On March 18, 2019 the U.S. Attorney for the District of Maryland announced a $250,000 settlement agreement (See Press Release) 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 is the second such action taken by a U.S. Attorney’s office in the past year, with the first being the U.S. Attorney for the Eastern District of Pennsylvania who announced an agreement with a Philadelphia law firm to repay $28,000 in June 2018 (See Tower article: U.S. Attorney Recovers Against Plaintiff Attorney for Failure to Reimburse Medicare).

According to the release from the Maryland U.S. Attorney, “in and prior to 2012 Medicare made conditional payments to healthcare providers to satisfy medical bills for a client of the firm.” In December 2015 the law firm obtained a $1,150,000 medical malpractice settlement on behalf of their client. Medicare was notified of the settlement and demanded repayment of conditional payments made. The U.S. Attorney indicates that the firm refused to pay the debt in full, even when the debt became administratively final.

The U.S. Attorney pursued the law firm for the debt and reached the following settlement agreement:

The firm agreed to pay the United States $250,000 to resolve the Government’s claims.

The firm also agreed to (1) designate a person at the firm responsible for paying Medicare secondary payer debts; (2) train the designated employee to ensure that the firm pays these debts on a timely basis; and (3) review any outstanding debts with the designated employee at least every six months to ensure compliance.

 

Practical Implications

U.S. Attorney Robert K. Hur put it best, saying:

“Attorneys typically receive settlement proceeds for and disburse settlement proceeds to their clients, so they are often in the best position to ensure that Medicare’s conditional payments are repaid. We intend to hold attorneys accountable for failing to make good on their obligations to repay Medicare for its conditional payments.”

Since 2010, insurers and self-insurers have been required to electronically report most liability settlements involving Medicare beneficiary claimants to the Centers for Medicare and Medicaid Services (CMS) as part of the Section 111 Mandatory Insurer Reporting process. Consequently, the days of Medicare not being made aware of a settlement have long since passed. Medicare conditional payments should be investigated prior to settlement and demands for repayment addressed prior to the settlement amount being paid to the plaintiff attorney’s client.

There is an implication in the press release where it indicates “the firm refused to pay the debt in full, even when the debt became administratively final,” that the firm appealed the debt. While we do not know if that is the case here, it is nonetheless an important reminder that there is a five step Medicare conditional payment appeal process with four steps at the administrative level and the fifth step allowing for filing suit in federal court. Each step has a deadline attached to it that must be adhered to or one loses their right to appeal.

Tower MSA Partners has a complete solution to Medicare conditional payment resolution in liability cases, which includes investigation of conditional payments and properly disputing or appealing conditional payment charges determined to be unrelated to the injury. For further consultation on Medicare conditional payment best practices in liability settlements, please contact Dan Anders, Chief Compliance Officer, at 888.331.4941 or daniel.anders@towermsa.com

2019 MSP Compliance issues

Medicare Secondary Payer policies and processes are always in flux, whether CMS tweaks what is included or excluded in the MSA or introduces a new contractor who brings their own take on MSA reviews or Medicare conditional payment recovery. Below we take a look at changes in the past 12 months to MSAs and conditional payments. We also explain Tower’s advocacy initiatives and highlight key benchmarks for MSA approvals over the past year.

Workers’ Compensation Medicare Set-Asides

The big news in the WCMSA world was the introduction of a new WCMSA review contractor, Capitol Bridge, in March 2018. Unlike with prior review contractor changes, turnaround times for MSA review only increased slightly and have generally remained within the 20 business days required under the CMS contract.

Although CMS advised that the contractor change would not involve any policy changes, there were changes to the allocation of care. First, CMS began to include four urine drug screens (UDS) each year when a Schedule II substance, such as Norco, is allocated in the MSA. This applies even when there was no past history of such screens or there was a past history but UDS occurred less frequently (Note, recent CMS MSA approvals reveal CMS may have rescinded this policy). Second, CMS expanded the diagnoses for Lyrica use, Medicare coverage and allocation in the MSA. Since Lyrica is only available in brand-name, this has led to some significant increases to MSA allocations.

Challenging CMS

Tower leaves no stone unturned when identifying opportunities to reduce the MSA during the CMS review and approval process. We have challenged CMS about its inclusion of unwarranted UDS and its expansion of Lyrica coverage in the MSA. In 2018 Tower had a 71% success rate in obtaining partial or full reductions to CMS MSA counter-highers. In one case, Tower successfully challenged the inclusion of a revision total shoulder replacement given the life expectancy, resulting in a reduction of $31,801.

Tower also doesn’t let CMS go on minor, yet unwarranted, MSA increases. In another example, we disputed the increase in post-op PT visits from 24 to 36. CMS agreed and reduced PT visits back down to 24.

Our ability to challenge CMS often comes from having clear and concise medical documentation to support our MSA proposal. Tower’s Physician Follow-Up service obtains statements from treating physicians and other medical providers that document last dates of service, discontinued and ongoing medications and otherwise clarify expectations for future injury-related medical care. Tower provides this service free to our clients for the purpose of expediting the CMS MSA approval process, identifying and implementing MSA cost reductions and avoiding MSA counter-highers.

Medicare Conditional Payments

Performant Recovery became the new Commercial Repayment Center (CRC) contractor in February 2018. The CRC is primarily charged with seeking reimbursement for conditional payments from employers and insurers stemming from liability, workers’ compensation and no-fault claims where ongoing responsibility for medicals has been accepted.

In general, having Performant as the CRC contractor reduced turnaround times to obtain Medicare conditional payment information. While we applaud the quick turnaround time on conditional payment data, the dispute and appeal process has been inconsistent, with some cases falling within a 60-day timeframe, while receiving a determination from the CRC took many months in other cases.

We understand that Performant inherited a backlog of cases from the prior contractor a year ago. However, we would expect that backlog to be resolved by now and that turnaround times for cases being handled would have stabilized.

Tower as an Industry Leader

Tower’s CEO Rita Wilson served as the 2018 president of NAMSAP where she led implementation efforts for a number of strategic initiatives to advance its mission to advocate, collaborate and educate within the MSP industry. Key accomplishments included the release of the industry’s most comprehensive course for MSCC pre-certification, discounted subscription to ODG, the nation’s top resource for clinical guidelines to improve MSA accuracy drive toward evidence-based medicine, and, most importantly, a significant increase in NAMSAP’s influence on CMS’s WCMSA review policies. Here are a few highlights:

• Submitted a formal proposal to CMS with recommendations for use of evidence-based guidelines in its WCMSA review process for MSAs that allocate for long-term use of opioids. CMS has agreed to work with NAMSAP’s evidence-based medicine leadership as it considers changes.
• Submitted recommendations for CMS Liability MSA review process and was invited to engage. CMS in further dialogue.
• Initiated a quarterly conference call with CMS to continue discussion of MSP issues. The first call was Dec. 18, 2018. While CMS’s review of some items continues, NAMSAP was successful in obtaining clarity regarding the inclusion of Lyrica in the MSA, and in aligning the use of urine drug screens (UDS) with current prescribing practices when Class II narcotics are included in the MSA.
• Secured commitments from CMS and its contractors to present at the 2019 annual meeting

The 2019 Board of Directors, which includes me as treasurer and a member of NAMSAP’s Executive Committee, will continue its collaboration with CMS in an effort to further influence CMS’s behavior and to improve the accuracy of the MSA work product.

Tower and You

As we pressed forward to influence CMS and support our industry, Tower also continued its mission to achieve better outcomes for our clients through an improved technology infrastructure that supports better measurement of the key metrics that drive our business.   While WC agrees that pharmacy is a key cost driver in the MSA, few are measuring the inclusion, cost and CMS approval rating for drugs, specifically opioids, in the MSA. Tower has benchmarked these metrics for more than 3 years, and in early 2019, will release a new set of performance reports to our clients to provide benchmarked performance data for these key performance metrics.

As noted many times by our CEO, “You cannot manage/improve what you do not measure” During the past year, we saw:

• CMS Approved MSAs with NO prescription drugs – 64%
• CMS Approved MSAs with NO opioids – 90%
• CMS Full Approval Rating – 77%
• CMS Re-Review Success Rate – 73%
• MSA Cost Savings from Clinical Intervention 61.4%

Employers and carriers have to dissect mega volumes of claims and vendor data – then try to aggregate it into a simple, usable format to gauge their programs’ success. Want to find out your MSA numbers? We will help you understand the metrics you need to optimize your MSP compliance and MSA programs – call Dan Anders at (888) 331-4941.

 

Michael Stack, CEO of AMAXX and publisher of the Reduce Your Workers Comp blog, has authored another exceptional article, Steps to Optimize Medicare Set Asides Before — and After — Settlement, which, among other topics, provides key indicators of an effective MSA partner and details the importance of clinical intervention to addressing MSA cost-drivers.

Michael is a recognized thought-leader on improving the management of workers’ compensation claims and driving better outcomes. We encourage anyone interested in improving their MSA outcomes to read Michael’s straightforward analysis and his easy to implement recommendations.

Tower MSA Partners can help you define, measure and manage the metrics that yield the best balance of care, cost and compliance to continuously improve your MSA outcomes. For more on our data-driven philosophy, see Tower CEO Rita Wilson’s article, What Gets Measured Gets Managed . . . What’s Your Number?

For questions, or to learn more about Tower’s MSP compliance solutions, please email us at info@towermsa.com or call us directly at 888.331.4941.

In the recently released updated WCMSA Reference Guide (See Version 2.9, January 4, 2019), CMS provides both notable and minor changes to its policies and procedures surrounding its review of workers’ compensation MSAs. Significantly, CMS clarifies its reasoning behind expanded inclusion of Lyrica in MSAs and, through a policy statement and examples, warns settling parties of the necessity of protecting Medicare’s interests in future medicals. We review the highlights from the updated reference guide and add our assessment of the practical implications of these changes.

 

Protection of Medicare’s Interests

 

CMS added the following statement to Section 4.2 Indications that Medicare’s Interests are Protected:

CMS’ voluntary, yet recommended, WCMSA amount review process is the only process that offers both Medicare beneficiaries and Workers’ Compensation entities finality, with respect to obligations for medical care required after a settlement, judgment, award, or other payment occurs. When CMS reviews and approves a proposed WCMSA amount, CMS stands behind that amount. Without CMS’ approval, Medicare may deny related medical claims, or pursue recovery for related medical claims that Medicare paid up to the full amount of the settlement, judgment, award, or other payment. 

Further, in an effort to clarify expectations for protecting Medicare’s interests in under threshold situations, CMS added the following to Section 8.1 Review Thresholds:

Example 1: A recent retiree aged 67 and eligible for Medicare benefits under Parts A, B, and D files a WC claim against their former employer for the back injury sustained shortly before retirement that requires future medical care. The claim is offered settlement for a total of $17,000.00. However, this retiree will require the use of an anti-inflammatory drug for the balance of their life. The settling parties must consider CMS’ future interests even though the case would not be eligible for review. Failure to do so could leave settling parties subject to future recoveries for payments related to the injury up to the total value of the settlement ($17,000.00). 

Example 2: A 47 year old steelworker breaks their ankle in such a manner that leaves the individual permanently disabled. As a result, the worker should become eligible for Medicare benefits in the next 30 months based upon eligibility for Social Security Disability benefits. The steelworker is offered a total settlement of $225,000.00, inclusive of future care. Again, there is a likely need for no less than pain management for this future beneficiary. The case would be ineligible for review under the non-CMS-beneficiary standard requiring a case total settlement to be greater than $250,000.00 for review. Not establishing some plan for future care places settling parties at risk for recovery from care related to the WC injury up to the full value of the settlement. 

 

Practical Implications

The CMS WCMSA Reference Guide previously included language emphasizing the need to protect Medicare’s interests when medical is settled in WC cases. With the changes to Section 4.2 and 8.1 we have another shot across the bow warning of the consequences of not protecting Medicare in settlement. These updates appear directed toward those settling cases above the CMS MSA review thresholds, but not submitting their MSAs to CMS for approval, and those settling cases under CMS MSA review thresholds and either not including an MSA or including, what CMS may deem, an underfunded MSA.

Do these warnings signal increased enforcement by CMS in this area? We are not aware of CMS routinely denying payment for injury related medical care where the settling parties have not submitted an MSA to CMS for review and approval.   Neither are we aware of instances where CMS is seeking to recover from settling parties for Medicare payments for post-settlement injury-related medical care where no MSA was submitted for approval. This is not to say CMS couldn’t take such action in the future, but is an observation based upon 15 years of experience with the CMS WCMSA review process and CMS’s enforcement efforts. Accordingly, whether to submit an MSA to CMS when the review thresholds are met or to include an MSA on an under threshold case remains a risk management decision for the settling parties.

 

Spinal Cord Stimulator Pricing

Modifications were made to Section 9.4.5 Medical Review Guidelines as they pertain to the pricing of Spinal Cord Stimulators (SCS). Notably, CMS advised that if the type of SCS implanted or recommended to be implanted is unknown, then it will default to pricing a non-rechargeable single array SCS versus a rechargeable SCS.

 

Practical Implications

CMS’s statement regarding defaulting to a non-rechargeable SCS when the type implanted or recommended to be mplanted is unknown has been CMS policy for quite some time, just not included as policy in the reference guide. Why is this important? Because CMS policy is to include a revision for a non-rechargeable SCS every seven years while a rechargeable is included every nine years. Consequently, depending upon the life expectancy used in the MSA, defaulting to a non-rechargeable SCS can add a significant cost to the MSA. We are disappointed CMS continues with this policy as our experience has shown a significant majority of implanted SCS are rechargeable versus non-rechargeable.

 

Inclusion of Lyrica

Last October Tower advised of our concern regarding the increased inclusion of Lyrica in MSAs by CMS (See Apparent Change in CMS Policy Expands Inclusion of Lyrica in MSAs). The apparent is now reality with CMS adding the following to Section 9.4.6.2 Pharmacy Guidelines and Conditions:

Example 1: Lyrica (Pregabalin) is cited in MicroMedEx for an off-label medication use related to neuropathic pain from spinal cord injury, and a number of scientific studies indicate that Pregabalin shows statistically significant positive results for the treatment of radicular pain (a type of neuropathic pain). Spinal cord neuropathy includes injuries directly to the spinal cord or its supporting structures causing nerve impingement that results in neuropathic pain. Lyrica is considered acceptable for pricing as a treatment for WCMSAs that include diagnoses related to radiculopathy because radiculopathy is a type of neuropathy related to peripheral nerve impingement caused by injury to the supporting structures of the spinal cord.

 

Practical Implications

Tower’s interpretation of this statement is CMS will allocate Lyrica in the MSA when there is evidence of 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. What remains unclear is whether CMS considers nerve pain resulting from an injury outside if the spinal cord, i.e. hands or feet, to be a basis for inclusion of Lyrica in the MSA.

Lyrica is not available in a generic form which can result in a significant cost when added to the MSA. While Pfizer’s patent is set to expire on 6/30/2019, it can still take some time after expiration for a generic to come on the market and even then, the generic may not represent a significant cost reduction from the brand name. Accordingly, alternatives to Lyrica should be considered prior to submitting an MSA to CMS for approval.

 

MSA Administration

Added to Section 18.0 CMS’ Monitoring is the following:

Additionally, the contractor must ensure that Medicare makes no payments related to the WC injury until the WCMSA has been used up. This is accomplished by placing an electronic marker in CMS’ systems used to pay or deny claims. That marker is removed once the beneficiary can demonstrate the appropriate exhaustion of an amount equal to the WCMSA plus any accrued interest from the account. For those with structured settlements, the marker is removed in any period where the beneficiary exhausts their available funds; however, it is replaced once the anniversary fund deposit occurs until the entire value of the WCMSA is demonstrated as entirely exhausted. 

 

Practical Implications

This addition emphasizes the technical aspect of CMS’s monitoring of spend from the MSA, whether self or professionally administered. CMS is emphasizing that when an approved MSA is in place it will deny payment for injury-related medical care until such time as the MSA is temporarily or permanently exhausted. Indeed, Tower is aware that CMS has initiated stepped up efforts at monitoring MSA spend and this statement is consistent with that effort.

 

CMS Memorandum

Finally, CMS removed the CMS Memorandum dating back to July 2001 from Appendix 4 WCRC Proposal Review Reference Tools. Also removed from the Reference Guide were most references to prior CMS memorandum.

 

Practical Implications

As CMS states in Section 1.0 of the Reference Guide, “The intent of this reference guide is to consolidate and supplant all historical memoranda in a single point of reference. Please discontinue the reference of prior documents.” As such, removal of the CMS memorandums issued since 2001 is a natural consequence of the Reference Guide becoming the official guidance document for all matters pertaining to CMS review of WCMSAs.

Overall, the WCMSA Reference Guide update confirms policies or practices which have previously been implemented by CMS. We appreciate CMS’s efforts at informing the MSA submitter community of these changes and continue to encourage CMS management to provide such transparency with future modifications to its program.

Please contact Dan Anders at Daniel.anders@towermsa.com or (888) 331-4941 with any questions.

 

This past week the Office of Management and Budget posted two rulemaking notices from the Centers for Medicare and Medicaid Services (CMS), one with implications for the consideration of future medicals in liability settlements and the other regarding criteria for imposing penalties under the Medicare Secondary Payer Act related to the Section 111 Mandatory Insurer Reporting requirements.

 

Liability and Future Medicals

The first notice titled Miscellaneous Medicare Secondary Payer Clarifications and Updates (CMS-6047-P), states as follows:

This proposed rule would ensure that beneficiaries are making the best health care choices possible by providing them and their representatives with the opportunity to select an option for meeting future medical obligations that fits their individual circumstances, while also protecting the Medicare Trust Fund. Currently, Medicare does not provide its beneficiaries with guidance to help them make choices regarding their future medical care expenses when they receive automobile and liability insurance (including self-insurance), no fault insurance, and workers’ compensation settlements, judgments, awards, or payments, and need to satisfy their Medicare Secondary Payer (MSP) obligations.

A timetable is given which provides for a Notice of Proposed Rulemaking to be issued by September 2019.   While no-fault insurance and worker’s compensation is mentioned in the notice, it is expected that any eventual rule regarding Medicare Set-Asides will be primarily applicable to liability.

CMS has gone down this road before, having issued an Advanced Notice of Proposed Rulemaking in 2012 which provided proposed options for considering Medicare’s interests in liability settlements. CMS ultimately withdrew its proposal, but in June 2016 announced that it was again considering expanding the WCMSA review process to liability. Notably, CMS included a provision in the contract with the new Workers’ Compensation Review Contractor for an expansion of reviews to liability. However, no such expansion can occur into there are rules and a policy in place to review what would be effectively Liability MSAs.

In regard to those rules, we are somewhat surprised by CMS proceeding the regulatory route. It was our expectation that CMS would follow a similar course as they have done with workers’ compensation, namely a voluntary review process in which a policy has been laid out through a series of CMS memos which culminated in a CMS WCMSA Reference Guide. CMS has either decided to proceed with the regulatory route for a policy pertaining to liability and future medical or they are keeping their options open.

Given the September 2019 date to have a NPRM issued, this signals that a final regulation would not even be in place until at least 2020. And as we have seen before (See below regarding regulations on penalties), the regulatory process can take many years.

 

Mandatory Reporting Penalties

The second notice issued by CMS through the OMB is titled Civil Money Penalties and Medicare Secondary Payer Reporting Requirements (CMS-6061-P) and states as follows:

Section 516 of the Medicare Access and CHIP Reauthorization Act of 2015 amended the Social Security Act (the Act) by repealing certain duplicative Medicare Secondary Payer reporting requirements. This rule would propose to remove obsolete Civil Money Penalty (CMP) regulations associated with this repeal. The rule would also propose to replace those obsolete regulations by soliciting public comment on proposed criteria and practices for which CMPs would and would not be imposed under the Act, as amended by Section 203 of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act).

While the verbiage in this notice is somewhat confusing, what this refers to is CMS is planning to issue a formal document requesting comments and proposed criteria for when CMS would impose what are called Civil Money Penalties (CMPs) for improper reporting or a failure to report under the Medicare Secondary Payer Act. As many will recall, the inducement for workers’ compensation, liability and no-fault carriers and plans to abide by the Section 111 Mandatory Insurer Reporting provisions was the possibility of a $1,000 per day, per claim penalty contained in the statute. However, since the start of mandatory reporting in 2010, no penalties have been issued.

Part of the reason penalties have yet to be issued is because the SMART Act of 2012 required CMS to issue regulations detailing the criteria for imposing penalties before CMS could take such action against what we know as Responsible Reporting Entities (RREs). In December 2013 CMS did issue an Advanced Notice of Proposed Rulemaking (ANPRM) to solicit comments and proposals for criteria under which Civil Monetary Penalties would be imposed under the reporting provisions of the MSP Act. A 60-day period was provided for stakeholders to provide comment to CMS. It was assumed that following this response period the regulatory process would move forward with a final regulation on the imposition of CMPs.

Surprisingly, post the comment period, no further action was taken by CMS. Five years later we now have this notice indicating CMS will once again solicit public comment on imposing CMPs. A due date is given of September 2019.

The implication of this notice is at some point between now and September 2019 CMS will publish a document requesting comment on the criteria for imposing CMPs for failure to comply with MSP reporting requirements. We will keep you apprised of any developments in this regard. Nonetheless, this is one area, penalties, where RREs are likely fine with CMS taking its time.