I hope you, your family and coworkers are safe and, like all of us, learning to adjust to a new personal and work environment in this worldwide effort to control the spread of coronavirus.  We realize that Medicare Secondary Payer compliance is not the most important matter in life right now, even for Tower which normally lives and breathes MSAs and conditional payments. 

Tower realizes that people continue to work, some remotely for the first time.  This work transition itself presents unique challenges and uncertainties let alone the changes to our personal lives.

We are here to help.  When the need arises, Tower will be there for you, promptly and securely with the care, concern and expertise we apply to every customer matter (Please see below regarding our secure referral process).

Please keep safe.

Sincerely,

Rita Wilson
Chief Executive Officer
Tower MSA Partners

Secure electronic referrals: If you previously mailed referrals or referral documentation to Tower, but cannot do so as you are now working remotely, referrals and the transmittal of documentation can be made through our TowerConnect Portal. Please contact us at (888) 331-4941 or referrals@towermsa.com and we will provide you a username and password to log in to the portal. You can also make referral here and we will send you a username and password.

Once you log in to the TowerConnect Portal, you will be directed to enter a phone number to receive a code via SMS or phone call for verification. Additionally, you can download Duo Mobile to your phone to allow you to receive a “push” notification to easily authenticate. You can register your device to allow for the Duo push. More information is available here: https://guide.duo.com/enrollment. Your device can be remembered for up to 7 days.

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 Daniel.anders@towermsa.com or (888) 331-4941 with questions.

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.

Background

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 Daniel.anders@towermsa.com or (888) 331-4941 with comments or questions.

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 daniel.anders@towermsa.com or (888) 331-4941 with any questions.

Obtaining CMS recognition of state statutory limitations on medical care in order to limit the MSA allocation has always proven difficult, but not impossible.  As those who have Georgia WC claims know, since July 1, 2013, the state limits medical care in non-catastrophic comp claims to 400 weeks from the date of injury.  While this is old news, payers may not recognize the statute’s potential impact on MSAs. If certain conditions are met, CMS will agree to limit the MSA based upon the 400-week limitation.  

The CMS WCMSA Reference Guide says the following in regard to limitations such as Georgia’s:

Submitters requesting alteration to pricing based upon state-legislated time limits must be able to show by finding from a court of competent jurisdiction, or appropriate state entity as assigned by law, that the specific WCMSA proposal does not meet the state’s list of exemptions to the legislative mandate.

Accordingly, parties who wish to have the MSA limited based upon this statutory provision must draft and obtain the judge’s approval on an order which:

• Identifies the specific injuries arising from the work accident.

• States the claimant’s injuries arising from the accident have not been designated as catastrophic under the statute.

• Confirms the claimant is entitled to no medical treatment beyond the 400 weeks from the date of accident.

• Confirms the claim does not meet any of the exceptions found in the statute, i.e. use of a spinal cord stimulator.

If such an order is submitted with the MSA, CMS will agree to limiting the allocation to the approximate balance of years remaining on the 400 weeks.

Case Study

A Georgia claim was referred to Tower for MSA preparation. Both the claimant’s actual and rated age were 66, which normally calls for an MSA allocated over 19 years.  The MSA allocated over 19 years would have been $69,286.  However, the MSA approved by CMS and allocated over six years was $24,161.  This result was obtained by sending the MSA submission along with a court order from the Georgia Workers’ Compensation Board that confirmed the 400-week limitation applied in this case.

Practical Implications

Obtaining these court orders requires cooperation between attorneys for employer/insurer and claimant as well as the judge.  When such cooperation is possible, as demonstrated by the case study, the MSA can be allocated pursuant to state statute.  CMS approval of the limited MSA then gives claimant assurance that if the funds prove insufficient–which may be the case given it is not funded over life expectancy–then Medicare will pay for future injury-related medical care. 

If you have any questions please contact Tower’s Chief Compliance Officer, Dan Anders, Esq., at Daniel.anders@towermsa.com

As we come to the end of 2019, put on your party hats, toot your horns and clink your champagne glasses, as we introduce Tower’s MSP Compliance Countdown.  The MSP Compliance Countdown provides a quick summary of, in our opinion, the top ten Medicare Secondary Payer compliance stories in 2019.  So, start dropping the MSP compliance ball and here we go: 

10.  Electronic Payment Option Added to MSPRP – On April 1, 2019, the Centers for Medicare and Medicaid Services (CMS) added an option to the Medicare Secondary Payer Recovery Portal (MSPRP) allowing for reimbursement of Medicare conditional payment demands by direct payment from a checking or savings account, debit card or PayPal.  While convenient for Medicare beneficiaries, insurer and employer payers say this does not work with their payment processes. It is our understanding that CMS may consider expanding this option to other payment methods in 2020.

9.  U.S. Attorney Again Takes on Plaintiffs’ Attorneys for Failure to Reimburse Medicare – On March 18, 2019, the U.S. Attorney for the District of Maryland announced a $250,000 settlement agreement with the law firm of Meyers, Rodbell & Rosenbaum, P.A., as a result of allegations the firm failed to reimburse the United States for Medicare payments made to medical providers on behalf of a firm client.  This followed a 2018 action by a U.S. Attorney in Pennsylvania who reached a $28,000 settlement with a plaintiffs’ firm for failing to reimbursement Medicare.  Notably, just last month, the Maryland U.S. Attorney obtained a $90,000 settlement from a plaintiffs’ firm that had referred the case to co-counsel. 

8.  Open Debt Reports Available in the MSPRP – A 2019 update to the MSPRP provides a useful tool for insurer and self-insured entities to identify outstanding or unknown Medicare conditional payment demands.  Called the Open Debt Report, it is available to insurers and self-insured organizations, or as CMS calls them Responsible Reporting Entities (RREs), that have registered for MSPRP access (Tower can also access the reports when it is the Recovery Agent for the RRE). 

7.  Self-Reporting Functionality Added to MSPRP – In January, CMS added a self-reporting function to the MSPRP enabling MSP cases to be reported through the portal versus via phone or written correspondence to the Benefits Coordination & Recovery Center (BCRC).  Primarily a time-saving measure, it is a welcome improvement over having to speak to a BCRC representative who takes down the claim information and enters it into their system.

6.  Update to CMS WCMSA Reference Guide Clarifies Lyrica Policy – Throughout 2018, CMS increasingly added Lyrica (brand-name only at the time) to MSAs for diagnoses that had previously been considered non-Medicare covered.  In a January update to its reference guide, CMS clarified its reasoning for considering Lyrica Medicare-covered for radicular pain stemming from the spinal cord (cervical, thoracic and lumbar), even when there is no evidence of what is defined as a “traumatic” spinal cord injury.

5.  CMS Adds Electronic Submission Option for MSA Attestations – On October 7, 2019, CMS released an updated Workers’ Compensation Medicare Set-Aside Portal (WCMSAP) User Guide which added the capability for both self- and professional-MSA administrators to electronically submit annual attestations for CMS-approved MSAs.  Previously, the sole option for an MSA administrator was to complete the attestation form and submit to Medicare’s BCRC via mail. Electronic submission of annual attestations benefits both CMS and MSA administrators as it facilitates better and faster coordination of benefits. 

4.  Proposed Rules on LMSAs and Section 111 Penalties Again Delayed – The wait continues for CMS to issue proposed rules on Liability MSAs (LMSAs) and Section 111 Mandatory Insurer Reporting penalties.  CMS’s first notice in December 2018 indicated the proposed rules would be issued in September 2019.  Subsequent notices moved the date to October 2019 and we now have notices moving the date for issuing the proposed rule on penalties to December 2019 (no rule have been released as of the date this article was published) and for rules on LMSAs to February 2020.

3.  Lyrica Goes Generic – In July 2019, the FDA approved multiple applications for generic Lyrica.  While not directly related to MSP compliance, this action has a notable impact on MSA allocation amount given the above-noted use of Lyrica for neuropathic back pain.  Lyrica went from $9.36 for a 50 mg pill at brand name to $0.90 today for the generic, effectively removing it as a significant cost-driver in the MSA.

2.  CMS Expands MSA Amended Reviews & Modifies Consents to Release in Updated Reference Guide – In October 2019, CMS released an updated WCMSA Reference Guide which expanded the Amended Review MSA lookback from four to six years post the prior MSA approval.  It also introduced some additional language to the Consent to Release form which requires the claimant to initial that the WCMSA was explained to him or her and that he or she approves of the contents of the MSA submission.  While the expansion of the Amended Review MSA is welcome news, the revised Consent to Release form, which becomes effective 4/1/2020, may cause delay in the MSA submission process.

1.  U.S. Appellate Court Holds Guaranty Fund Not a Primary Plan under the MSP Act – In an October 10, 2019 decision from the U.S. Court of Appeals for the Ninth Circuit, the California Insurance Guarantee Association (CIGA) was found not to be a primary plan under the Medicare Secondary Payer (MSP) Act.  The result of this decision, if not reversed on appeal, is that CIGA would have no responsibility to reimburse Medicare for conditional payments or to allocate funds in a Medicare Set-Aside (MSA) for future medical.

We chose the CIGA decision as #1 in our countdown because it stands for the principle that we should not readily accept everything CMS says as gospel.  While CMS rightly works to protect the Medicare trust fund, it should be challenged when it goes beyond its statutory and regulatory authority or does not even follow its own MSA review policy.

Every day Tower challenges CMS, whether it is the result of overinclusive Medicare conditional payments or unnecessary or mispriced medical care allocated in an MSA.  Notably, this year Tower repeatedly challenged CMS’s inclusion of urine drug screens in MSAs where there was no past history of use.  The result, CMS corrected its policy, saving employers and carriers tens of thousands of dollars.

If we can leave you with one New Year’s resolution, it is to not be afraid of challenging CMS, when warranted.   Tower will certainly continue to so on your behalf in 2020.

May you have a warm and wonderful holiday and all the best in the new year.