Category: Blog

Easy MSA Cost Savings Through Structured Settlements

June 21, 2023

Tower’s structured settlement partner, Arcadia Settlements Group, gave an in-depth overview of how Medicare Set-Asides, structured settlements, and professional administration facilitate workers’ comp settlements during our recent Premiere Webinar. Our Chief Compliance Officer, Dan Anders, moderated the informative session that featured Alisa Hofmann, Arcadia’s VP of Workers’ Comp and Medicare Practices, and Lori Vaughn, who oversees its structured settlement programs.

As you may know, workers’ comp settlements can be paid out in a lump sum or through structured settlements.  Here are some not-so-fun facts about lump sums:

  • 25-30% of injured people exhaust lump sum settlement funds within 2-3 months.
  • 85-90% of injured people dissipate lump sum settlement funds within 2-5 years.

When injured workers exhaust these funds, if they are Medicare beneficiaries, they turn to Medicare to cover injury-related medical bills. And the whole point of the Medicare Secondary Payer Act is to prevent this.

Structured settlements protect the MSA funds by paying them over time as an annuity. The injured worker receives two years of the MSA allocation at settlement plus the cost of a first procedure or replacement if there are any. The rest of the MSA comes in annual payments, so the injured worker receives a consistent stream of funds for injury-related care over their lifetime.

For payers, this arrangement offers significant savings and a path to faster claim resolution, especially when paired with professional administration. And, like an MSA, the structured settlement shows Medicare that its interests are protected.

A Couple of Takeaways:

  • Structured settlements aren’t only for MSAs. They can be used for indemnity and funds for healthcare services and equipment not covered by Medicare. Even attorneys can be paid through these.
  • CMS-approved lump sum MSAs can be converted to a structured MSA but require submission to CMS of an attestation from the injured worker agreeing to the change.
  • It is easier to submit the MSA to CMS in the structured settlement format as if it is later decided to go with a lump sum there is no need to submit an injured worker letter to CMS agreeing to the change. In short, submitting in this format saves time, money and frustration.

Hofmann and Vaughn also discussed self-administration versus professional administration of the MSA. They urged payers to educate injured workers on the risks, rules, and responsibilities of MSA administration.

CMS prefers professional administration. Plus, some companies like our partner Ametros provide medical and pharmaceutical savings in addition to managing the fund and reporting.

With examples that show how structured settlements are calculated, the webinar is great for new claims representatives and those who want a refresh on settlement tools.  If you’d like to receive more information on structuring an MSA or a link to the recording, please email your request to Dan Anders at daniel.anders@towermsa.com.

 

CMS Changes Rules for ORM and NOINJ Reporting in the Latest Update of its Section 111 Reporting User Guide

June 9, 2023

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

The Centers for Medicare and Medicaid Services (CMS) recently released Version 7.2 of its MMSEA Section 111 User Guide. The guide contains some notable updates for Ongoing Responsibility for Medicals (ORM) reporting, determination of the ORM termination date with a physician letter, and use of the NOINJ code in certain liability settlements.

Revised Trigger for ORM Reporting

CMS revised Section 6.3 (Policy Guidance) on the trigger for reporting Ongoing Responsibility for Medicals (ORM):

The trigger for reporting ORM is the assumption of ORM by the RRE, which is when the RRE has made a determination to assume responsibility for ORM and when the beneficiary receives medical treatment related to the injury or illness. Medical payments do not actually have to be paid, nor does a claim need to be submitted, for ORM reporting to be required. The effective date for ORM is the DOI, regardless of when the beneficiary receives the first medical treatment or when ORM is reported.

We surmise that CMS added the additional requirement (bolded) for reporting ORM so that allow no-fault plans do not have to report ORM on minor claims that have no evidence of medical treatment.  Workers’ compensation plans already have an exclusion for reporting ORM on minor medical-only WC claims where medical payments do not exceed $750, along with other requirements (See Section 6.3.1 of the guide).

The change raises an interesting question: What obligation does the no-fault plan have to determine if treatment has occurred?  In other words, does the no-fault plan have to actively inquire about treatment? Or can it be passive and wait to report ORM after treatment is occurring? There isn’t an answer from CMS’s ORM definition.

Determining ORM Termination Date Based on Physician Statement

CMS previously added a provision to Section 6.3.2 (Policy Guidance) which allows ORM termination based on a physician statement finding that no additional medical items and/or services associated with the claimed injuries will be required.  Apparently, a question arose about what ORM termination date to enter if such a physician letter is obtained.  Per CMS:

Where an RRE is relying upon a physician’s statement to terminate ORM, the ORM termination

date to be submitted should be determined as follows:

  • Where the physician’s statement specifies a date as to when no further treatment was

required, that date should be the reported ORM termination date;

  •  Where the physician’s statement does not specify a date when no further treatment was

required, the date of the statement should be the reported ORM termination date;

  •  Where the physician’s statement does not specify a date when no further treatment was

required, nor is the statement dated, the last date of the related treatment should be used as the ORM termination date.

The above should clarify the appropriate ORM termination date to use when a physician statement is obtained.

Reporting of NOINJ is Now Optional

Since the early days of Section 111 reporting CMS has required liability claims where medicals are released in settlement but where the type of claim typically has no associated or alleged medical care to be reported.  Because there were no diagnosis codes to report, these claims were reported with a “NOINJ” code.  Examples of such claims were loss of consortium, an errors or omissions liability insurance claim, a directors and officers liability insurance claim, or a claim resulting from a wrongful action related to employment status action.

CMS has now revised its policy in Section 6.2.5.2 of the User Guide (Technical Information) on the reporting of such claims to state:

Note: In cases where the reporting of a liability record only meets the criteria for reporting a ‘NOINJ’ diagnosis code in Field 18, the reporting of the record is no longer required. However, it is optional for the RRE to report the record with the ‘NOINJ’ diagnosis code following the previously existing rules in the User Guide as follows:

This update is great news for carriers who have had to report these types of claims for more than a decade now.

If you have any questions on these updates, please contact Tower’s Chief Compliance Officer, Dan Anders, at (888) 331.4941 or daniel.anders@towermsa.com

CMS News Roundup: New Conditional Payment Appeals Guide & Webinar on Section 111 Reporting

May 25, 2023

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

The Centers for Medicare and Medicaid Services (CMS) recently released a how-to guide for appealing Medicare conditional payment demands. The Non-Group Health Plan (NGHP) Applicable Plan Appeals Reference Guide consolidates conditional payment rules and best practices that the agency has issued through webinars, slides and its website.

Section 2.0 gives a breakdown of the appeals levels and explains how to submit an appeal and authorization/letter of authority requirements.  Section 3.0 details what can be appealed and supporting documentation.  Section 4.0 lists additional resources.  Finally, an appendix provides sample letters and model language for applicable plans to appoint recovery agents.

It is important to note that this guide does not cover Conditional Payment Notices (CPNs), which are issued before demand letters to allow the recipient 30 days to dispute the charges.  However, the bases for CPN disputes are the same as those found in Section 3.0.  When the dispute fails or is not timely, a demand letter is issued and the demand letter can be appealed, even with the same arguments used to dispute the CPN.

We appreciate CMS taking the time to draft and release this guide.  It joins the WCMSA Reference Guide and the Section 111 User Guide as critical reference tools for anyone impacted by Medicare Secondary Payer compliance.

CMS Section 111 Non-Group Health Plan (NGHP) Unsolicited Response File Webinar

The Centers for Medicare and Medicaid Services (CMS) recently published a Section 111 reporting webinar notice for a webinar on June 6, 2023 at 1:00 PM ET and states:

CMS will be hosting a webinar regarding the upcoming implementation of the Section 111 NGHP
Unsolicited Response File option. The format will be opening remarks by CMS, a presentation that will include background as well as how to opt in and what to expect, followed by a question and answer session. For questions regarding this topic, prior to the webinar, please utilize the Section 111 Resource Mailbox PL110- 173SEC111-comments@cms.hhs.gov

As of July 2023, Responsible Reporting Entities (RREs) can opt-in to receive a monthly “NGHP Unsolicited Response File” via the Section 111 secure website. Per CMS, the file “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.”

It is important for an RRE to review and confirm that the changes made by the BCRC and listed in this report are correct.  If not, then the BCRC must be contacted to advise them that the RRE disagrees with the change made by the BCRC.  We encourage anyone involved in managing Section 111 reporting to tune in.  Please note that there is no pre-registration; the link and call-in numbers are on the notice.  You log in shortly before the webinar’s start time.

Related Articles

CMS to Provide RREs with Response File on ORM Record Changes

Premier Webinar: Easy MSA Cost Savings Through Structured Settlements

May 18, 2023

Details for June 7th Webinar on Structured Settlements.

One of the easiest ways to lower the settlement cost is through a structured Medicare Set-Aside. Not only does this reduce the payer’s cost of funding the MSA, but it also provides the injured worker a consistent stream of funds for injury-related medical care over their lifetime.

 On June 7 at 2 pm (EDT) Tower will present an informative session on structured settlements for MSAs. Tower’s Chief Compliance Officer will moderate a special guest panel from Arcadia: Alisa Hofmann, Vice President – Workers’ Compensation and Medicare Practices and Lori Vaughn, Director of Arcadia Client Programs. This hour-long webinar will show how structured MSAs can benefit all stakeholders in a settlement – the injured party, Medicare and the insurance carrier or employer.

Attendees will learn:

  • How to work with a structured settlement provider to incorporate an MSA structure into settlement.
  • The methodology CMS uses to calculate a structured MSA.
  • Rules around converting a CMS-approved lump sum MSA into a structured MSA.
  • The role of a structured settlement broker pre-settlement, during settlement negotiations and post-settlement.

A Q&A session will follow the presentation, and you can provide questions you’d like to have answered when you register. Please click the link below and register today!

Please note that there is no CEU credit offered for this webinar.

Register here.

About Alisa Hofmann:

Alisa is the Vice President of Workers’ Compensation and Medicare Practices at Arcadia Settlements Group and currently works on the Business Development team. She has been handling and overseeing Workers’ Compensation claims for almost three decades with various national carriers.  Alisa obtained her BA in Organizational Communication at Otterbein University. She maintains her adjuster licensing in many states, also holds Life, Health, and Accident Licensing, and many Insurance Accreditations. Alisa has been an active member of the National Structured Settlement Trade Association since 2019, and a member of The MSP Network where she serves on the Professional Administration and Structure-Education Committee.

About Lori Vaughn:

Lori Vaughn has 15+ years of experience in the structured settlement industry and currently oversees structured settlement programs for multiple workers’ compensation and private insurance carrier clients. She leads teams of consultants, case managers, and corporate employees, and is the primary point of contact for the corporate management team for each client. Lori obtained her BS in Kinesiology from California State University, Fresno, and her MS in Kinesiology from California Baptist University. She holds her Life, Health, and Accident licenses in many states and is a member of the National Structured Settlements Trade Association.

CMS Significantly Expands Amended Review MSA Availability

May 17, 2023

Picture of someone reviewing documents of an MSA Amended reviews.

The Centers for Medicare and Medicaid Services (CMS) announced the expansion of its Amended Review policy to significantly more MSAs in the latest update to its WCMSA Reference Guide, Version 3.9. The Amended Review process was previously limited to MSAs approved within the last 12 to 60 months.

The 60-month limitation is now gone, opening the door to a second bite at the apple for any MSA approved over 12 months prior.

Does Your MSA Qualify?

CMS provides the following criteria for an Amended Review:

Where the following criteria are met, CMS will permit a one-time request for re-review in the form of a submission of a new cover letter, all medical documentation related to the settling injury(s)/body part(s) since the previous submission date, the most recent six months of pharmacy records, a consent to release information, and a summary of expected future care.

  • CMS has issued a conditional approval/approved amount at least 12 months prior.
  • The case has not yet been settled as of the date of the request for re-review.
  • Projected care has changed so much that the submitter’s new proposed amount would result in a 10% or $10,000 change (whichever is greater) in CMS’ previously approved amount.

A claim that meets these criteria qualifies for an Amended Review.

Other Notable Updates

The CMS Regional Offices no longer approve the MSA before its release to the submitter.  For a brief history, when CMS introduced the MSA review process in 2001 the regional offices reviewed the MSA submissions.  CMS replaced their review responsibility in 2005 by introducing a centralized review contractor, the Workers Compensation Review Contractor (WCRC).  Since then, the regional offices approved the MSA recommendation made by the WCRC.

While no longer putting their stamp of approval on the MSA, the regional offices are still responsible for the receipt and review of final settlement documents to confirm the proper funding of the MSA.

Also, as part of the update, CMS clarified pricing methodology around intrathecal pumps, spinal cord stimulators, and peripheral nerve stimulator replacement frequency.

Practical Implications

The big news is the availability of Amended Review MSAs for any prior approval which otherwise meets the above-defined criteria.  We recommend that payers review their files to identify open medical claims which may now be eligible for an Amended Review. Tower stands ready to assist you with such a review and identify claims that can now be settled.  Please contact us for further consultation.

The Critical Care Nurses Give MSAs

May 11, 2023

Banner detailing Nurses an d photo of Brittney O'Neal

In the second installment of our quarterly series, “Tower Partners: People Behind the Settlements,” and in celebration of Nurses Week, we spotlight Brittney O’Neal, our Director of Clinical Operations. A nurse, Brittney oversees the team of nurses that produces our Medicare Set-asides (MSAs).

There are so many elements and areas of expertise needed to develop an MSA that is fair, reasonable and compliant.  Or, as we say: optimized. If Tower’s MSA operation was in the shape of a wheel, Brittney would be the hub.  Read on to learn more about her and how our MSAs are written to be effective settlement tools.

  1. What does your position as Director of Clinical Operations entail? And how does your role impact Tower’s clients?

I lead clinical operations which includes MSA writing, quality assurance and our Physician Follow-up service. We have a team of RNs who review the records and write MSA reports.  In so doing, they identify potential treatment and pharmacy problems and make intervention and mitigation strategies. As part of our quality assurance, I review MSA allocations for accuracy and make necessary corrections before they are delivered to our clients.  I also oversee our Physician Follow-up team, which is contacting treating physicians to resolve many of the problems we identified in writing the MSA.

Client communication is vitally important. I’m available to answer questions from clients and prospects and help them put together a plan of action to settle a claim.

  1. What led you to become a nurse? What experiences shaped your professional journey?

I actually started in the pharmacy field, wanting to become a pharmacist. However, one of my mentors told me that the industry was moving away from patient care and that I should look into more of the medical side.

  1. How did you get into MSP compliance and MSAs?

Honestly, by chance. I was a pharmacy technician looking for something different and was fortunate to land an interview with Tower MSA Partners. Kristine Dudley, Tower’s Chief Operating Officer, gave me an opportunity to turn a job into a career.

  1. How does being a nurse help you in your job at Tower?

Being a nurse enables you to better understand the medical material you are reading to in turn prepare an accurate allocation. It guides your approach to researching services and Medicare coverage and the ability to provide intervention strategies.

  1. What part of the job do you find the most rewarding?

I enjoy being able to help our teams and clients navigate the different aspects of this industry.  It’s great to be able to teach and share my knowledge while also learning from others. It is also rewarding to hear from clients who are grateful for the cost-saving measures our team accomplishes and the turn-around time of the reports.

  1. What are some of the things clients ask about most often?

Many questions include whether an MSA or Medical Cost Projection (MCP) is needed, CMS review thresholds, and the Amended Review process. Other questions deal with mitigation tactics to help with cost-saving measures.

  1. How do you facilitate the settlement of claims for Tower clients?

Everything Tower does is designed to facilitate claims settlement.  Carefully reviewing claims for cost drivers, like the wrong body part or duplicative or discontinued drugs. (That pharmacy background really came in handy!)  Turning around reports quickly and recommending and implementing clinical interventions to eliminate unnecessary costs.  Physician Follow-up ensures that treatment changes are properly recorded in medical records and that we have a signed physician statement so CMS can approve our MSA.

  1. Where did you attend school/degrees?

I earned an Associate of Arts degree from Palm Beach State College, then an Associate Degree in Nursing (ADN) from HCI College, also in Palm Beach, Florida.

  1. What do you like best about working for Tower?

The close-knit family atmosphere. No matter what “title” one holds, we all understand the different levels of the workflow and are willing to assist in various areas when needed. Everyone is willing to share their knowledge so that other members can better understand the MSA/CMS process, along with other MSP matters, such as conditional payments and mandatory reporting.

  1. How do you think Tower sets itself apart from companies that sell the same/similar services?

I feel Tower MSA Partners sets itself apart from other companies by promptly being available for our clients to speak with and by having attorneys on staff for consultation. Another way is our free Physician Follow-up service and fast turn-around time on reports.

  1. Where did you grow up, and where do you live now?

I was Born in Long Island, NY, and moved to Palm Beach County, FL as a child.  Now we’re living in Saint Lucie County, FL.

  1. Tell us about your background and family.

Prior to joining this industry, I worked in retail and hospital pharmacy which assisted me with transitioning into the MSA world and going on to pursue my RN. My husband is a Firefighter/Paramedic, and we have three children (12, 9, and 5).

  1. What do you like to do on your time off?

On my off-time, I am a busy wife/mom running around to football practices/games and will soon start softball for my baby girl. I also enjoy weightlifting with my husband and family outings.

Thank you to Brittney and all our Tower nurses for your commitment to providing our clients with the highest level of service.  Happy Nurses Week!

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.

Does Your MSA Program Measure Up?

April 11, 2023

person pointing out metrics on a posterboard to measure Medicare Set Aside

Workers’ comp payers regularly measure the performance of different aspects of their programs. Understanding injury frequency rates, the average cost per claim, timeliness of claims processing, lost-time and return-to-work rates help them identify cost drivers and improve processes. Payers also evaluate the performance of external partners — provider networks, bill review, pharmacy benefit managers, third party administrators, physical therapy networks, home health and case management vendors, etc.

But do they evaluate their Medicare Set-Aside (MSA) programs and vendors – not so much.

Why not? Well, some employers, TPAs, and insurers have their Medicare Secondary Payer (MSP) services integrated into a multi-service contract. As a result, they may assume that MSAs are just part of the process – they are all the same – they take the time they take – and they cost what they cost.

Without metrics to benchmark your performance against some sort of standard, how would you know?

In the case of MSAs, until recently, payers did not have benchmarks to determine what to measure.

In 2022, for the first time, the Centers for Medicare and Medicaid Services (CMS) published some metrics that can give payers a benchmark for comparison. While CMS’ data points are limited, they offer a great place to start.

Average MSA Amount

Providing statistics from fiscal years 2020 through 2022, CMS found the average MSA recommended amount was $84,563.33 in 2020, $80,740.94 in 2021, and $81,571.75 in 2022. (“Recommended” in CMS language means CMS believes the dollar amount of the allocation will be sufficient for the lifetime medical cost of the injury. It’s equivalent to a CMS-approved amount.)

Having captured, benchmarked and analyzed our MSA submitted amounts for more than six years, Tower was excited to see how our outcomes compared to CMS’s published numbers.

One example is the average amount of an MSA. CMS’s average in 2022 was $81,571.75, while the average of Tower’s CMS-approved MSAs was $54,715. That’s nearly $27,000 less than CMS’ number, a whopping 33% less than the CMS’s average amount.

And this didn’t just happen in 2022. The average amounts of Tower’s MSAs were 32% lower in 2021 and 30% lower in 2020.

This is a credit to our powerful and persistent clinical interventions.

Approved Rx Drug Cost

CMS also broke out the cost of prescription drugs on its recommended/approved MSAs. The agency’s average prescription drug cost for 2022 was $20,776, compared to Tower’s $11,405.

Tower’s averages in this category have steadily declined since 2020 when Tower’s average Rx drug cost was $17,941, then $14,079 in 2021. If it seems like we’re boasting a little, we are. Our CEO’s strong background in pharmacy management has paid off over the years.

We have concentrated on pharmacy costs since Tower was founded in 2011. We always examine claims for unnecessary cost drivers like duplicate scripts, discontinued prescriptions, and opportunities to change from brand to generics. And Tower led the charge in identifying inappropriate opioid use on MSAs along with all the prescriptions needed to handle side-effects.  Notably, in 2022, only 15% of Tower’s CMS-approved MSAs included opioids.

We don’t stop at identification, either. Our clinicians work with physicians, gain their agreement to taper injured workers off opioids and follow up to ensure changes happen.

Re-reviews

Tower also doesn’t let CMS get away with errors and misinterpretation of medical records with the MSA submission.  We know our MSAs and we know the rules so that we can confidently challenge CMS when we believe it’s wrong.

While there is no formal appeals process when an MSA comes back higher than proposed, we can submit a re-review request to reduce the MSA.  In 2022 Tower had a 63% success rate at obtaining a partial or full reduction from the CMS MSA counter-higher using the re-review process.

Conditional Payment Disputes and Appeals

When it comes to Medicare conditional payments, in many, many cases, the reimbursement demand is inaccurate. If the client approves, we’ll chase every dollar of savings.  We’re aggressive because we have the records, fee schedules, technology, and CMS response data to fight for our clients. In 2022, our conditional payment disputes and appeals yielded an overall 92% reduction. In 70% of these cases, the demand was reduced to $0.

While CMS did not publish metrics on conditional payments, Tower believes it’s an important point to measure.  There are numerous other areas that we measure and our Chief Compliance Officer Dan Anders is happy to discuss these and work with you on developing metrics for your own program.  Contact him at daniel.anders@towermsa.com.

 

Successful Appeal to CMS ALJ Yields $80K Reduction in Conditional Payments

March 15, 2023

Scrabble tiles spelling Appeal to use for Conditional Payments

In response to a Medicare conditional payment demand, payers can access a five-level appeals process, including a hearing before a Centers for Medicaid and Medicaid Services (CMS) administrative law judge (ALJ). Most conditional payment demand appeals are resolved at the first two levels: redetermination and reconsideration.  However, some are escalated to an ALJ as happened in this case.

ALJ Appeal Success Story

On July 24, 2020, the Commercial Repayment Center (CRC) issued a demand for reimbursement of $149,902.98.  The work injury had aggravated a pre-existing left knee skin graft, resulting in an infection of the left knee.  The payer accepted the aggravation but not the long-term condition of the knee.

Charges on the demand were either completely unrelated to the left knee or for treatment deemed related to the longstanding pre-existing condition of the left knee.  An appeal was filed, and the CRC redetermination decision stated that none of the charges would be removed.

At this point, a second-level appeal was filed with the Qualified Independent Contractor (QIC). CMS contracts with the QIC to provide an independent review apart from the CRC. Its March 26, 2021 reconsideration decision was partially favorable because almost all the charges related to body parts other than the left knee were removed from the demand. The revised demand was $79,489.97, which also included interest.

The next step was an ALJ appeal submitted on May 12, 2021.  It can take two to three years to receive a hearing date, but in this case, it took a little over a year to receive a hearing date set for June 28, 2022.

The difficulty in this appeal is that after some initial treatment in the state where the injury occurred, the injured worker moved to another state where he received further treatment.  The payer never received bills from the out-of-state medical providers whose charges were listed in the conditional payment demand.  Fortunately, we could work with the defense attorney who subpoenaed the medical records.  Unfortunately, upon review, the medical records were unclear on causation.

Nonetheless, we put our best argument forward at the hearing and through our brief to the ALJ that the work-related infection was a temporary aggravation of a long-standing condition of ulcers to both knees.  This was supported by an inconsistent history from the injured worker and medical notes, which implied that the post-injury infection had resolved shortly after the accident.

What is helpful at the ALJ appeal level is that you can speak to the judge, explain your position and answer his or her questions.  This differs from the first two levels of appeal, which come down to submitting the appeal and receiving a decision.

In a September 12, 2022 decision, the ALJ agreed with our position.  As a result, the demand, which by then exceeded $80,000, was reduced to $441.19.

Keys to Appeal Success

Here is what made this appeal successful:

Appeals Deadline Met

All five levels of appeal have specific timeframes for an appeal submission. It is essential to file an appeal by the designated deadline which should also prevent the CRC from referring the debt to the Treasury Department for collection (assuming the debt is not paid during the pendency of the appeal).

In this case, our client had designated Tower as its recovery agent, which means we receive copies of letters and notices the CRC sends this client.  As the recovery agent, we can immediately advise the client of a Conditional Payment Notice or Demand Letter, what it means, and the deadline for action. As a result, all appeals deadlines were met.

Cooperation Between Tower and Client

Successful conditional payment appeals are often based on medical records, Independent Medical Exams and utilization reviews, as well as legal documentation.  It is imperative that the claims professional and defense attorney work with Tower to obtain the documentation necessary to support the appeal.  In this case, the defense attorney’s diligent efforts at subpoenaing and then follow-up with the medical provider resulted in the timely receipt of the out-of-state medical records.

Knowledge and Experience with Conditional Payment

In addition to having supporting documentation, the appeal must provide an acceptable basis for why the charges should be removed from the demand.  Tower’s team of professionals has the knowledge and experience to combine the facts and law to make successful arguments to the CRC and QIC. Additionally, any matter appealed to the ALJ will be handled by Tower’s Chief Compliance Officer, Dan Anders, who has two decades of experience in Medicare Secondary Payer compliance, including prior successful ALJ appeals, as exemplified in this case.

Whatever your conditional payment scenario, we stand ready to assist.  Learn more about our conditional payment services here, where you can also refer a matter for handling.

 

CMS Extends Deadline for Publication of Final Section 111 Penalties Rule

February 20, 2023

picture of stamps reading rules, regulations, Section 111 Penalities

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.

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