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Medicare Secondary Payer and Workers’ Compensation Settlement Agreement Act: 30 Days and Counting…. Can it Succeed?

June 18, 2012

Introduced into the US House of Representatives on April 27, 2012, the Medicare Secondary Payer and Workers’ Compensation Settlement Agreements Act of 2012 (HR 5284) aims to streamline the settlement of workers’ compensation agreements by creating an exception to Medicare secondary payer requirements. The bill also provides language that could ease the path toward satisfying these requirements by using qualified Medicare set-aside arrangement (MSA) under these agreements.

Designed to apply to certain workers’ compensation settlements agreements, the bill proposes changes if any of the following criteria is present:

The total settlement is $25,000 or under;
The claimant is not eligible for Medicare at settlement date and is not expected to be eligible within 30 months;
The settlement agreement does not limit or eliminate the claimant’s right to payment of future medical bills;
The claimant is not eligible for future medical bill payments under the settlement.

US representative David Reichert (WA-8) introduced the bill in an attempt to improve the set-aside process for workers’ compensation claims. Current settlements that overlap with Medicare coverage create a lengthy review period on what constitutes the set-aside coverage amounts.

Currently, HR 5284 has been referred to the Subcommittee on Health for review. The bill has gained heavy support from industry organizations, including American Insurance Association (AIA), American Association for Justice (AAJ), American Bar Association (ABA), National Council of Self Insurers (NCSI), Property Casualty Insurers Association of America (PCI), UWC – Strategic Services on Unemployment & Workers’ Compensation (UWC), Washington Self-Insurers Association (WSIA), and Workers Injury Law and Advocacy Group (WILG).

Part of the problem may be that the legislation tries fixing what isn’t governed. There is a lack of any real definition of MSA from a regulatory sense. Would wrapping laws around an undefined practice work?

Also, industry buzz suggests that legislators are treating workers’ compensation issues much like they would group health issues. Also, detractors of the bill believe there is little to address the calculation of allocation amounts and too little consistency in understanding and applying CMS policies.

The success of H.R. 5284 will depend largely on how well the legislation understands the MSA environment. While the idea may be a good one, the actual practice may fall short of its intended goal.

CMS Proposes Regulations Addressing Future Medicals in Liability Settlements

May 23, 2012

While text of the proposed rules have not yet been released, it appears that CMS has developed regulations that will ‘advise’ that parties must determine whether an allocation for future medicals exists within a gross liability award, and then document those efforts in a pre-defined format. If this is the case, this would be the first CMS guidance on future medicals within liability settlements since the CMS memo of September, 2010. If our suspicsions are correct, this represents a significant development in the MSP world.

Guidance as to how parties should address future medicals in liability settlements has been virtually non-existent until now. The first step, in play now, inlcudes internal vetting within the Executive Branch of the federal government. Following Executive Branch approval, CMS will release the proposed regulations to the settlement community for comment. Each comment will be considered, and if appropriate, will lead to modifications and a new comment period prior to CMS enacting the regulation.

When available, a detailed analysis of the proposed regulation will be available on our website.

H.R. 5284 – The Medicare Secondary Payer and Workers’ Compensation Settlement Agreement Act of 2012

May 17, 2012

The Medicare Secondary Payer and Workers’ Compensation Settlement Agreement Act of 2012, H.R. 5284, was filed in the U.S. House of Representatives by Rep. Dave Reichert (R-WA) on April 27, 2012. The Government Printing Office released the text of the bill o May 7, 2012.

What H.R. 5284 Promises
Rep. Reichert purports that this bill “improves the Medicare Set-Aside process for workers compensation claims” and “provides clear and consistent standards for an administrative process that provides reasonable protections for injured workers and Medicare”.

Provides An Exemption From MSP Statute
H.R. 5284 amends the Medicare Secondary Payer (MSP) statute to provide an exemption from the Medicare Secondary Payer (MSP) statute for workers’ compensation settlements where any of the following occur:

• Total settlement is less than or equal to $25,000;
• Claimant is not eligible for Medicare at settlement date and is unlikely to become eligible for within 30 months;
• Future medical coverage is not included in the settlement;
• Settlement agreement does not limit or extinguish the right of the claimant to payment of future medical bills.

Defines “Qualified Medicare Set-Aside”
A (QMSA), as defined in H.R. 5284, is “a Medicare set-aside that reasonably takes into account the full payment obligation for present and future medical payments”. HR 5284 amends the MSP Statute such that a workers’ compensation settlement that includes a “qualified Medicare Set-Aside” (QMSA) will satisfy any obligation, with respect to present or future payment reimbursement under Section 1395y(b)(2) of the MSP statute.

To be considered as a QMSA, the MSA must give due consideration to:

• The illness or injury, age and life expectancy,
• the reasonableness of and necessity for future medical expenses,
• the duration of and limitations on benefits payable under the workers’ compensation law or plan and the relevant State workers’ compensation regulations and case law.

The QMSA must also:

• Include payment for items, services that are covered by the workers’ comp law or plan involved;
• Be based on the applicable workers’ compensation State fee schedule;
• Can (not must) be calculated using a proportional adjustment for compromised settlements that reduces the QMSA by the same proportion that the total settlement was reduced.

Under H.R. 5284, the current CMS review process remains intact. However, the follow requirements must be met during the review process to be considered a QMSA:

• The Secretary has 60 days to review the QMSA.
• Failure to meet that 60-day deadline will deem the QMSA to be approved.
• If denied, the Secretary must include specific reasons.
In addition, HR 5284 establishes an appeals process, with specific time deadlines, that entitles the dissatisfied party the right to all of the following:
• a reconsideration by the Secretary,
• a hearing before an administrative law judge,
• a judicial review.

Establishes a “Safe Harbor” Amount
Medicare set-asides of $250,000 or less are deemed QMSAs upon written consent of all parties to the settlement agreement, AND if a “safe harbor amount” is paid directly to Medicare.
The safe harbor amount is defined as “15% of the total settlement, excluding repayment of conditional payments and previously settled portions of the claim”. The bill gives the Secretary the authority to modify the safe harbor percentage if it is determined that the 15% rate causes significant negative impact.

Sets Time Limit for Conditional Payment Request
If the Secretary fails to provide conditional payment information within 90 days, then neither the claimant nor the payer is liable for any reimbursement to Medicare with respect to the conditional payment information being requested.
Sets QMSA Payment Not > Workers’ Compensation Fee Schedule
No one shall be liable for any payment amount established under a Medicare set-aside for an item or service provided to the claimant that is greater than the related workers’ compensation fee schedule amount. In addition, a provider may not bill a Medicare set-aside more than the payment rate used in the Medicare set-aside or the Secretary may apply sanctions.

Treatment of state workers’ compensation law
If a workers’ compensation settlement agreement is accepted in accordance with the workers’ compensation law of a jurisdiction, then that acceptance shall be deemed conclusive. That includes determination of reasonableness of the settlement value, any allocation of funds, the projection of future indemnity or medical benefits that may be payable under State workers’ compensation law.

To view the text of H.R. 5248, click here.

Coming Soon – The Medicare Secondary Payer Recovery Portal

A new online Self-Service Tool to help manage your Medicare recovery case.

The Centers for Medicare & Medicaid Services (CMS) is in the process of implementing a new web-based tool designed to assist in and accelerate the resolution of Liability Insurance, No-Fault Insurance, and Workers’ Compensation Medicare recovery cases. The new tool is called, The Medicare Secondary Payer Recovery Portal (MSPRP).

The MSPRP will give users (attorneys, insurers, beneficiaries, and TPAs) the ability to access and update certain case specific information online. Activities that currently require written communication or telephone calls to the Medicare Secondary Payer Recovery Contractor will soon be able to be done through the portal.
The MSPRP will allow users the ability to electronically perform the following activities:
•Submit Proof of Representation or Consent to Release documentation – Instead of mailing in an authorization, users will be able to upload authorizations through the portal.

•Request conditional payment information – Requesting an updated conditional payment amount or a copy of a current conditional payment letter will be as simple as clicking a few buttons.

•Dispute claims included in a conditional payment letter – Users will be able to view the claims listed on the conditional payment letter and dispute unrelated claims online.

•Submit case settlement information – Users will be able to input settlement information online and upload a copy of the settlement documentation through the portal.

The MSPRP is scheduled to go live in July 2012. Additional details regarding the MSPRP will be shared on this website in the coming months.

Tower MSA Partners will be part of the MSPRP rollout. More details will follow as to how to utilize this new electronic service.

New Option to Self-Calculate Your Conditional Payment Amount

January 30, 2012

Just released from MSPRC (http://www.msprc.info/).

On February 21, 2012, the Centers for Medicare & Medicaid Services (CMS) will implement an option that allows certain Medicare beneficiaries to self-calculate Medicare’s final conditional payment amount prior to settlement. A full explanation, including instructions on how and when to elect this option can be found by clicking on the following link:

http://msprc.info/forms/SelfCalculatedFinalCP.pdf

The information provided includes eligibility criteria for this process, instructions on how to self-calculate the final conditional payment amount, CMS’ review process, tips, and an illustrative example for completing this new process.

CMS will continue to improve and refine this process. Therefore, we welcome your input and comments at a future teleconference.

Tower MSA Partners Seeks Experienced Salespeople

January 4, 2012

Tower MSA Partners is aggressively seeking experienced salespeople in both workers’ compensation and liability markets. Interested parties should forward their resumes to info@towermsa.com. To speak with someone directly, please call 888-331-4941 and reference this post.
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Workers’ Compensation Medicare Set-aside Portal (WCMSAP)

November 29, 2011

The Center for Medicare & Medicaid Services (CMS) has completed its Pilot Testing of the Workers’ Compensation Medicare Set-aside Portal (WCMSAP). The CMS will be conducting a Town Hall conference call on November 29, 2011 from 1:00 to 3:00 pm (EST), to introduce this initiative to submitters of proposed Workers’ Compensation Medicare Set-Aside Arrangement (WCMSAs) amounts, and to answer questions regarding the WCMSAP. After the Town Hall conference call, CMS will post the links of the WCMSAP application, and the WCMSAP Computer Base Training (CBT) Modules, on the Workers’ Compensation Medicare Set-aside Portal (WCMSAP) section page “Related Links Outside CMS.”

Please Note: The call in information for the WCMSAP Town Hall teleconference is:
Call in time: 1pm to 3pm
Call In Line: 1-(800) 603-1774
*Conference ID: 29840615

*Participants must use the Conference ID number to be allowed into the call.

Centers for Medicaid & Medicare Services (CMS) Town Hall Teleconference Call Summary

CMS Town Hall Teleconference Call Summary
November 22, 2011

The most recent Town Hall Teleconference was hosted by the Department of Health and Human Services Centers for Medicare & Medicaid Services (CMS) on Wednesday, November 16, 2011. Areas of technical concern discussed during the teleconference related to Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) mandatory reporting.

Below is a synopsis of the items discussed:

CMS and Coordination of Benefits Contractor (COBC) responded to multiple callers who described scenarios in which Medicare beneficiaries were being denied payment and/or services for medical conditions unrelated to the workers’ compensation injury. In some situations the beneficiary was being directed to contact his/her workers’ compensation, no fault or liability claim adjuster to obtain authorization for procedures NOT related to the beneficiary’s covered injury.The CMS COBC representatives requested that specific examples of improper provider denials be directed to the individuals hosting the call and they would deal with the issues.As an adjunct, CMS restated the instructions in the 3.2 Version of the User Guidelines which direct RRE’s to report as many ICD9 codes as are applicable to the injury, but reinforced that ONLY those codes that describe the injury are to be reported. If ICD9 codes related to other medical conditions are reported, the COBC may assume that services related to these codes are to be covered by the RRE.
CMS discussed the ‘51 disposition code’ errors that are being generated when their system is unable to match on 3 of the 4 personal identification data elements being submitted by the RRE noting that it is extremely important that RRE’s go back and confirm that their info is correct.
If the RRE has a claim to report, but is unable due to the ’51 disposition code’ error, the RRE may still be considered as non-compliant. The clear message was to address the error.
CMS and the COBC reminded the RRE’s that claim records are NOT to be submitted until claim responsibility is established. While the claim is under investigation, no submission should occur.The responsibility to report a workers’ compensation, liability or no fault claim only arises where there is a Medicare beneficiary and either the RRE has assumed responsibility for payment of medical benefits or a TPOC event occurs. Absent those two events no information should be reported on the claim input file.
The one caveat to the above directive occurs in conjunction with the requirement in certain states (TX and MI were examples) that the entity must pay while investigating claims or during claim appeal. In these situations or ORM, the claim needs to be reported.
CMS explained that in situations where ongoing responsibility for medical benefits will continue for a term of months or years following a TPOC event, Medicare expects a subsequent notice of ORM termination to be provided at the time of the ORM termination. CMS will not allow RREs to report ORM terminations that are, for instance, one to two years into the future. RREs must report both the TPOC event and the ORM termination date when they occur, independently.
Improper reporting of TPOC amount in Liability settlements – In liability cases where several insurers are individually responsible for payment, the following directive was given. If there are separate settlements, only report the amount of your settlement. In cases where there is joint and several liability, each RRE must report the full TPOC amount.
Beginning January, 2012, RRE’s will receive emails asking each to confirm the accuracy of the RRE’s profile information in order to renew. Emails will be sent both the authorized representative and to the account manager. The representative must contact the EDI representative to confirm accuracy, or to update the profile. The authorized representative will also need to sign and submit newly assigned profile. If not signed, the RRE’s EDI application might be revoked (If the authorized representative is no longer with company, account manager should get email and can respond). RRE’s should expect this and should let their EDI representative know if either or both leave the company.
Those were the primary issues discussed during the teleconference, with many questions surrounding the improper denial of Medicare coverage. The next Town Hall Teleconference will occur on Wednesday December 14th, and that call will focus on both policy matters.

For more information on SCHIP 111 , please contact Tower MSA Partners @ 888.331.4941 or email your questions to info@towermsa.com.

Wyden, Portmam Lead Effort to Make Medicare Secondary Payer Program More Efficient, Save Taxpayer Dollars

October 19, 2011

Wyden, Portman Lead Effort to Make Medicare Secondary Payer Program More Efficient, Save Taxpayer Dollars

Bill Makes Common Sense Reforms to Medicare’s Reimbursement Rules to make it easier for the program to collect from Third Party Payers

FOR IMMEDIATE RELEASE: Monday, October 17, 2011
Jeff Sadosky (Portman) | 202-224-5190
Jennifer Hoelzer (Wyden) | 202-224-3789
Jake Thompson (Nelson) | 202-224-8795
David Ward (Burr) | 202-228-1616

WASHINGTON, D.C. – U.S. Senators Ron Wyden (D-Ore.) and Rob Portman (R-Ohio) are leading a bipartisan effort that includes U.S. Senators Ben Nelson (D- Neb.) and Richard Burr (R-N.C.) to make the Medicare Secondary Payer (MSP) Program more efficient and cost effective to taxpayers. The Strengthening Medicare and Repaying Taxpayers (SMART) Act will speed up the rate by which Medicare and its beneficiaries are reimbursed for costs that should be borne by another party.

“Streamlining third party payment fixes some of the bureaucratic requirements that often stand in the way of Medicare being reimbursed for services that they are not supposed to pay for,” Wyden said. “By making the process more efficient, Medicare will be repaid more quickly and more accurately than before and the repayment process will work the way it was designed to work. An easier repayment process is not just good for Medicare and taxpayers, but also for the beneficiary who should be able to settle their claim more quickly.”

“I am pleased to introduce the SMART Act because it will help strengthen and protect Medicare by ensuring greater reliability and efficiency of Medicare reimbursements,” said Portman. “With Washington’s sky high debt and deficit, we need to do everything we can to ensure that entitlement programs such as Medicare are cost effective and working for the very people they were designed to help.”

“The current Medicare Secondary Payment Program is a bureaucratic mess that often leaves everyone involved in the settlement process – from Medicare beneficiaries to small businesses – unsatisfied,” Sen. Nelson said. “The SMART Act will help the program run more efficiently and reduce unneeded uncertainty for all the parties involved.”

“The lack of transparency and inefficiencies with the current Medicare Secondary Payer process illustrates how Washington’s red-tape and regulatory uncertainty can adversely impact seniors and businesses,” Burr said. “In order to get our economy back on track, we simply cannot afford to continue to waste taxpayer dollars by perpetuating the inefficiencies of the current Medicare Secondary Payer system. We can and must do a better job for the seniors and stakeholders depending upon this program to be as transparent and efficient as possible.”

Under the MSP program, if a Medicare beneficiary is injured by a third party and a settlement is pursued as a result of that injury, the third party is responsible for paying for the individual’s medical expenses. If Medicare, now the “secondary payer,” pays any of the costs associated with the injury, it is entitled to reimbursement.

Several problems exist with the reimbursement process under this scenario. Under current law, Medicare does not have a way to disclose the MSP amount before settlement, creating unnecessary uncertainty that makes it hard to settle cases. Second, there are times when Medicare spends more money pursuing an MSP payment than they actually end up receiving in payment. MSP reporting requirements also require beneficiaries to submit sensitive personal information to the settlement company, causing privacy concerns. Finally, there is no clear statute of limitations on all MSP claims.

The SMART Act will address these issues by creating a process that allows CMS to disclose the MSP amount before settlement so it can be factored into the settlement; requiring Medicare to no longer pursue MSP claims that do not cover their own expenses; directing Medicare to establish an alternative method of identifying individuals so that they don’t have to provide sensitive personal information; and setting a three-year statute of limitations for most claims.