance Officer, Dan Anders, at 888.331.4941 or daniel.anders@towermsa.com, with any questions.

Related Articles

Tower MSA Partners Ready to Steer Clients Through Pending Section 111 Civil Money Penalties

WorkCompWire: Plan Now to Avoid Pending Medicare Reporting Penalties

A Claims Professional’s Guide to Common MSP Acronyms and Abbreviations

January 19, 2023

Picture of scrabble tiles that could be put together to create MSP ACRONYMs

People in the MSP compliance business rattle off acronyms and abbreviations, such as AWP, MMSEA, and TPOC like it’s second nature. People immersed in Section 111 reporting and Medicare Set-Asides understand the abbreviations, but most people listening to us do not. So, here’s a quick cheat-sheet (or handy guide) to frequently used acronyms and their meanings:

Common MSP Acronyms and Abbreviations

AWP – Average wholesale price:  The AWP is a Red Book pricing reference for prescription drugs. The lowest AWP is used to calculate Medicare Part D drugs in a Workers’ Compensation Medicare Set-Aside (WCMSA).

BCRC – Benefits Coordination & Recovery Center: This contractor to the Centers for Medicare and Medicaid Services consolidates the activities that support the collection, management, and reporting of other primary insurance coverage for Medicare beneficiaries.  In short, it manages the MMSEA Section 111 reporting program and pursues conditional payment recovery when the claimant Medicare beneficiary is the debtor.

CMS – Centers for Medicare and Medicaid Services:  The federal government agency oversees the Medicare program.  CMS’s Division of MSP Program Operations directly manages CMS’s Medicare Secondary Payer (MSP) enforcement programs.

COB – Coordination of Benefits:  The coordination of benefits (COB) program aims to identify the health benefits available to a Medicare beneficiary and to coordinate the payment process to prevent mistaken payment of Medicare benefits.

CRC – Commercial Repayment Center: This CMS contractor pursues conditional payment recovery when the self-insured entity or the insurer is the identified debtor.

CWF – Common Working File: CMS uses this tool to maintain national Medicare records for individual beneficiaries enrolled in the Medicare program.  For example, a funded CMS-approved workers’ compensation Medicare Set-Aside (WCMSA) will trigger a marker in the CWF, so Medicare will not pay for care covered by the WCMSA.

LMSA – Liability Medicare Set-Aside: General term for an MSA in a liability case settlement.

MBI – Medicare Beneficiary Identifier:  The Medicare Beneficiary Identifier (MBI) is the identification number replaced SSN-based health insurance claim numbers (HICNs) on all Medicare transactions, such as Medicare cards, billing, claim submissions and appeals.

MIR – Mandatory Insurer Reporting:  Another term for MMSEA Section 111 reporting.

MMSEA – Medicare, Medicaid, SCHIP Extension Act of 2007: Section 111 of this act added mandatory reporting requirements regarding Medicare beneficiaries who have coverage under group health plan (GHP) arrangements as well as for Medicare beneficiaries who receive settlements, judgments, awards, or other payment from liability insurance (including self-insurance), no-fault insurance, or workers’ compensation, collectively referred to as Non-Group Health Plan (NGHP) or NGHP insurance.

MSA – Medicare Set-Aside: An account used to pay for injury-related and Medicare-covered medical services and prescription medications. It is a portion of a settlement that is reserved or “set-aside” for this purpose.

MSP – Medicare Secondary Payer: This is the term generally used when the Medicare program does not have primary payment responsibility, that is when another entity, such as workers’ compensation or liability insurance or a group health plan, is responsible for paying before Medicare.

MSPRP – Medicare Secondary Payer Recovery Portal: A web-based tool designed to assist in the resolution of liability insurance, no-fault insurance, and workers’ compensation Medicare recovery cases.

NGHP – Non-Group Health Plan: Typically used in reference to Section 111 reporting, NGHP includes liability insurance (including self-insurance), no-fault insurance, and workers’ compensation.

ORM – Ongoing Responsibility for Medicals:  This refers to the Responsible Reporting Entity (RRE) paying for the injured party/Medicare beneficiary’s ongoing medical treatment associated with the claim.

RO – Regional Office:  A CMS RO is assigned to each WCMSA case (based on the claimant’s state of residence); that RO makes the final determination of the appropriate funding level for the WCMSA.

RRE: Responsible Reporting Entity: The applicable plan, namely the NGHP, responsible for Section 111 reporting to CMS.

SSDI – Social Security Disability Insurance: Pays monthly benefits to workers who can no longer work due to a significant illness or impairment that is expected to last at least a year or result in death within a year.

SSN – Social Security Number: A numerical identifier assigned to U.S. citizens and other residents to track income and determine benefits.

TPOC – Total Payment Obligation to the Claimant: For Section 111 reporting purposes, CMS uses the term TPOC to refer to the dollar amount of the total payment obligation to, or on behalf of, the injured party in connection with the settlement, judgment, award, or other payment in addition to/apart from ORM.

WCMSA – Workers’ Compensation Medicare Set-Aside: This is a financial agreement that allocates a portion of a workers’ compensation settlement to pay for future medical services related to the workers’ compensation injury, illness, or disease.

WCMSAP – Workers’ Compensation Medicare Set-Aside Portal: The WCMSAP may be used to submit and view WCMSA proposals, to communicate about the review approval process, and to submit re-review requests. Users can also view the status and balance of an established WCMSA and submit annual attestations and detailed transaction records.

WCRC – Workers Compensation Review Contractor: This CMS contractor reviews all submitted WCMSAs and advises the CMS Regional Office whether the proposed WCMSA is sufficient, or a higher or lower amount is recommended.

CMS to Provide RREs with Response File on ORM Record Changes

January 11, 2023

book marked by sticky notes illustrating changes Section 111 reporting on ORM

Starting July 2023, Responsible Reporting Entities (RREs) can access updates/changes that another source has made to their claims for Ongoing Responsibility for Medicals (ORM).  The Centers for Medicare and Medicaid Services (CMS) announced this in an update to its MMSEA Section 111 NGHP User Guide, Version 7.0.

It may surprise insurers and self-insurers that the ORM data they report through Section 111 reporting can be modified by the Benefits Coordination and Recovery Center (BCRC), which coordinates benefits on behalf of CMS. For example, suppose a claimant contacts the BCRC and advises that they are being denied medical care due to an open ORM (ORM indicates the RRE accepts the claim). In that case, the BCRC may update the ORM record to indicate that medical has been terminated (especially if the claimant indicates the case has been settled).

The RRE needs to be notified of this action to correct its reporting or to advise the BCRC that this was an erroneous change to the record.

Presently, and in our experience, the BCRC typically issues a letter to the RRE advising of the change it made to the ORM status.  Starting this summer, RREs can also access these changes through Section 111 reporting. The revised user guide states:

Effective July 2023, RREs will be able to opt in via the Section 111 secure website to receive a monthly NGHP Unsolicited Response File. This will provide critical information about updates to ORM records originally submitted in the last 12 months and allow RREs to either update their internal data or contact the Benefits Coordination & Recovery Center (BCRC) for a correction.

This report will provide the source of the record modification and the reason for it. This should eliminate confusion when the BCRC changes ORM reporting data.

Other Updates to Section 111 User Guide

CMS included these other updates in Version 7.0 of the user guide:

  • Sections 6.4.2, 6.4.3 and 6.4.4. of Chapter III: Policy Guidance indicated CMS would maintain the $750 reporting threshold for physical trauma-based liability insurance settlements and the $750 threshold for no-fault insurance and workers’ compensation settlements, where the no-fault insurer or workers’ compensation entity does not otherwise have ongoing responsibility for medicals.
  • In Chapter IV: Technical Information besides the aforementioned ability to, as of July 2023, obtain an NGHP Unsolicited Response File, CMS put in place the following changes:
  • Information on recovery agents was clarified to emphasize that such agents need written authorizations to pursue any post-demand actions (Section 6.3.1).
  • Recovery agents may now view the Open Debt Report on the Medicare Secondary Payer Recovery Portal (MSPRP), if the agent has an active MSPRP account with a TIN matching one submitted on the RRE’s TIN Reference File (Section 6.3.1.2).
  • ORM Termination Date field number 79 was corrected for the Event Table (Section 6.9.1).

As Tower is a recovery agent for many of our clients, the ability to download a copy of the Open Debt Report will be helpful in monitoring CMS’s ongoing recovery actions.

  • Finally, CMS updated Chapter V: Appendices as follows:
  • The CP13 soft edit policy limit amount has decreased from $1000 to $500 (Appendix F).
  • For the TIN Reference File, the Go Paperless Indicator is no longer required when submitting the Recovery Agent TIN (Field 25) (Appendix G).

If you have any questions on these updates, don’t hesitate to contact Tower’s Chief Compliance Officer, Dan Anders, at Daniel.anders@towermsa.com or 888.331.4941.

 

Top 5 MSP Stories of 2022 & What to Watch for in 2023

January 4, 2023

pictures of 2022 & 2023 to showing size difference in 22 & 23 MSP

As we launch into 2023, here’s a look back at the top five Medicare Secondary Payer (MSP) compliance stories of 2022 and what to watch for this year.

Addition of Non-Submit MSA Policy to CMS WCMSA Reference Guide

2022 certainly got off with a bang when CMS added Section 4.3 to the CMS Workers’ Compensation MSA Reference Guide.  Entitled “The Use of Non-CMS-Approved Products to Address Future Medical Care,” the policy, which was later amended (See CMS Clarifies Policy on Non-Submit MSAs in Updated Reference Guide), provides as follows:

  • A non-submit MSA represents a potential cost shift to Medicare.
  • At its sole discretion, CMS may deny payment for injury-related medical up to the total settlement amount less procurement costs and paid conditional payments.
  • If the non-submit MSA exhausts, it must be demonstrated that the MSA was sufficiently allocated at the time of settlement and the funds were spent properly.
  • Shall apply to all notifications of settlement that include the use of a non-CMS-approved product received on, or after January 11, 2022
  • It does not apply to under-threshold MSAs (settlements that do not meet the CMS WCMSA review criteria).

Questions remain.  To what extent will CMS issue denials where a non-submit MSA is used? How will this process work when a non-submit MSA exhausts? What steps will CMS take to determine the sufficiency of the MSA when the claim is settled? And what evidence will CMS require to prove the MSA funds were spent correctly?

Ametros Study Confirms Post-Settlement Medicare Denials Do Occur

The question of whether CMS denies payment for injury-related care was answered, at least for CMS-approved MSAs, in an extensive study Ametros published in January 2022.  This first-of-its-kind study examined a random sample of five percent of the Medicare beneficiary population over a three-year period.  They estimated that the following number of claims were denied because WCMSA funds were responsible for their payment.

  • 35,980 in 2018
  • 36,060 in 2019
  • 30,720 in 2020

The report’s key conclusion is “Medicare is systematically denying MSA recipients’ claims, and with steady frequency.”  You can download the free report “A Study of CMS Policy on Treatment Denials for Injured Workers with a Medicare Set Aside from ametros.com/medicaredenials. 

CMS Releases Key Metrics on WCMSA Review Program

It was not only Ametros that published data related to the MSP program in 2022.  For the first time, CMS released data on its WCMSA review program.

CMS shared statistics for the three-year period of 2020 through 2022.  The data compared proposed MSA amounts with the CMS-recommended amounts (what we typically call the “approved” MSA amounts).

Key takeaways from a review of the three years of data:

  • MSA reviews are down, a 17% decline over three years.
  • Review methodologies remain consistent.
  • The average recommended MSA remains consistently between $80K-$85K.
  • A billion dollars in recommended MSAs every year.

Please see For the First Time, CMS Release Key Metrics on WCMSA Review Program for more takeaways and a link to the data.

CMS Withdraws Proposed Rule on Future Medicals in Liability

In a surprise move, CMS withdrew its proposed rule on future medicals in liability settlements from review by the White House Office of Information and Regulatory Affairs (OIRA review and approval are required before a proposed rule is published). It was anticipated that CMS would release the proposed rule in 2022 for comment, but we did not even get to that step in the regulatory process.

The future of formal CMS guidance for liability settlements remains unknown.  While CMS can resubmit a proposed rule for release, we do not know if it will do so or the timeline if it intends to do so.

Notably, in its recently released solicitation for its next five-year Workers’ Compensation Review Contractor (WCRC) contract, CMS included an option for liability MSAs reviews starting in April 2024.  However, while CMS anticipates 19,200 WC MSA submissions per year, the solicitation indicates an expectation of 1,000 per year in LMSAs (with an option to increase to an additional 3,000 per year).  In short, even were CMS to put some LMSA review process in place it seems they contemplate a high dollar or some other type of threshold to reviews given the lower number expected.

In response to CMS’s lack of guidance, Tower released an updated version of its guidance document, Navigating Through the Fog: Medicare Future Medicals & Liability Settlements.

First Anniversary of PAID Act Implementation

On 12/11/2021, payers, gained access to the past three years of Medicare beneficiary enrollment status in Medicare Part C (known as Medicare Advantage) plans and Part D (prescription drug) plans through the Section 111 reporting data. Previously, workers’ compensation payers were required to reimburse these plans for conditional payments but did not know which plans the Medicare beneficiary used.

The PAID Act did not introduce new requirements for resolving debts with Part C and D plans. However, it does allow payers, in some cases, to more easily identify and contact these plans.  Observations one year out:

  • In terms of the technical aspects of the transmission of PAID Act data, there have been minimal problems.
  • Not all RREs have chosen to accept the PAID Act data into their claims systems (Tower created a dashboard allowing our reporting clients to access PAID Act data without having to ingest it into their claims system).
  • While the enrollment information for Part C and D plans is accurate, the same can’t be said for the contact information. (Note, CMS issued a memo in April 2022 to Part C and D plans asking them to provide contact information which can receive inquiries from Non-Group Health Plans in compliance with the PAID Act.)
  • There has been an increase in Tower clients’ pre-settlement requests to contact Part C and D plans to inquire about reimbursement claims.

What to Watch for in 2023

Section 111 Penalties:  2/18/2023 is the due date for CMS to issue final regulations on criteria for imposing Section 111 penalties for improper mandatory reporting.  We expect issuance before this date with final regulations becoming effective this year.

MSA Review Contractor:  Capitol Bridge, the Workers’ Compensation Review Contractor (WCRC), is in the last year of its five-year contract to review MSAs for CMS.  On 1/4/2023 CMS published the solicitation for a new five-year contract set to begin on 4/1/2023.

The new contract contemplates 19,200 WC MSA submissions with no increase over the contract period.  What to watch for here is whether CMS keeps Capitol Bridge or brings in a new contractor.

Release of More MSP Metrics:  As noted above, we were pleased to see CMS release critical metrics around the MSA review program.  We hope this becomes an annual report and expands with more data around MSA administration post-settlement and conditional payment recovery.

Best wishes from your friends at Tower for a healthy, happy and prosperous new year!

CMS Announces Upcoming Section 111 Webinar / WCMSA Reference Guide Update Released

November 15, 2022

Red Medicare button on a keyboard to illustrate Medicare conditional payment.

The Centers for Medicare and Medicaid Services (CMS) recently published a Section 111 reporting webinar notice and an update to its CMS WCMSA Reference Guide.

CMS Section 111 Reporting Webinar

CMS will hold a Section 111 NGHP Webinar on December 6, 2022, at 1:00 PM ET.  The notice says:

CMS will be hosting a Section 111 NGHP webinar. The format will be opening remarks by CMS, a presentation that will include NGHP reporting best practices and reminders followed by a question and answer session. For questions regarding Section 111 reporting, prior to the webinar, please utilize the Section 111 Resource Mailbox PL110- 173SEC111-comments@cms.hhs.gov.

The webinar notice can be found here.  We encourage anyone involved in the management of Section 111 reporting to tune into it.  Please note that there is no pre-registration; instead, the link and call-in phone numbers are on the notice.  You just log in shortly before the webinar’s start time.

WCMSA Reference Guide Update

The update to CMS’s WCMSA Reference Guide, Version 3.8 provides for changes to the re-review criteria. (Because CMS does not have a formal appeals process after an MSA determination, it allows what are called re-review submissions).  Currently, CMS allows for re-reviews for mathematical errors and missing documentation.  It has now added a section for submission errors which provides:

Submission Error: Where an error exists in the documentation provided for a submission that leads to a change in pricing of no less than $2500.00, a re-review request may be made by submitting updated documents free of errors that caused the original review outcome. Amended documents must come from the originators with appropriate notation to identify that the error was corrected, along with the date of correction and no less than hand-written “wet” signature of the correcting individual. Note: This submission option is only available for approvals from September 1, 2022 forward.

  •  Examples include, but may not be limited to: medical records with incorrect patient identifying information or rated ages where the rated-age assessor provided incorrect information in the rated-age document.

Rather than applying to submitter errors, this addition to the re-review policy appears to account for errors in the documentation that was provided to the submitter, such as a rated age or medical records.

Tower conducts a thorough review of all relevant documentation when the MSA is prepared and submitted.  Consequently, documentation errors are identified and corrected before MSA submission.  As such, we expect to make minimal use of the Submission Error Re-Review.

CMS also added a new section entitled Re-Review Limitations:

16.2 Re-Review Limitations

 Note: The following re-review limitations are only available for approvals from September 1, 2022 forward.

 Re-review shall be limited to no more than one request by type.

 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.

It appears that the long-time policy of unlimited re-reviews has come to an end.  We understand CMS’s statement that a re-review “shall be limited to no more than one request by type” to mean one re-review is allowed for a mathematical error, one for missing documentation, and one for a submission error.

CMS’s intention for stating that a “disagreement surrounding the inclusion or exclusion of specific treatment or medications does not meet the definition of a mathematical error” is not clear.  While perhaps not a math error, when medical records from a treating physician clearly say surgery is no longer recommended or medication has been discontinued but CMS includes such treatment or medication in the MSA, we submit it as an error.

Tower has submitted numerous re-review requests to remove or modify treatment or medication from the MSA based on treating physician statements in the medical records.  Tower has a 68% success rate with re-reviews when CMS previously issued an MSA counter-higher, proof that these are reasonable requests. We hope the addition of Section 16.1 does not signal CMS’s intention to reject these reasonable re-review requests.

If you have any questions, please do not hesitate to contact Dan Anders, Tower’s Chief Compliance Officer, at Daniel.anders@towermsa.com or 888.331.4941.

 

For the First Time, CMS Releases Key Metrics on WCMSA Review Program

November 9, 2022

Person pointing out metrics on a posterboard to measure Medicare Set Aside.

The Centers for Medicare and Medicaid Services (CMS) recently released data that provides insight into its Workers’ Compensation Medicare Set-Aside (WCMSA) reviews.  This is the first time CMS has released such detailed metrics.

CMS shared statistics for a 3-year period of 2020 through 2022 (CMS’s fiscal year ends on Sept. 30). The data compared proposed MSA amounts with the CMS-recommended amounts (what we typically call the “approved” MSA amounts).  The data can be found here.

 MSA reviews are down

In 2020 CMS completed 16,517 reviews and by the FY end of 2022, this had dropped to 13,752 reviews, a 17% decline.

The reason for the decline is up for speculation.  There may have been fewer settlements and thus fewer MSAs during the pandemic. However, NCCI’s data* show that claim frequency only declined by about 1% when 2020 and 2021 are considered together.

Another theory is that the reduction reflects a trend of settling parties choosing not to submit the MSA to CMS for approval.  Whatever the reason, there has been less engagement with the CMS WCMSA review program.

 Review Methodologies Remain Consistent

When CMS disagrees with a proposed MSA amount it issues a counter-higher with an amount it recommends for the MSA allocation.  The data provided by CMS show that the variance between total MSAs proposed versus recommended change was 13% (2020), 15% (2021) and 14% (2022). This consistency of result is because CMS’s WCMSA review methodologies have remained largely the same over the last several years.

Average Recommended MSA Is Steady

The year-over-year data show very little change in the average recommended MSA amount from $84,563.33 in 2020 to $81,571.75 in 2022.

 A Billion Dollars a Year

The CMS data show that the amount the agency consistently recommends for all the MSAs comes to over $1 billion annually.  However, this does not necessarily represent $1 billion in savings to Medicare.  Savings result when the MSA is funded in a settlement and the MSA funds are expended for injury-related medical care that Medicare would otherwise cover.

How Tower’s MSAs Stack Up

The release of these statistics gives us a unique opportunity to compare Tower CMS-approved MSAs against all CMS-approved MSAs.

Average CMS-Approved MSA (2021 numbers):

CMS:  $80,741                                                 Tower:  $54,956

Tower’s CMS-approved MSAs are 32% lower than the CMS average approved MSA

And if we isolate just the prescription drug component of the MSA.

Average CMS-approved Rx Amount in MSA (2021 numbers):

CMS: $20,916                                                  Tower:  $14,079

Tower is 33% lower than the CMS average for the prescription drug component.

These comparisons prove that Tower’s MSA allocation methodology along with our focus on cost mitigation through interventions, such as our Physician Follow-up service, reduce MSA allocations. Simply put, what this means to our partner clients is millions of dollars in savings.  These metrics also show that cost reductions can be obtained, even when payers choose the CMS MSA approval process.

The release of data on CMS programs has been a policy initiative of the National Medicare Secondary Payer Network (MSPN), to which Tower belongs. We are pleased that MSPN’s efforts have resulted in this release.

We also thank CMS for publishing these statistics.  Hopefully, it will become an annual report that includes more metrics on WCMSA reviews, such as the percentage of MSA proposals that are developed for information post-submission. It would also be interesting to learn how many MSAs are funded in a lump sum versus those funded via an annuity. In addition, MSPN is interested in metrics surrounding Section 111 reporting and Medicare conditional payments.

If you have any questions about this report or anything else on MSP compliance or MSAs, please feel free to contact Dan Anders, Chief Compliance Officer, at Daniel.anders@towermsa.com or 888.331.4941.

*See Rabb, W., (2022, May 11). “Claims Frequency Up for 2021, but Workers’ Comp Profitability ‘Unprecedented,’” Insurance Journal.

CMS Withdraws Proposed Rule on Future Medicals in Liability Settlements

October 18, 2022

On October 13, 2022, the Centers for Medicare and Medicaid Services (CMS) withdrew its proposed rule on future medicals in liability settlements from review by the White House Office of Information and Regulatory Affairs (OIRA review and approval is required before a proposed rule is published).

While never published to the public, the proposed rule was expected to provide guidance regarding obligations associated with future medical items in liability cases. It was commonly believed these obligations would include the use of a Liability Medicare Set-Aside (LMSA), similar to MSAs used in workers’ compensation, in certain situations.

What is uncertain now is whether a proposed rule around LMSAs will be reworked and resubmitted to OIRA for consideration soon or whether CMS is closing out regulations around liability settlements and future medicals for the foreseeable future. This is the second time CMS has withdrawn a rule on LMSAs, with the first withdrawn in 2014.

Practical Implications

While the lack of guidance around future medical obligations to CMS may have frustrated parties to liability settlements, these parties could have been even more frustrated if CMS had issued rules. As it is, parties in liability cases continue to have much more discretion in determining how to best consider Medicare’s interests in future medicals at the time of settlement than do parties in workers’ compensation cases.

What should settling parties do, given that no CMS LMSA review policy or process currently exists? Please reference Tower’s “Navigating Through the Fog: Medicare, Future Medicals & Liability Settlements” as a starting point. Of course, always feel free to contact me, Dan Anders, for consultation at Daniel.anders@towermsa.com or 888.331.4941.

Related Posts

Proposed Rules on LMSAs and Section 111 Penalites Again Delayed

CMS Rulemaking Notices Provide Possible Timeline for Criteria on LMSAs and Reporting Penalties

 

Is a CMS-approved $0 MSA Still Possible?

July 26, 2022

Picture of a women holding the # 0 depicting a $0 Medicare Set-Aside

A common question we receive is whether a CMS-approved $0 MSA is still possible.  The answer is, yes– if it meets the criteria.

There are three different ways a $0 MSA can be obtained, each with its own criteria and documentation requirements.

Denied Claim $0 MSA

This is a $0 MSA based on a completely denied workers’ comp claim when no payments have been made for medical treatment or indemnity.  In certain jurisdictions, such as California, some medical payments can have been made during a statutory investigating period. Payments for non-treatment purposes such as IMEs, case management and medical records copies do not impact the ability to obtain a $0 MSA approval.

This type of $0 MSA has significant documentation requirements:

1. Claim Payment History

  • A claim payment history printout, even if blank, representing payments since the inception of the claim. All payments must be itemized.
  • Printout must be divided into categories for medical, indemnity and expenses with subtotals for each category and a grand total listed. This printout needs to include the print or run date.
  • If the claim payment history does not meet the above requirements, then Tower will work with you to identify alternative documentation that meets CMS requirements.

2. Draft or final settlement documents and court orders or rulings or a statement that no such documents exist (see below Financial Detail and Denial Letter). CMS recently added a requirement that there must be a proposed or agreed-to settlement.  Importantly, while CMS requires a proposed settlement, it will reject the $0 MSA if the settlement is finalized, for example with court or commission approval, before CMS’s review and approval of the $0 MSA.

3. First Report of Injury or a statement that no such document exists (See below Financial Detail and Denial Letter).

4. Financial Detail and Denial Letter – At the time of submission Tower will draft a letter for the client to sign that confirms the denial of the claim and any other necessary explanations, such as why no First Report of Injury is available.

5.  Medical Records:  As with a regular MSA, medical records for the past two years must be provided with the submission.

6. CMS Consent to Release form executed by the claimant.

Accepted Claim $0 MSA 

This is a $0 MSA based on medical documentation supporting no further need for injury-related treatment.  In the WCMSA Reference Guide, CMS provides as follows:

The individual’s treating physicians conclude (in writing) that to a reasonable degree of medical certainty the individual will no longer require any Medicare-covered treatments related to the WC injury.

In practice, CMS accepts treating physician statements that say the injury-related treatment has resolved or returned to baseline (when there was a pre-existing condition) and that no further injury-related treatment will be necessary as sufficient to support the $0 MSA.

Keep in mind that CMS will not accept the physician’s statement unless it is consistent with the treatment records/notes.  For example, if the physician states the injury-related has resolved, but treatment notes document ongoing pain to the relevant body part, CMS is unlikely to approve a $0 MSA.  Also, if the injured worker will require a revision or replacement to a body part, e.g., a knee replacement, a $0 MSA will not be approved.

In addition to the physician statement, a claim payment history, medical treatment records and an executed Consent to Release are required.

Judicial Decision $0 MSA

CMS will accept a judicial decision after a hearing on the merits of the case as a basis for a $0 MSA.  This can be on a completely denied claim where the judge upholds the denial of the claim or an accepted claim where the judge finds future medical treatment, if any, is unrelated to the work injury.  The key here is the decision is “on the merits.”  If it in any way looks like an agreement between the parties and the judge just stamped their approval, CMS will not accept it.

In addition to the judicial decision, a claim payment history, medical treatment records and an executed Consent to Release are required.

While there are strict documentation requirements, these $0 MSA approvals remain available for workers’ compensation cases meeting the applicable criteria. Please contact Tower MSA Partners at referrals@towermsa.com or (888) 331-4941 to refer a claim meeting these requirements or for further consultation.

Humana’s Brian Bargender Gives Tips on How to Work with Medicare Part C & D Plans

May 12, 2022

Chalk board with Medicare Part C & D

Attendees of Tower’s Premier Webinar on April 20 received sound advice on how to work with Medicare Part C (Advantage) and D (Drug Benefits) plans. Our guest presenter was Brian Bargender, Consultant, Subrogation and Third-Party Liability with Humana, a nationally recognized expert on these plans.

Bargender noted that these plans have the same rights and responsibilities as original Medicare under the Medicare Secondary Payer (MSP) Act. This means that Part C and D plans must avoid payment for treatment covered by primary payers, such as workers’ compensation or liability. Part C plans take this commitment seriously as they want to prove they are more efficient than original Medicare.

The PAID Act gave primary payers visibility into Medicare beneficiary enrollment status in Parts C and D. Previously, they could only see that an individual was enrolled in Medicare. It was problematic to identify a beneficiary’s plan and resolve conditional payments. The growing popularity of Medicare Advantage plans was making the process more time consuming. Approximately 46% of Medicare beneficiaries use Part C and 75% of the ones on original Medicare have Part D.

Bargender explained the plans’ approach to MSP compliance and touched on Private Cause of Action and Double Damages in the MSP Act. Medicare Advantage plans can obtain double damages from primary payers that refuse to reimburse conditional payments. And primary payers remain liable for repayment until plans are repaid, even if they have already paid the injured worker their settlement.

To make it easier to work with Part C and D plans in light of the PAID Act, Bargender offered these insights and advice:

  • While Section 111 reporting gives primary payers “an” address, it’s not necessarily the address the plan would have chosen. As such, further investigation into the appropriate plan contact may be necessary.
  • Medicare Advantage plans get Section 111 data, but not always in time to act on it. They use it as a back sweep to see if they missed anything.
  • Contact the plans before trying their recovery vendors; they have multiple vendors.
  • Ask for the subrogation or legal departments. Customer service reps at C and D plans are not well versed in Medicare Set-Asides.
  • It’s hard for Medicare Advantage and drug plans to predict and staff for call volume; prepare for delays.
  • The plan may not have the file when payers contact them.
  • It’s good for primary payers to notify the plan(s) when they accept responsibility for the claim, and certainly when they prepare for settlement. The Centers for Medicare and Medicaid Services (CMS) notifies plans later in the process.
  • To minimize calls and delays, provide plans the same information given to CMS for Ongoing Responsibility for Medical (ORM) or Total Payment Obligation to Claimant (TPOC) reporting along with the MSA diagnosis and prescription drug details if they are available.
  • At minimum, plans need this data:
    • Medicare Beneficiary Identifier
    • Name
    • Date of birth
    • Loss/Injury Date
  • Part C and D plans cannot correct errors in the file; these must be done through Section 111 reporting or through the Benefits Coordination and Recovery Center (BCRC).
  • These plans do not track how funds are used or exhausted. They need a letter from CMS to the MSA administrator or beneficiary that says funds were properly exhausted before they can start paying for injury care.

Tower has found Bargender and Humana’s subrogation team to be very helpful. They promptly identify specific reimbursement claim information when the claimant is enrolled in a Humana Medicare Advantage plan. Further, they are open to understanding the liability issues and basis for settlement; this is something not typically found with the Medicare conditional payment recovery contractors.

As Bargender stressed, “proactive beats reactive,” when it comes to resolution of these Part C and D claims. Primary payers must be proactive in using PAID Act data to identify whether a Medicare eligible claimant is enrolled in a MA plan, and, if so, investigate whether the plan is seeking reimbursement for payments it made on the claim.

For our Section 111 reporting clients, Tower has the PAID Act data readily available. Whether you are a reporting or non-reporting client, we can help you contact the Part C and/or D plan to investigate and resolve conditional payments at the time of settlement.

If you have questions or want a link to the recorded webinar, please contact Dan Anders at Daniel.anders@towermsa.com

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The PAID Act: Implementation and Implications for Claims Handling