MSP Compliance Blog

Expert summary, analysis and recommendations on issues impacting Medicare Secondary Payer compliance.

Significant Drop in Meloxicam Price Yields MSA Reductions

Posted on March 11, 2020 by Tower MSA Partners

The price of the non-steroidal anti-inflammatory (NSAID) Meloxicam took a major nosedive from $2.78 per pill to $0.05 per pill for 7.5 mg and $4.25 to $0.05 for 15 mg.  Meloxicam (Brand name: Mobic) is commonly used to treat osteoarthritic pain and is frequently allocated in WC claims and MSAs.  This is the medication’s first price reduction in more than a decade.

Tower Actions

Tower will contact our clients to report any non-CMS-approved MSAs where we identify an allocation for Meloxicam and qualify for a revision.  You can also contact us immediately to determine whether a particular MSA qualifies for a reduction.  Revisions to the MSA can be done now or prior to MSA submission to CMS, if needed. 

Please contact Dan Anders at or (888) 331-4941 with questions.

CMS Issues Proposed Rule for Mandatory Insurer Reporting Penalties

Posted on February 18, 2020 by Tower MSA Partners

On February 18, 2020, the Centers for Medicare and Medicaid Services (CMS) issued a proposed regulation which would specify how and when CMS will calculate and impose what are called civil money penalties (CMPs) when group health plan (GHP) and non-group health plan (NGHP) responsible reporting entities (RREs) fail to meet their Section 111 Medicare Mandatory Insurer Reporting responsibilities.  NGHPs include workers’ compensation (including self-insurance) liability and no-fault insurers.


Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 added requirements for GHPs and NHGPs to report Medicare beneficiary enrollees and claimants to Medicare on a quarterly basis.  NGHPs are specifically required to report acceptance and termination of ongoing responsibility for medical (ORM), if any, and total payment obligation to the claimant (TPOC), a settlement, judgment award or other payment. 

The statute originally called for a mandatory penalty of $1,000 per day per claimant for noncompliance with reporting.  Subsequently, the SMART Act of 2012 made CMPs discretionary for NGHPs, modifying the language to indicate that penalties of up to $1,000 per day per claimant may be imposed. The SMART Act also required CMS to issue regulations prior to imposing CMPs.

CMS’s CMP Regulation Proposal

Situations where CMS may impose penalties:

  • when RREs fail to register and report as required by MSP reporting requirements;
  • when RREs report as required, but report in a manner that exceeds error tolerances established by the Secretary of the Department of Health and Human Services (the Secretary);
  • when RREs contradict the information, the RREs have reported when CMS attempts to recover its payments from these RREs.

CMS further states,

This proposed rule would also establish CMP amounts and circumstances under which CMPs would and would not be imposed.

Failure to report at all

Should it fail to perform the required Section 111 reporting at all within one year of the date a settlement or other payment obligation was established, an NGHP would be subject to a CMP of up to $1,000 for each day of noncompliance for each individual whose information should have been reported. A maximum penalty of $365,000 per individual per year applies. 

RREs responses to conditional payment contradict the information the RREs previously reported

Entities that have performed Section 111 reporting as required, but subsequently provide information that contradicts reported information in response to MSP recovery efforts, would be subject to a CMP based on the number of days that the entity failed to appropriately report updates to beneficiary records. For NGHP entities, the penalty would be up to $1,000 per day of noncompliance, for a maximum penalty of $365,000 (365 days) per individual.

Data reported by RRE in error

If a GHP or NGHP entity has reported, and exceeds any error tolerance(s) threshold established by the Secretary in any 4 out of 8 consecutive reporting periods we propose that the initial and maximum error tolerance threshold would be 20 percent (representing errors that prevent 20

percent or more of the beneficiary records from being processed), with any reduction in that tolerance to be published for notice and comment in advance of implementation. We intend for this tolerance to be applied as an absolute percentage of the records submitted in a given reporting cycle.

CMS goes on to note that it is not just any error, but significant errors, as defined in the Section 111 User Guide, which prevent a file from being accepted. Examples include failure to provide an individual’s last name or valid date of birth, or failure to provide a matching Tax Identification Number.

For NGHPs, penalties would be similar, but on a tiered approach with an initial $250 penalty per day of noncompliance for each individual; it increases each subsequent quarter of noncompliance by $250 per day to a maximum of $1,000 per day (it is standardized to 90 days for a total of up to $90,000 per individual per reporting period).  Penalties reduce by $250 per day for each subsequent quarter of compliance.

Safe harbors from reporting penalties

Penalties will not be imposed if any of the following are true:

  • An NGHP entity reports information within one year of the date of settlement;
  • A reporting entity’s submission complies with the reporting error thresholds; or
  • If an NGHP entity is unable to obtain required reporting information from Medicare beneficiaries document their good faith efforts to obtain the information.

In regard to documenting good faith efforts, all of the following are required:

  • The NGHP has communicated the need for this information to the individual and his or her attorney or other representative and requested the information from the individual and his or her attorney or other representative at least twice by mail and at least once by phone or other means of contact such as electronic mail in the absence of a response to the mailings.
  • The NGHP certifies that it has not received a response in writing, or has received a response in writing that the individual will not provide his or her MBI or SSN (or last 5 digits of his or her SSN).
  • The NGHP has documented its records to reflect its efforts to obtain the MBI or SSN (or the last 5 digits of the SSN) and the reason for the failure to collect this information.
  • The NGHP entity should maintain records of these good faith efforts (such as dates and types of communications with the individual) in order to be produced as mitigating evidence should CMS contemplate the imposition of a CMP. Such records must be maintained for a period of 5 years.

Penalties will be prospective

CMS advised that  it “would evaluate compliance based only upon files submitted by the RRE on or after the effective date of any final rule.”

Statute of limitations

CMS “will apply the 5-year statute of limitations as required by 28 U.S.C. 2462. Under 28 U.S.C. 2462, we may only impose a CMP within 5 years from the date when the noncompliance was identified by CMS.”

Informal notice

CMS advised that it expects to communicate with the RRE on an informal basis through a “pre-notice” process that would allow the RRE the opportunity to present mitigating evidence within 30 calendar days before the imposition of the CMP.

Appeals process

Per CMS:

In broad terms, parties subject to CMP would receive formal written notice at the time penalty is proposed.  The recipient would have the right to request a hearing with an Administrative Law Judge (ALJ) within 60 calendar days of receipt. Any party may appeal the initial decision of the ALJ to the Departmental Appeals Board (DAB) within 30 calendar days. The DAB’s decision becomes binding 60 calendar days following service of the DAB’s decision, absent petition for judicial review.

Comment period

CMS has provided for a 60-day comment period to the proposed regulations with comments due by April 20, 2020.  It is expected that following CMS’s review of the comments a final rule will be issued before the end of the year.

Practical Implications

These proposed regulations make it clear that NGHPs, which have a responsibility to report under the Section 111 Mandatory Insurer Reporting provisions, must do so promptly and accurately.  Failure to meet this obligation will result in significant penalties. 

Where RREs do report and later contradict the reported information in response to a recovery demand, the penalty seems much worse than the offense.  For example, thousands of dollars in penalties could be assessed for what amounts to a conditional payment demand of $2,000.  It was thought the SMART Act changes allowing for more discretion would reduce the $1,000-per-day-per-claimant penalty under these scenarios. However, this proposal leaves little room for forgiveness of the inevitable errors which occur with reporting large amounts of data

When it comes to the data that is actually reported, CMS does allow for some forgiveness.  Penalties will only be imposed for submitting data in error over a certain threshold, currently proposed at 20%, and over a certain time, namely 4 out of 8 reporting periods. 

Significantly, CMS states that it will apply the rule prospectively meaning that it will rely upon data reported post final implementation of the rule to determine whether CMPs will be issued.  In other words, CMS is giving RREs one last chance to register and report data if they have not previously done so and for those RREs who have been reporting, to ensure the accuracy of all past ORM and TPOC reporting.

Through client education and regular communication, Tower makes certain reporting is not only timely, but is also an accurate depiction of current status, both from the standpoint of accepted and denied ICD10 codes, as well as termination of ORM through the ORM Term Date when TPOCs are submitted.  With that being said, we can report only what we receive.  As such, it is critical that claims systems provide an accurate representation and communication of the current status of each claim. 

Tower will continue to consider the implications of the proposed rules and comments in response to these rules.  You are encouraged to submit your own comments to CMS or provide comments to Tower who will in turn provide to CMS.  Please contact Dan Anders at or (888) 331-4941 with comments or questions.

Medicare Covers Acupuncture for Chronic Low Back Pain

Posted on February 6, 2020 by Tower MSA Partners

After needling from the medical community, in a sharply written January 21, 2020 decision memo, the Centers for Medicare and Medicaid Services (CMS) got right to the point in announcing Medicare will now cover acupuncture for chronic low back pain.  The coverage rule provides up to 12 visits in 90 days under the following circumstances:

  • For the purpose of this decision, chronic low back pain (cLBP) is defined as:
    • lasting 12 weeks or longer;
    • nonspecific, in that, it has no identifiable systemic cause (i.e., not associated with metastatic, inflammatory, infectious, etc. disease);
    • not associated with surgery; and
    • not associated with pregnancy.
  • An additional eight sessions will be covered for those patients demonstrating an improvement.  No more than 20 acupuncture treatments may be administered annually.
  • Treatment must be discontinued if the patient is not improving or is regressing.

Acupuncture remains non-Medicare covered for any other condition besides chronic low back pain.

Practical Implications

Acupuncture treatment is fairly low cost, similar or lower than PT, and at a limit of no more than 20 acupuncture treatments annually, its inclusion in an MSA would only result in a moderate increase to the allocation. 

It may have a larger impact on reducing MSA dollars as part of an alternative treatment option to opioid or non-opioid medication use.  As CMS states:

Therefore, we believe that in light of the relative safety of the procedure and the grave consequences of the opioid crisis in the United States,  there is sufficient rationale to provide this nonpharmacologic treatment to appropriate beneficiaries with chronic low back pain. 

Acupuncture is not, on its own, the entire answer to reducing opioid use. However, as part of a comprehensive treatment plan that addresses both the physical and mental effects of chronic low back pain, acupuncture can be a key component.  As such, Medicare coverage of this treatment is certainly welcomed.

Please contact Dan Anders at or (888) 331-4941 with any questions.

How Do You Know Your MSP Compliance Data is Secure?

Posted on January 29, 2020 by Tower MSA Partners

Understanding and Preventing Cybersecurity Threats

February 19, 2 PM ET

Minnesota Hospital Breach Impacts Personal and Medical Data of 50,000 Patients

A Billion Medical Images Exposed, but Doctors Ignore Warnings

Names, Social Security Numbers Exposed in Moss Adams Breach

These headlines ran in just the past 30 days.  How secure is your MSP compliance data? A 2019 report from IBM Security and the Ponemon Institute puts the chance of experiencing a data breach within two years at 29.6%. Are you ready?

But why is a MSP compliance company bringing up data security?  Because as a holder of hundreds of thousands of records with personal identification information (PII) and personal health information (PHI), cybersecurity and protecting client data are central to our business.

Data security responsibility goes from the desk level to the head of IT to the CEO and everyone in between–including your vendors.  Tower is pleased to help you protect your injured workers’ data with this informative webinar How do you know your MSP Compliance Data is Secure? Understanding and Preventing Cybersecurity Threats

Moderated by our Chief Compliance Officer Dan Anders, Esq., a panel of information technology and cybersecurity specialists, Tower’s VP of Information Technology, Jesse Shade, Chris Nyhuis, CEO, Vigilant Technology Solutions and Robert Kolb, President, Premier Mindset, will:

  • Illustrate the threat to organizations of all sizes, through real-life examples and data.
  • Describe the intersection of cybersecurity and MSP compliance.
  • Explain how cybercriminals snatch and use personal data.
  • Propose simple desk level and higher-level systematic measures to prevent data breaches.

Invite your IT professionals and senior leaders to join us.

When you click on the link below to register, you can also submit a question to be answered during the webinar.

Hope you can join us on February 19 at 2 pm ET.

Stay safe,

Dan Anders

Chief Compliance Officer

CMS Introduces Pre-CPNs and Open Debt Reports in Conditional Payment Recovery Process

Posted on January 28, 2020 by Tower MSA Partners

On January 14, 2020 CMS held a Town Hall to discuss common Commercial Repayment Center (CRC) NGHP ORM Recovery topics.  In attendance on the call were various officials from CMS as well as Performant Recovery the CRC contractor.  For the most part, the presentation reiterated well-known Medicare conditional payment processes such as differences between conditional payment letters and notices, responding to demand letters and procedures and timelines to dispute and appeal conditional payments.

The slides and notes from the presentation can be found here.

CMS also introduced and explained Pre-CPN Worksheets and Open Debt Reports which we summarize below:

Pre-CPN Worksheet

A Pre-CPN worksheet contains cases that have been reported through the Section 111 reporting process, but for which the CRC has yet to issue a CPN.  The purpose of this optional worksheet is for the employer or carrier debtor to identify debts which will not be disputed.  Important, it is only accessible to Account Managers for Responsible Reporting Entities (RREs) by contacting the CRC with the entity’s tax identification number and RRE ID. 

It is expected the Pre-CPN worksheet will contain claim numbers and the total amount of the claimed debt, but it is uncertain whether it will itemize conditional payment charges.  Once reviewed, it is returned to the CRC with an indication of what claims will not be disputed.  The CRC then moves forward with issuing the CPN.

Open Debt Reports

The CRC advised that Open Debt Reports are now available in the MSPRP on all cases where the RRE insurer is the debtor and where there is a balance due.  The Open Debt Report is only available to the debtor (the RRE) meaning recovery agents, such as Tower, cannot access the reports.

Open Debt Reports are helpful in confirming not only that the RRE is aware of the debt but that the status of the debt, i.e. on appeal, matches their expectation of the status of the debt with the CRC.  If a debt is unknown or the status does not match what is expected, then it provides an opportunity to contact the CRC and clarify the matter. 

Q&A Session

Following the formal presentation there was a Q & A session which provided the following notable takeaways:

Treasury Department notices: A question asked whether more information, such as a claim number, can be included on Treasury Department collection notices.  CMS advised that as the Treasury Dept. collects for the entire federal government it is difficult for Treasury to add information specific to one government program.

Charges unrelated to the injury:  Another question asked whether any efforts are being made to reduce the number of unrelated charges found on conditional payment letters and notices.  CMS responded that efforts are being made to improve the “grouper” algorithm that searches Medicare billing records to identify charges related to the WC injury.  CMS indicated they have an outside contractor reviewing the methodology.

Statute of limitations on Medicare conditional payment recovery:  CMS responded to a question on the statute of limitations on Medicare conditional payment recovery by stating that the three-year statute of limitations added to the MSP Act by the SMART Act in 2013 does not apply to its administrative recovery efforts, rather it only applies to legal actions taken by the federal government.

Practical Implications

In regard to the Pre-CPN, it should be reiterated that this is optional.  If, as we expect, the worksheet does not itemize conditional payment charges related to the claim, then we are uncertain as to the usefulness of this document. 

Turning to the Open Debt Report, this can be a very useful document in confirming an employer or carrier’s current Medicare debts assuming it is accurate.  However, as a recovery agent for many RREs, we are disappointed that the CRC is only making these reports available to the RRE who registers for access through the MSPRP and not directly providing to the recovery agent for the RRE.

Notably, CMS’s position on the three-year statute of limitations for conditional payment recovery only applying to legal actions and not administrative actions raises uncertainty for both payors and claimants as to exactly how long Medicare has to recover.  Our expectation is that this will ultimately be resolved in the courts.

Finally, we are well aware of conditional payment notices and demands containing numerous charges unrelated to the injury.  Often the entire conditional payment claim by Medicare is unrelated.  We hope efforts by CMS and the CRC with adjusting this so-called grouper algorithm results in less unrelated charges in the future.

If you have any questions about the Town Hall call or the issues addressed above, please contact Dan Anders at or 888.331.4941.

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