Liability Settlements Archives

CMS Section 111 Penalties Rule Focuses on Untimely Reporting

October 12, 2023

Stamp icons representing regulatory enforcement of Section 111 reporting by CMS.

On October 11, 2023, CMS published a final rule on the imposition of Civil Monetary Penalties for failure to comply with the Section 111 Mandatory Insurer Reporting requirements. The rule’s focus and the sole reason for penalties will be untimely reporting. Even if a Responsible Reporting Entity (RRE) reports untimely, it may only be subject to penalties if that claim is identified through a randomized quarterly audit process.

Please see a full Q&A below. We will be sending an invitation for a special webinar on Section 111 penalties shortly!

Note, while the final rule encompasses both Group Health Plans (GHPs) and Non-Group Health Plans (NGHPs), this article is specific to NGHPs.

Under what circumstances can CMS impose penalties?

Per CMS:

. . . we have determined that we will only impose penalties where the initial report was not received in a timely manner. Penalties will not be imposed on any other basis, such as in relation to the quality of reporting. Timeliness is determined by comparing the date a record is submitted and accepted against the date CMS should have received the record. The date CMS should receive a record is determined by the effective date of coverage or the date of settlement (or settlement funding date if the funding of the settlement is delayed) plus 1 year (365 days).

CMS considers the “initial report” to be the reporting on Ongoing Responsibility for Medicals (ORM) or, if ORM was not previously reported, the reporting of Total Payment Obligation to the Claimant (TPOC), namely the settlement, judgment, award, or other payment. Importantly, CMS expressly indicated in these comments that a failure to report ORM termination will not subject the RRE to penalties:

In the final rule, based on stakeholder concerns and submitted comments, CMS has chosen to focus its definition of noncompliance solely on those situations where an entity has failed to provide its initial report of primary payment responsibility in a timely manner. That means that untimely termination of ORM coverage records would not be considered eligible for a civil money penalty under this rule.

On the surface, even this more narrowly tailored rule could subject many claims to penalties. However, CMS is implementing a randomized audit process that will only review a small portion of the thousands of reported claims it receives. Per CMS:

CMS has determined that, given the time and resources necessary to accurately and thoroughly evaluate the accuracy of any submitted record, it would be possible to audit a total of 1,000 records per calendar year across all RRE submissions, divided evenly among each calendar quarter (250 individual beneficiary records per quarter).

- CMS will evaluate a proportionate number of GHP and NGHP records based on the pro-rata count of recently added records for both types of coverage over the calendar quarter under evaluation. For example, if over the calendar quarter being evaluated, CMS received 600,000 GHP records and 400,000 NGHP records for a total of 1,000,000 recently added beneficiary records, then 60 percent of the 250 records audited for that quarter would be GHP records, and 40 percent would be NGHP records.
- At the end of each calendar quarter, CMS will randomly select the indicated number of records and analyze each selected record to determine if it is in compliance with the reporting requirements as required by statute and defined herein.

Accordingly, to be chosen for a penalty a claim would need to both be reported untimely and identified through this randomized audit. As CMS indicated in its comments, it expects this type of audit to pick up larger reporting entities.

How will the RRE be notified of the penalty?

Once a claim has been identified for a penalty there is an informal notice process, per CMS:

We intend to communicate with the entity informally before issuing formal notice regarding a CMP. The informal (that is, prior to formal enforcement actions) written “pre-notice” process will allow the RRE the opportunity to present mitigating evidence for CMS review prior to the imposition of a CMP. The RRE will have 30 calendar days to respond with mitigating information before the issuance of a formal written notice in accordance with 42 CFR 402.7.

Common to all such instances where informal notice will be given is the intention to give the RRE an opportunity to clarify, mitigate, or explain any errors that were the result of a technical issue or due to an error or system issue caused by CMS or its contractors. It would be impractical and counter to the spirit of the informal notice process to regulate or enumerate all circumstances in which mitigating information could be provided or what that information should convey. As such, any mitigating factors or circumstances are welcomed, and a dialogue is encouraged in an attempt to find solutions that are short of imposing a CMP. We believe it is in the best interests of all RREs to leave the informal notice process open to any reasonable submission of mitigating factors so that we are free to entertain all such documentation without strict limits on what is, or is not, acceptable.

In many circumstances, the RRE may have a reasonable explanation for the untimely reporting. Because of the 30-day timeline, RREs must be prepared to react quickly to these informal notices by investigating and responding within the required timeframe.

If the RRE fails to respond to the informal notice or CMS does not accept the explanation for why the report was untimely, then CMS will issue a formal notice.

Is there an appeals process?

Yes, per CMS:

The recipient will 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.

If a penalty is imposed, how will the dollar amount be calculated? Is there a maximum penalty?

CMS has developed a tiered approach to penalties, which provides:

Because we have the statutory authority to adjust the amounts of penalties imposed on NGHP RREs, a tiered approach and cap on the total amount of penalties applicable to such RREs are being finalized in this rule. As explained previously, the statute does not permit us to extend this approach to GHP RREs. For any record selected via the random audit process described above where the NGHP RRE submitted the information more than 1 year after the date of settlement, judgment, award, or other payment (including the effective date of the assumption of ongoing payment responsibility for medical care); the daily penalty will be—

- $250, as adjusted annually under 45 CFR part 102, for each calendar day of noncompliance, where the record was reported 1 year or more, but less than 2 years after, the required reporting date;

- $500, as adjusted annually under 45 CFR part 102, for each calendar day of noncompliance, where the record was reported 2 years or more, but less than 3 years after, the required reporting date; or

- $1,000, as adjusted annually under 45 CFR part 102, for each calendar day of noncompliance, where the record was reported 3 years or more after the required reporting date.

Additionally, the total penalty for any one instance of noncompliance by an NGHP RRE for a given record identified by CMS will be no greater than $365,000 (as adjusted annually under 45 CFR part 102).

Are there any safe harbors from penalties?

Per CMS:

First, any untimely reporting that is the result of a technical or system issue outside of the control of the RRE, or that is the result of an error caused by CMS or one of its contractors would not be considered noncompliance for purposes of this rule.

Second, any untimely reporting by an NGHP that is the result of a failure to acquire all necessary reporting information due to a lack of cooperation by the beneficiary will not lead to a CMP provided that certain standards are met.

CMS defines a safe harbor based on good faith efforts to obtain claimant information for reporting as follows:

If an NGHP entity fails to report timely because the NGHP entity was unable to obtain information necessary for reporting from the reportable individual, including an individual’s last name, first name, date of birth, gender, MBI, or SSN (or the last 5 digits of the SSN), and the responsible applicable plan has made and maintained records of its good faith effort to obtain this information by taking all of the following steps:

- The NGHP has communicated the need for this information to the individual and his or her attorney or other representative (if applicable) 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, 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 efforts to obtain the missing information, such as 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. The current OMB control number assigned to this information collection effort, as required under the Paperwork Reduction Act, is 0938-1074.

Is there a statute of limitations on penalties?

Yes, per CMS:

We agree and 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 occurred.

The five-year limitation begins to run as of the date the untimely report is made to CMS.

When does the rule become effective?

The rule becomes effective as of December 11, 2023.

Will the rule be retroactive?

No, per CMS:

CMPs will only be imposed on instances of noncompliance based on those settlement dates, coverage effective dates, or other operative dates that occur after the effective date of this regulation and as such, there will be no instances of inadvertent or de facto retroactivity of CMPs.

Since the rule effective date is December 11, 2023, CMS can consider penalties on untimely reported claims on or after this date. This means that if the untimely ORM and TPOC date was December 11, 2023, or later, it may be subject to penalties. Untimely, pre-December 11, 2023, ORM and TPOC dates will not be subject to penalties.

Additionally, CMS has indicated that penalties will not be issued until one year after the final rule’s publication, namely October 11, 2024.

How does the final rule differ from the proposed rule?

The proposed rule contained two other issues that could result in penalties. These were RREs reporting ORM and later reporting contradictory diagnosis codes and exceeding error tolerance thresholds. The final rule consists solely of penalties for untimely reporting.

This means that reporting errors, such as incorrect diagnosis code reporting, will not result in Section 111 reporting penalties (although it can still result in inappropriate Medicare conditional payment demands). Further, when the RRE corrects this data, it will not be penalized for doing so.

What steps must an RRE take to avoid penalties?

Simply put, reporting of ORM and/or TPOC must be timely. When the criteria are met for a claim to be reported, it should be reported during the next quarterly reporting period.

Suppose the RRE has difficulty obtaining identifying information to determine whether a claimant is a Medicare beneficiary. In that case, those efforts should be in accordance with the good faith effort rules described in the safe harbor section.

Tower’s Section 111 reporting platform and management dashboard provides our reporting partners the tools necessary to identify Medicare-eligible claimants. Once eligibility is confirmed it is critical to use this information to report acceptance of ORM and/or TPOC. Tower MSA Partners stands ready to assist you with your questions and to provide necessary reports and overall guidance to ensure compliance.

Contact us if you are concerned that your current reporting platform may not protect you from penalties. An audit of your current Section 111 reporting data often reveals gaps in reporting which may lead to penalties.

Tower’s Chief Compliance Officer, Dan Anders, can be reached at daniel.anders@towermsa.com.

Fixed Percentage Option Now Available for Liability Settlements up to $10,000

September 29, 2023

Tower MSA Partners explains CMS Fixed Percentage Option for liability settlements up to $10,000.

The Centers for Medicare and Medicaid Services recently announced that the maximum settlement amount for use of the Fixed Percentage Option will increase from $5,000 to $10,000, effective 10/2/2023. The Fixed Percentage Option is available to the claimant in a liability settlement and allows them to agree to pay 25% of the total settlement amount to resolve Medicare’s recovery claim for conditional payments. The criteria for selecting this option are:

Your liability insurance (including self-insurance) settlement, judgment, award or other payment is related to an alleged physical trauma-based incident and;
The total settlement is for $5,000 (Note this amount will be raised to $10,000, effective October 2, 2023) or less.
You elect the option within the required timeframe and Medicare has not issued a demand letter or other request for reimbursement related to the incident.
You have not received and do not expect to receive any other settlements, judgments, awards, or other payments related to the incident.

This option benefits the injured person when Medicare conditional payments exceed 25% of the total settlement amount. For example, if Medicare has made conditional payments of $8,000 on a $10,000 total settlement, the claimant would pay only $2,500 to resolve them with the Fixed Percentage Option. On the other hand, if conditional payments are $800 on a $10,000 settlement, it is better to use the traditional repayment method with a proportional reduction for attorney’s fees and costs, if any.

Accordingly, it is essential for claimants and their attorneys to investigate Medicare conditional payments prior to settlement so that they can choose the best method for resolving Medicare’s interests.

More information on the Fixed Percentage Option can be found on the CMS website here.

Please contact Tower’s Chief Compliance Officer, Dan Anders, at daniel.anders@towermsa.com with any questions.

Premier Webinar: Amended Review MSA Provides Second Bite at the Apple

CMS now allows any previously approved MSA to have a one-time Amended Review. This means that CMS will consider a new MSA submission that may be lower or higher than the previously approved MSA. Essentially, it is a second bite at the apple for old MSAs that, for whatever reason–they were too high, or the injured worker was not ready to settle–weren’t utilized for settlement.

Tower is pleased to feature our Chief Compliance Officer, Dan Anders, who on Wednesday, October 4, at 2:00 PM ET, will address the following topics:

Criteria for an Amended Review MSA
Is an Amended Review MSA required?
Documentation to support an Amended Review MSA
Examples of Amended Review MSA submissions

Besides Amended Review MSAs, the webinar will also consider how MSA Re-Reviews can reduce MSA amount resulting from CMS counter-highers.

A Q&A session will follow the presentation, and you can provide questions when you register. Please click the link below and register today!

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

Register Here

CMS Hits ‘Reset’ Button With Workers’ Compensation Review Contractor Procedures and Request for Approval of Zero-Dollar Medicare Set-Aside Amounts

November 2, 2016

In an announcement distributed on November 1, 2016, CMS acknowledged the receipt of many inquiries from the MSP industry regarding procedural changes in the way CMS’s Workers’ Compensation Review Contractor (WCRC) reviews proposed zero-dollar Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) amounts. CMS further acknowledged that as a result of these inquiries, it has determined that changes had transpired without prior notification, and that effective immediately, the WCRC will utilize (the) procedures that were previously in effect, further noting that CMS continually evaluates all policy and procedures related to WCMSA reviews and will publish any pending changes when or before they go into effect.

Background

Prior to October, 2016, the Workers’ Compensation Review Contractor’s procedure with Zero Dollar WCMSAs in cases where evidence of a complete denial of the claim was handled as follows:

The carrier’s complete denial would be evidenced by
- a claim payment history documenting no payments for medical treatment and indemnity and
- a letter from the adjuster or defense attorney confirming such full denial.
The MSA must be submitted to CMS for approval PRIOR to obtaining a court-approved settlement.

When these conditions were met, the settlement would be recognized as a strict compromise and CMS would issue a determination letter staying no MSA is needed.

While CMS never published this procedure as an official policy in the WCMSA Reference Guide, the policy was exercised regularly and consistently. As such, Tower, as well as many other MSP companies, incorporated this “policy” into its standard CMS submission procedure for Zero WCMSAs for denied claims.

The October ‘Surprise’

Beginning in October, 2016, with no notice, CMS responses for denied claims took a complete 180 degree turn in terms of the WCRC’s review process. No longer was the carrier’s evidence of complete denial of the claim sufficient to obtain CMS’s approval of a Zero WCMSA.

When questioned regarding its rationale for this drastic change, CMS noted only that there was a ‘NEW‘ procedure being followed by the WCRC, and in order to obtain approval of a Zero WCMSA one of the following would be required:

A court ruling regarding the compensability of the claim; or,
Treatment records (i.e. a letter from the treating physician) which demonstrate/indicate that no further treatment for the alleged industrial condition(s) will be required.

Unfortunately for the industry, there was no advanced notice of the change in procedure, no documentation of the change and no explanation of CMS’s rationale for making such a drastic change. We, along with everyone else in our industry, basically learned about this through development letters and undesirable dialogue with WCRC & CMS representatives.

Industry Reaction and CMS’s ‘Reset’

As expected, companies reacted immediately, contacting CMS to request answers, and seeking to determine how WCMSAs currently being reviewed would be handled. Tower clients with cases pending with CMS were advised to wait to see if the case would be developed or if CMS would follow its original policies. If developed, the case could be withdrawn.

In an effort to further clarify, NAMSAP (National Alliance of MSA Professionals) also intervened on behalf of its constituent members to confirm why the change was made, to ‘demand’ the courtesy of notice, and to offer its expertise to assist CMS in setting future policy to simplify the process rather than creating confusion and chaos.

As a result of the avalanche of questions, concerns and complaints, CMS has now taken a very positive step back, announcing that it will revert to its original, established procedure for reviewing Zero WCMSA for denied claims until such time as it can analyze, define policy, establish review procedures, communicate to the MSP industry and provide ample notice.

What’s Next?

With today’s announcement that the WCRC will revert to its original procedure for reviewing Zero WCMSAs for denied claims, the industry can return to its internal policies for setting settlement strategy with a clear understanding of the review process that will be executed by CMS’s review contractor when evaluating Zero WCMSAs.

As a reasonable next step, NAMSAP has offered to serve as a resource to CMS to provide industry experiences, to identify the perceived impact of the WCRC’s shift in policy, and to open dialogue regarding both our goals and the unintended consequences of CMS’s shift in review practices. I trust CMS will consider this offer, and will engage in conversations that will lead to a seamless

Stay tuned….

CMS: Workers’ Compensation Medicare Set Aside Arrangements

Enhanced Portal Functionality for Final Conditional Payment Process

November 10, 2015

In its ‘What’s New’ section, CMS announced on November 9, 2015 that as part of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (the SMART Act), the MSPRP will be modified to include Final Conditional Payment (CP) process functionality by January 1, 2016. This new functionality will permit authorized MSPRP users to notify CMS that a recovery case is 120 days (or less) from an anticipated settlement and request that the recovery case be a part of the Final CP process.

When the Final CP process is requested, any disputes submitted through the MSPRP will be resolved within 11 business days of receipt of the dispute. Once all disputes have been resolved, and the case is within 3 days of settling, the beneficiary or their authorized representative will be able to request a Final Conditional Payment Amount on the MSPRP. Once calculated, this amount will remain the Final Conditional Payment Amount as long as:

The case is settled within 3 calendar days of requesting the Final Conditional Payment Amount, and
Settlement information is submitted through the MSPRP within 30 calendar days of requesting the Final Conditional Payment Amount.

How the NGHP recovery process works today

To understand the value of this announcement to simplify the final demand process, we need to revisit the recent changes in NGHP recovery and the new role of the Commercial Repayment Center (CRC).

Effective October 5, 2015, the CRC assumed responsibility for pursuing recovery directly from the applicable plan. Any recoveries initiated by the Benefits Coordination & Recovery Center (BCRC) prior to the October 2015 transition will continue to be the responsibility of the BCRC. The typical recovery case, where Medicare is pursuing recovery directly from the applicable plan, now involves the following steps:

1. Medicare is notified that the applicable plan has primary responsibility

Medicare may learn of other insurance through a Medicare, Medicaid, and SCHIP Extension Act (MMSEA) Section 111 report or beneficiary self-report. If Medicare is notified that the applicable plan is primary to Medicare, Medicare records are updated with this information.

2. CRC searches Medicare records for claims paid by Medicare

The CRC begins identifying claims that Medicare has paid that are related to the case, based upon details about the type of incident, illness, or injury alleged. The claims search will include claims from the date of incident to the current date. If a termination date for Ongoing Responsibility for Medicals (ORM) has already been reported, the CRC will collect claims through and including the termination date.

3. CRC issues Conditional Payment Notice (CPN) to the applicable plan

The CPN provides conditional payment information. It advises the applicable plan that certain actions must be taken within 30 days of the date on the CPN or the CRC will automatically issue a demand letter. This notice includes a claims listing of all items and services that Medicare has paid that are related to the case. It also explains how to dispute any items and services that are not related to the case. A courtesy copy of the CPN is sent to the beneficiary and beneficiary’s attorney or other representative. The applicable plan’s recovery agent will also receive a copy of the CPN if the recovery agent’s information was submitted on the applicable plan’s MMSEA Section 111 report or the applicable plan has otherwise appointed a recovery agent by submitting a written authorization to the CRC.

Note: If a beneficiary or his or her attorney or other representative reports a no-fault insurance or workers’ compensation situation before the applicable plan submits a Section 111 report, the applicable plan will receive a Conditional Payment Letter (CPL). The CPL provides the same information as a CPN, but there is no specified response timeframe. When this occurs, the applicable plan is encouraged to respond to the CPL to notify the CRC if it does not have ORM and will not be reporting ORM through Section 111 reporting or if the applicable plan would like to dispute relatedness.

4. Applicable plan submits a dispute

The applicable plan has 30 days to challenge the claims included in the CPN. The applicable plan may contact the CRC or use the Medicare Secondary Payer Recovery Portal (MSPRP) to respond to the CPN.

5. CRC issues recovery demand letter advising plan of monies owed to Medicare

The demand letter advises the applicable plan of the amount of money owed to the Medicare program and requests reimbursement within 60 days of the date of the letter. A courtesy copy of the demand letter is sent to the applicable plan’s recovery agent, the beneficiary and the beneficiary’s attorney or other representative. The demand letter includes the following:

The beneficiary’s name and Medicare Health Insurance Claim Number (HICN);
Date of accident/incident;
A claims listing of all related claims paid by Medicare for which Medicare is seeking reimbursement from the applicable plan; and
The total demand amount (amount of money owed) and information on administrative appeal rights.

If the CRC agrees with disputes submitted timely, unrelated claims will be removed from the case before the demand letter is issued. Please note that the demand letter may include related claims that Medicare paid after the CPN was issued. Relatedness disputes on all claims included in the demand letter may be addressed by submitting an appeal.

6. Applicable plan submits an appeal

An applicable plan has 120 days from the date the applicable plan receives the demand letter to file an appeal. Receipt is presumed to be within 5 calendar days absent evidence to the contrary.

7. Applicable plan submits payment

If the CRC receives payment in full, it will issue a letter stating that the specified debt has been resolved. The letter will also note that new cases may be created if the applicable plan maintains ORM or the CRC receives information on additional items or services paid by Medicare during the period of ORM.

Facilitating timely and more accurate final demands

Because the CRC retains the right to create new cases as long as the applicable plan maintains ORM, timely notification of a final settlement is extremely critical to terminate the recovery efforts of the CRC. We applaud the addition of CP process functionality to the MSPRP as a segue to real time information and data exchange, and a more predictable outcome.

With more timely submissions and a published timeline for the final demand, this new extension of the SMART Act will facilitate better accuracy, a better path to closure and fewer last minute surprises…. all good things for those who represent the settlement interests workers’ compensation and liability carriers.

Centers for Medicare and Medicaid Services (CMS) Advanced Notice of Proposed Rule Making

June 18, 2012

This advance notice of proposed rulemaking solicits comment on standardized options CMS has considered making available to beneficiaries and their representatives to clarify how they can meet their obligations to protect Medicare’s interest with respect to Medicare Secondary Payer (MSP) claims involving automobile and liability insurance (including self-insurance), no-fault insurance, and workers’ compensation when future medical care is claimed or the settlement, judgment, award, or other payment releases (or has the effect of releasing) claims for future medical care.

To be considered, comments regarding CMS-6047-ANPRM must be recieved on or before 5pm on August 14, 2012.

The primary purpose of this ANPRM is to respond to affected parties’ requests for guidance on “future medicals” MSP obligations, specifically, how individuals / beneficiaries can satisfy those obligations effectively and efficiently. Currently, individuals involved in certain workers’ compensation situations are able to use Medicare’s formal, yet voluntary, Medicare Set-Aside Arrangement (MSA) review process in order to determine if a proposed set-aside amount is sufficient to meet their MSP obligations related to “future medicals.” To date, Medicare has not established a similar process for individuals/beneficiaries to use to meet their MSP obligations with respect to future medicals” in liability insurance (including self-insurance) situations. CMS is soliciting comment on whether and how Medicare should implement such a similar process in liability insurance situations, as well as comment on the proposed definitions and additional options outlined later in this section. CMS is further soliciting suggestions on options they have not included later in this section. In its own words, CMS is most interested in the feasibility and usability of the outlined options and whether implementation of these options would provide affected parties with sufficient guidance.

Medicare is considering the options listed below in an effort to develop an efficient and effective means for addressing “future medicals.” Options 1 through 4 would be available to Medicare beneficiaries as well as to individuals who are not yet beneficiaries. Options 5 through 7 would be available to beneficiaries only. CMS is requesting comment on the feasibility and usability of all of the options, and also requests proposals for additional options for consideration.

The seven (7) proposed options include the following:

Option 1. The individual/beneficiarypays for all related future medical care until his/her settlement is exhausted and documents it accordingly.

The beneficiary may choose to govern his/her use of his/her settlement proceeds himself/herself. Under this option, he/she would be required to pay for all related care out of his/her settlement proceeds, until those proceeds are appropriately exhausted. As a routine matter, Medicare would not review documentation in conjunction with this option, but may occasionally request documentation from beneficiaries selected at random as part of Medicare’s program integrity efforts.

Option 2. Medicare would not pursue “future medicals” if the individual/beneficiary’s case fits all of the conditions under either of the following headings:

a. The amount of liability insurance (including self-insurance) “settlement” is a defined amount or less and the following criteria are met:

The accident, incident, illness, or injury occurred one year or more before the date of “settlement;”
The underlying claim did not involve a chronic illness/condition or major trauma;
The beneficiary does not receive additional “settlements;” andShow citation box
There is no corresponding workers’ compensation or no-fault insurance claim.

b. The amount of liability insurance (including self-insurance) “settlement” is a defined amountor less and all of the following criteria are met:

The individual is not a beneficiary as of the date of “settlement;”
The individual does not expect to become a beneficiary within 30 months of the date of “settlement;”
The underlying claim did not involve a chronic illness/condition or major trauma;
The beneficiary does not receive additional “settlements;” and
There is no corresponding workers’ compensation or no-fault insurance claim.

Option 3. The individual/beneficiary acquires/provides an attestation regarding the Date of Care Completion from his/her treating physician.

a. Before Settlement—When the individual/beneficiary obtains a physician attestation regarding the Date of Care Completion from his or her treating physician, and the Date of Care Completion is before the “settlement,” Medicare’s recovery claim would be limited to conditional payments it made for Medicare covered and otherwise reimbursable items and services provided from the Date of Incident through and including the Date of Care Completion. As a result, Medicare’s interest with respect to “future medicals” would be satisfied. The physician must attest to the Date of Care Completion and attest that the individual/beneficiary would not require additional care related to his/her “settlement.”

b. After Settlement—When the individual/beneficiary obtains a physician attestation from his or her treating physician after settlement regarding the Date of Care Completion, Medicare would pursue recovery for related conditional payments it made from the date of incident through and including the date of “settlement.” Further, Medicare’s interest with respect to future medical care would be limited to Medicare covered and otherwise reimbursable items and/or services provided from the date of “settlement” through and including the Date of Care Completion. The physician must attest to the Date of Care Completion and attest that the individual/beneficiary would not require additional care related to his/her “settlement.” CMS requests comment on the efficacy and feasibility of this option.

Option 4. The Individual/Beneficiary Submits Proposed Medicare Set-Aside Arrangement (MSA) Amounts for CMS’ Review and Obtains Approval.

Currently, CMS has a formal process to review proposed MSA amounts in certain workers’ compensation situations. Recently CMS has received a high volume of requests for official review of proposed liability insurance (including self-insurance) MSA amounts. This has prompted them to consider whether to implement a formal review process for proposed liability insurance (including self-insurance) MSA amounts. For more information related to workers’ compensation MSA process, please visit http://www.cms.hhs.gov/Medicare/Coordination-of-Benefits/WorkersCompAgencyServices/wcsetaside.html. CMS specifically solicits comment on how a liability MSA amount review process could be structured, including whether it should be the same as or similar to the process used in the workers’ compensation arena, whether review thresholds should be imposed, etc.

Option 5. The beneficiary participates in one of Medicare’s recovery options.

Recently, CMS implemented three options with respect to resolving Medicare’s recovery claim in more streamlined and efficient manners. Before a demand letter is issued, the beneficiary or his/her representative may participate in one of three recovery options, which allows the beneficiary to obtain Medicare’s final conditional payment amount before settlement. The three recovery options are as follows:

$300 Threshold—If a beneficiary alleges a physical trauma-based injury, obtains a liability insurance (including self-insurance) “settlement” of $300 or less, and does not receive or expect to receive additional “settlements” related to the incident, Medicare will not pursue recovery against that particular “settlement.”
Fixed Payment Option—When a beneficiary alleges a physical trauma-based injury, obtains a liability insurance (including self-insurance) “settlement” of $5,000 or less, and does not receive or expect to receive additional “settlements” related to the incident, the beneficiary may elect to resolve Medicare’s recovery claim by paying 25 percent of the gross “settlement” amount.
Self-Calculated Conditional Payment Option—When a beneficiary alleges a physical trauma-based injury that occurred at least 6 months prior to electing the option, anticipates obtaining a liability insurance (including self-insurance) “settlement” of $25,000 or less, demonstrates that care has been completed, and has not received nor expects to receive additional “settlements” related to the incident, the beneficiary may self-calculate Medicare’s recovery claim. Medicare would review the beneficiary’s self-calculated amount and provide confirmation of Medicare’s final conditional payment amount.

Each of the options is employed in such a way that Medicare’s interest with respect to future medicals is, in effect, satisfied for the specified “settlement.” Therefore, when a beneficiary participates in any one of these recovery options, the beneficiary has also met his/her obligation with respect to future medicals. CMS solicits comment on proposed expansions of these options and the justification for that proposed expansion, as well as any suggestions about how to improve the three options we recently implemented.

Option 6. The Beneficiary Makes an Upfront Payment.

CMS is currently considering two variations of an “upfront payment option.”

a. If Ongoing Responsibility For Medicals was imposed, demonstrated or accepted and medicals are calculated through the life of the beneficiary or the life of the injury.

If ongoing responsibility for medicals was imposed, demonstrated or accepted from the date of “settlement” through the life of the beneficiary or life of the injury, we may review and approve a proposed amount to be paid as an upfront lump sum payment for the full amount of the calculated cost for all related future medical care. This option would generally apply in workers’ compensation, no-fault insurance situations or when life-time medicals are imposed by law. In effect, this option may be used in place of administering a MSA if we have reviewed and approved a proposed MSA amount. CMS solicits comment on how to develop this process, the efficacy of it, and whether it would be utilized.

b. If Ongoing Responsibility for Medicals was Not Imposed, Demonstrated or Accepted.

If a beneficiary obtains a “settlement,” our general rule stated previously applies to the “settlement,” and ongoing responsibility for medicals has not been imposed on, demonstrated by or accepted by the defendant, the beneficiary may elect to make an upfront payment to Medicare in the amount of a specified percentage of “beneficiary proceeds.” This option would most often apply in liability insurance (including self-insurance situations, primarily due to policy caps. For the purposes of this option, the term “beneficiary proceeds” would be calculated by subtracting from the total “settlement” amount attorney fees and procurement costs borne by the beneficiary, Medicare’s demand amount (for conditional payments made by Medicare), and certain additional medical expenses the beneficiary paid out of pocket. Such additional medical expenses are specifically limited to items and services listed in 26 U.S.C. 213(d)(1)(A) through (C) and 26 U.S.C. 213(d)(2). The calculation of beneficiary proceeds does not include medical expenses paid by, or that are the responsibility of, a source other than the beneficiary. CMS specifically solicits comment on how to develop this process, its efficacy, and whether it would be utilized. CMS further requests comment on the calculation of beneficiary proceeds, the appropriate percentage(s) to be used, and how the percentage(s) is/are justified.Show citation box

Option 7. The Beneficiary Obtains a Compromise or Waiver of Recovery.

If the beneficiary obtains either a compromise or a waiver of recovery, Medicare would have the discretion to not pursue future medicals related to the specific “settlement” where the compromise or waiver of recovery was granted. If the beneficiary obtains additional “settlements,” Medicare would review the conditional payments it made and adjust its claim for past and future medicals accordingly. CMS specifically solicits comment on whether this approach is practical and usable, as it relates to “future medicals.”

We encourage you to read and evaluate each of the seven options as they relate to your business and settlement objectives and email us at info@towermsa.com with questions, feedback and suggestions. We will continue our due diligence as well, and will publish our thoughts as to the pro’s and con’s of each option. As noted, we have 60 days to respond with comments and recommendations.

Click here for the complete version of CMS-6047-ANPRM.

Coming Soon – The Medicare Secondary Payer Recovery Portal

May 17, 2012

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.