Tag: LMSA

NAMSAP Bulletin Highlights Meeting with CMS on Liability MSA Reviews

August 16, 2018

man holding transparent icons of people with stakeholder in the center

Recently, the National Alliance of Medicare Set-Aside Professionals (NAMSAP) released a Special Edition Bulletin providing insight into a meeting between CMS and NAMSAP representatives on the topic of the planned expansion of the Workers’ Compensation MSA review process to liability MSA Reviews.  NAMSAP’s April 2018 meeting was one of several with stakeholder organizations.

Your writer was one of the NAMSAP representatives who had the privilege of meeting with CMS to hear and discuss how such a Liability MSA Reviews may work.   Mr. Tom Stanley, the Co-Chair of NAMSAP’s Liability Committee provided a summary of the following meeting highlights in the bulletin:

  • CMS stated they have an 18-month timeframe (from April 2018) before it rolls out a LMSA Review program.
  • The program would be voluntary.
  • CMS has indicated that their enforcement mechanism is the denial of services.
  • CMS felt strongly that the injured party must receive something (free and clear) through settlement.
  • CMS would not review an LMSA until Settlement has been reached.
  • CMS feels a LMSA is exclusively the responsibility of the plaintiff.
  • Regarding LMSA’s, CMS made it clear that the defendant(s), and their insurers, are not a target.
  • Medicare pricing of services was discussed.
  • CMS does not feel it can mandate professional administration.
  • CMS would publish a LMSA Reference Guide.
  • Eligibility remains the same as the current WCMSA system – Medicare beneficiaries or injured parties who have a reasonable expectation of Medicare eligibility within 30 months. Per statute, Medicare’s interest must be considered in every claim.
  • A workload threshold of $250,000 is anticipated – “NO SAFE HARBOR”. This level mirrors the $25,000 workload threshold for WCMSA’s.
  • For settlements between $250,000 and $750,000 threshold, CMS approval is available and encouraged by CMS. CMS would apply “a formula” to determine the LMSA amount. Starting with the total settlement amount, CMS would subtract certain expenses and apply the discount factor to total settlement.
  • Above $750,000 level is a full commutation. A traditional MSA would be prepared and, if submitted to CMS, evaluated by CMS for adequacy.

As Mr. Stanley advised, “everything discussed in the meeting was subject to change and related to liability Medicare Set-Asides only.”  I would like to emphasize that point as well.  You should not in anyway take the above points as final, rather they are points of discussion as CMS continues to listen to stakeholders and assess the best method for protecting Medicare’s interests in post-liability settlement injury-related medical.

Importantly, CMS realizes that in protecting those interests an eventual voluntary LMSA review process must continue to provide an incentive for the parties to settle their case.   Consequently, some type of apportionment to ensure the plaintiff receives a portion of the settlement monies is expected in any final review process.

NAMSAP will to continue to dialogue with CMS and also discuss with its membership, both through a webinar and at the annual conference, the points presented by CMS.  Given the launch of a CMS LMSA review process is not expected for some time, Tower MSA Partners will shortly be releasing a white paper on best practices for addressing future medicals in liability settlements.

If you have any questions or would like to discuss the topic of LMSAs further, please contact Dan Anders, Chief Compliance Officer, at 888.331.4941 or Daniel.anders@towermsa.com.

Related:

Liability Settlement Solutions

CMS Provides Another Piece of the Puzzle on Future LMSA Policy

March 2, 2017

While the Centers for Medicare and Medicaid Services (CMS) has yet to formally issue a policy regarding review of Liability Medicare Set-Asides (LMSAs), since a June 2016 announcement that it was considering expanding the WC MSA review process to liability and no-fault, CMS has nonetheless provided pieces of the puzzle which will ultimately make up a liability and no fault MSA review process. The most recent piece of the puzzle is an announcement by CMS that effective 10/1/2017, no Medicare payments are to be made to medical providers where a Liability Medicare Set-Aside (LMSA) or No-Fault Medicare Set-Aside (NFMSA) exists.

The announcement comes via the issuance of a CMS MLN Matters article directed to physicians and other medical providers submitting claims to Medicare Administrative Contractors (MACs) for services to Medicare beneficiaries. It directs these MACs to deny payment for medical care that is covered under an LMSA or NFMSA as identified in the Common Working File (CWF).

To clear up some of these technical terms, MACs process Medicare Part A and B payments to medical providers on behalf of Medicare. A Common Working File (CWF) is maintained by the CMS Benefits Coordination and Recovery Center (BCRC) and contains information on a particular claimant’s Medicare eligibility and, importantly, when Medicare should be considered secondary such that payment to a medical provider should be denied and directed instead to the primary plan.

BCRC presently keeps records of all WCMSAs that have been approved by CMS and funded through settlement (This is why CMS requires final settlement documents be submitted to BCRC post-settlement). The WCMSA funding information is placed in the CWF so that the MACs deny payment for medical care associated with the WCMSA until the WCMSA is exhausted. This directive from CMS makes this same process applicable to LMSAs and NFMSAs.

In response to this announcement, you would be correct in asking, how can CMS deny payment for medical care based upon an LMSA an NFMSA process that does not yet exist? Putting aside that some CMS Regional Offices have reviewed and approved LMSAs at their own discretion for quite some time, this does pose a very good question. CMS responds as follows:

CMS will establish two (2) new set-aside processes: a Liability Medicare Set-aside Arrangement (LMSA), and a No-Fault Medicare Set-aside Arrangement (NFMSA).

So CMS readily admits the new set-aside processes will be put in place at some point in the future. Such future date has already been tentatively set based upon CMS’s release, in December 2016, of its request for proposals for the new Workers Compensation Review Contractor which includes an optional provision to expand reviews to LMSAs and NFMSAs effective July 2018 (See prior blog post: CMS MSA Review Expansion to Liability Planned for 2018). Consequently, this directive to the MACs is implementing medical payment processing changes which will be required to be place once the LMSA/NFMSA review process is made available.

It is important to keep in mind that CMS has yet to release any guidance on such an expansion of the WCMSA review process to liability and no-fault and particularly how such a process would differ from that created for WC. Also note that CMS does not state that effective 10/1/2017 the MACs are to deny payment for all post-liability settlement injury-related medical care, rather, they are to “deny payment for items or services that should be paid from an LMSA or NFMSA fund.” The funds must exist for denial to occur. Accordingly, over 2017, as more pieces of the puzzle come together on CMS’s Liability and No-Fault MSA review policy, Tower MSA will provide further interpretation and guidance on what will be one of the most significant developments in MSAs since CMS formalized the WC MSA review process in 2001.

CMS MSA Review Expansion to Liability Planned for 2018

January 4, 2017

We are not even a week into 2017, but already have news to share regarding Medicare’s planned expansion of its Workers’ Compensation MSA review process to liability in 2018. In its recently released Request for Proposal for the Workers Compensation Review Contractor (WCRC), the Centers for Medicare and Medicaid Services (CMS) includes an option allowing CMS to expand the responsibilities of the WCRC to review of Liability Medicare Set-Asides (LMSAs) and No-Fault Medicare Set-Asides (NFMSAs) effective July 1, 2018.

The CMS WCRC RFP Solicitation may be viewed here.

Background on CMS Review of MSAs

Since 2001 CMS has had in place an official voluntary review process for Worker’ Compensation Medicare Set-Asides (WCMSAs). A WCMSA, as CMS states, is a “financial agreement that allocates a portion of a workers’ compensation settlement to pay for future medical services related to the workers’ compensation injury.” The purpose of the review then is “to independently price the future Medicare-covered medical services costs related to the WC injury, illness, and/or disease and to price the future Medicare covered prescription drug expenses related to the WC injury, illness and/or disease thereby taking Medicare’s payment interests appropriately into account.”

These WCMSA reviews were initially handled by the CMS Regional Offices spread throughout the country, but eventually transitioned to a centralized WCRC in 2005 (The CMS Regional Offices must still approve the review recommendation of the WCRC before it is released to the WCMSA submitter). CMS’s RFP solicitation for the new WCRC contract indicates the contract is to be awarded by June 30, 2017 with a contract term running for five years from July 1, 2017 to June 30, 2022.

Expectations for Liability MSA Reviews

Presently, CMS allows its 10 Regional Offices to accept voluntary requests for review of LMSAs at each office’s discretion. Some Regional Offices have consistently refused to review any LMSAs while other offices agree to review based upon criteria that seemingly changes over time and bears no indication that it is indeed the official policy of CMS. It appears then that just as it did in 2005 when CMS took the responsibility away from the Regional Offices for reviewing WCMSAs, CMS is now considering centralizing the process of reviewing LMSAs with a contractor, leaving the Regional Offices to only approve of the contractor’s recommendations.

Some may recall CMS launched a prior initiative to establish a formal policy for consideration of future medicals in liability settlements when it issued an Advanced Notice of Proposed Rulemaking in 2012. This initial effort was ultimately withdrawn by CMS in 2014. CMS’s new initiative began with this June 9, 2016 notice on the CMS website:

The Centers for Medicare and Medicaid Services (CMS) is considering expanding its voluntary Medicare Set-Aside Arrangements (MSA) amount review process to include the review of proposed liability insurance (including self-insurance) and no-fault insurance MSA amounts. CMS plans to work closely with the stakeholder community to identify how best to implement this potential expansion. CMS will provide future announcements of the proposal and expects to schedule town hall meetings later this year. Please continue to monitor CMS.gov for additional updates.

No town hall meetings were scheduled in 2016, however, based upon this RFP indicating LMSA reviews will not begin until at least July 1, 2018, CMS has given itself 18 months to develop and implement a formal LMSA review policy. In terms of how many liability settlements such a review process would impact, CMS seems uncertain. A Statement of Work attached to the RFP indicates “reviews could represent as much as 11,000 additional cases (based on all FY2015 NGHP demands), or as little as 800 additional cases annually, depending upon industry response.”

Tower MSA Takeaways

Over the past 15 years, starting with the formalized review of WCMSAs, continuing with the implementation of Section 111 Mandatory Insurer Reporting and recent stepped up efforts at denying injury-related medical care and recovery of conditional payments for medical care related to workers’ compensation, liability and no-fault claims, CMS has expanded its enforcement under the Medicare Secondary Payer Act. It is not surprising then that CMS’s next objective is formalizing a voluntary review process for LMSAs.

It has been our experience that when CMS does implement new policy and procedures it does take a deliberative approach evidenced by the at least 18-month timeframe signaled with this RFP to expand the MSA review process to liability and no-fault. Our expectation then is over the next 18 months or longer, CMS will provide additional announcements concerning the rules and procedures around expansion of the review process.

Tower MSA will be involved in these discussions and will keep you abreast of relevant developments. In the interim, there remain important obligations of parties to liability settlements and no-fault claims under the Medicare Secondary Payer Act. Rest assured that you can rely upon Tower MSA’s team of MSP compliance experts for consultation and expert guidance in liability and no-fault matters.

If you have any questions, please contact Tower MSA Partners, Chief Compliance Officer, Dan Anders, at (847) 946-2880 or daniel.anders@towermsa.com

CMS to ‘Consider’ Expanding Its Review Process to Include Liability MSAs

June 10, 2016

In a News Alert released Thursday, June 9, 2016, the Centers for Medicare and Medicaid Services (CMS) announced is considering expanding its voluntary Medicare Set-Aside Arrangements (MSA) amount review process to include the review of proposed liability insurance (including self-insurance) and no-fault insurance MSA amounts. CMS plans to work closely with the stakeholder community to identify how best to implement this potential expansion. CMS will provide future announcements of the proposal and expects to schedule town hall  meetings later this year.

The link to the alert can be found in the ‘What’s New’ section of the Medicare Coordination of Benefits and Recovery Overview page at CMS.gov.

https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview/Whats-New/Whats-New.html

Background

Signed in June, 1980,

42 U.S.C. §1395y(2)(A)) prohibits Medicare from making payment, except as provided in (B), for any item or service, to the extent that payment has been made, or can reasonably be expected to be made, under a workers’ compensation law or plan, an automobile or liability insurance policy or plan (including a self-insured plan), or no fault insurance.

42 U.S.C. §1395y(2)(B) – The Secretary may make payment under this title with respect to an item or service if a primary plan as described in Subparagraph (A) has not made or cannot reasonably be expected to make payment with respect to such item or service promptly. Any such payment shall be conditioned on reimbursement to the appropriate Trust Fund in accordance with the succeeding provisions of this subsection.

While statutory provisions included Liability cases, there were no LMSA guidelines .  As a result, actions taken to comply with the MSPA statutes in a Liability case ranged from extremely conservative to strategies that earned the LMSA environment its characterization as ‘The Wild West’.  Those who took the conservative route followed the CMS guidelines established for WCMSA.  Other strategies ranged from making the LMSA decisions based on the severity of the injury in a liability case to doing nothing.

CMS’s Review of LMSAs

With no established thresholds for CMS submission and review, those who took the conservative path followed WCMSA guidance and attempted to submit.  While certain of the CMS offices would review an LMSA, acceptance was random.  Eventually, with greater acceptance and use of the WCMSA portal, CMS began to reject LMSAs.  Submitters could make the effort to submit and obtain a letter of rejection.

While not a ‘safe harbor’, the attempt to submit was at least evidence of efforts to follow the guidelines.

CMS’s first attempt to address LMSAs

In June 2012, CMS began the process by releasing an Advanced Notice of Proposed Rulemaking (CMS-6047-ANPRM) to solicit public comment on how to implement an MSP process for liability settlements.  The ANPRM received many public comments.

On August 1, 2013, CMS sent the NPRM to the OMB for their approval.  The NPRM was never made public because the OMB did not approve it, and on 10/8/2014, this last attempt at  ‘guidance’ surrounding Liability MSAs faded into the sunset whenCMS withdrew the NPRM.   The reasons for the OMB’s rejection of the proposal were never made public.

Where are we now?

With the Liability TPOC mandatory reporting threshold of $1,000 beginning January 1, 2015 (and the voluntary threshold of $300), the BCRC now has access to more data on Liability claims than ever.  And with the announcement of the CRC (Commercial Repayment Center) in October, 2015, and its singular focus on payer recovery, the BCRC has greater resources to pursue recovery with Liability settlements.  With this combination of information and resources, it would follow that the absence of documented evidence to show that Medicare’s interests have been considered when settling a liability claim might lead to financial exposure for all stakeholders in the process…. the perfect time to introduce ‘guidance’ for the LMSA.

Tower will continue to monitor associated news on this topic and will actively participate in the TownHall Meetings regarding this topic.

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.