Enhanced Portal Functionality for Final Conditional Payment Process

November 10, 2015

workers compensation educationIn 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:

  1. The case is settled within 3 calendar days of requesting the Final Conditional Payment Amount, and
  2. 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.

 

Medicare Advantage Plans – A New Layer in the Conditional Payment Process?

November 8, 2012

Over the past few years, much has been written about the mandatory reporting requirements associated with MMSEA Section 111 and the increased interest in ensuring that Medicare is reimbursed for any conditional payments made for a workers’ compensation injury.   Unfortunately, under this same backdrop of focused attention on recovery, very little, (i.e. no) attention has been given to the unique issues raised when settling a case with a Medicare beneficiary who receives Medicare Part D benefits, or is enrolled in a Medicare Advantage (MA) plan. This changed overnight when, On June 28, 2012 in the case of In re Avandia Marketing, Sales Practices and Products Liability Litigation, 2012 WL 2433508, the Third Circuit Court of Appeals became the first Circuit Court to recognize that a Medicare Advantage Plan has a private cause of action under the Medicare Secondary Payer Act (“MSP”).  So what are the recovery rights of MAP’s and how do we make certain the interests of both the payer and Medicare are appropriately considered when settling a case with a Medicare beneficiary who is enrolled in such a plan?

Background

In 1980, Congress enacted the Medicare Secondary Payer (MSP) statute in an effort to reign in the burgeoning costs of the Medicare program. Under the MSP statute, Medicare makes “conditional” payments, and Medicare has a right of reimbursement if it determines that a third-party primary payer bore responsibility for those payments. 42 U.S.C. § 1395y(b)(2)(B) (2006). The MSP also created a private cause of action to enforce the right to recover payments made by Medicare that are the responsibility of a primary plan. 42 U.S.C. § 1395y(b)(3)(A).

In 1997, Congress created Part C of the Medicare law, now known as the Medicare Advantage program, as an alternative to the traditional Medicare program under Parts A (hospital insurance) and B (medical insurance). MAP’s are offered by private companies and provide all coverage provided by Medicare Part A and Part B and typically offer additional coverage, such as vision, hearing, dental, etc. MAP’s are essentially Medicare HMOs operated by private insurers. The statute creating these plans contains an independent secondary payer provision, which references but does not fully adopt or incorporate the MSP statute. 42 U.S.C. § 1395w-22(a)(4).

Enacted in 2007, the Medicare, Medicaid, and State Child Health Insurance Program (SCHIP) Extension Act (MMSEA) expanded the ability of the federal government to recover sums owed under the MSP statute by imposing strict reporting requirements and penalties for noncompliance. 42 U.S.C. § 1395y(b)(7), (b)(8). Under MMSEA section 111, all insurers as well as self-insurers, collectively referred to as “responsible reporting entities” (RREs), must report information regarding payments made to Medicare beneficiaries and other data to ensure proper coordination of benefits with the Medicare program. 42 U.S.C. § 1395y(b)(7)(A); 42 U.S.C. § 1395y(b)(8)(A). This reporting requirement applies irrespective of whether the beneficiary is enrolled in traditional Medicare or in a MA plan.

What Are the Recovery Rights of MAP’s

Medicare conditional payments are a potential cost that must be considered in any claim involving a Medicare beneficiary.   Medicare has the right to be reimbursed, and the power to enforce that right, under the Medicare Secondary Payer Act (MSPA) to the extent that Medicare has already paid for injury related medical treatment.   What some do not appreciate, however, is that the conditional payments referenced in the standard Conditional Payment Letter from the Medicare Secondary Payer Recovery Contractor (MSPRC) are only those that have been made under Medicare Part A (inpatient and some outpatient care) and Part B (physician’s fees, therapy, durable medical equipment, etc.), sometimes referred to collectively as “traditional Medicare”.   MSPRC presently does not track, and does not attempt to recover, those payments that have been made under Part C (Medicare supplemental plans) or Part D (drug coverage) and very often these other payments are quite substantial.

Part D payments are made by private insurers, and third party pharmacy suppliers, approved by, and under contact with, Medicare and Part C payments are made by private insurers who have been approved by Medicare to write policies that cover items that are either not covered by Medicare under Parts A and B (this is Medicare supplementary coverage) or which replace traditional Medicare completely and which provide additional medical benefits as well.  These Part C comprehensive plans are known as Medicare Advantage Plans (MAP’s) and the insurers or sponsors are referred to as Medicare Advantage Organizations (MAO’s). It should be noted that some, but not all, MAP policies also replace Part D coverage.

While there is a general agreement that MAP’s have a contractual right to seek recovery of expenses paid to a Medicare beneficiary, the existence of a private right of action to enforce that claim in federal court under the MSP statute has been less straightforward. MAP’s contend that they have rights as a secondary payer under the MSP statute to seek recovery of paid expenses. Beneficiaries and primary payers, on the other hand, contend that the MSP statute does not confer a private cause of action on MAP’s. Prior to 2012, federal district court cases lend support to the position that MAP’s do not have a private right of action to enforce their reimbursement rights under the MSP statute; instead leaving MAP’s to enforce their rights as secondary payers under state contract law. However, the more recent Third Circuit of Appeals opinion In re: Avandia Marketing, Sales Practices and Products Liability Litigation, 2012 WL 2433508 (6th Cir. 6/28/12) marks a departure from earlier decisions and will no doubt create uncertainty and debate surrounding the reimbursement rights of MAP’s going forward.

Third Circuit Opinion–In re: Avandia Marketing, Sales Practices and Products Liability Litigation

In In re: Avandia Marketing, Sales Practices and Products Liability Litigation, No. 11-2664, 2012 WL 2433508 (3rd Cir. 6/28/12), the Third Circuit Court of Appeals held that a MAP has a private right of action under the MSP to recover payments it has made that are the responsibility of a primary plan. In doing so, the court reversed the district court, which had dismissed the claims of the involved MAP on the basis that the MSP does not grant a MAP a private right of action to enforce its rights as a secondary payer.

In sum, the Third Circuit found that MAP’s have the same recovery rights as traditional Medicare based on a plain reading of the MSP statute, given the legislative history and policy goals of the Medicare Advantage program, and considering due deference owed to Medicare’s interpretation of the MSP statute and related regulations.

Tower MSA Partners – Proactive in Pursuit of Resolution

Regardless of whether an injured worker / plaintiff received Medicare benefits through a MAP or traditional Medicare, compliance with MMSEA Section 111 MIR mandates that the responsible reporting entity report the settlement to CMS. This reporting obligation is separate and distinct from a MAP’s recovery rights under the MSP statute.  In addition, Primary payers may not be aware that during a March 22, 2012 teleconference call, CMS stated that they are now sharing MMSEA Section 111 Data with MAP’s.  Therefore, MAP’s are now armed with settlement information concerning Medicare beneficiaries in the same manner as traditional Medicare.

Today, about 13.3 Million People are enrolled in Medicare Advantage Plans. There are close to 50 million Medicare beneficiaries, so more than 1 in 4 is on a Medicare Advantage Plan compared to traditional Medicare. Furthermore, Medicare Advantage Plans are gaining members – almost 10% more enrollees over the last year. In terms of Part D Prescription Plans, the number of enrollees for 2012 is estimated it to be around 10.6 million. There are approximately 1,041 plans available from both traditional and Medicare Advantage Plans to choose from.

From a practical standpoint, the Avandia decision creates several challenges.

  1. How are Medicare’s interests protected in a Medicare Advantage case? Is the primary plan now exposed to repeat double damage claims any time the Part C or Part D plan makes payment that was part of a settlement? It would appear that an approved Liability Medicare Set Aside Arrangement (LMSA) would help, but rules are still yet to be developed by Medicare.
  2. Will the Medicare Advantage Plan negotiate or hold at 100% recovery rate? Now more than ever, we have an important reason to support Hadden v. U.S.
  3. How will Medicare contractor enhancements, such as the $300 exemption, Fixed Payment Option, or Self Calculate Option work in this arena? It is unknown, as MAP’s do not use Medicare contractors to pursue its recovery.

While these questions remain, Tower MSA Partners recognizes and will pursue conditional payments from MAP’s based on the following understanding:

  1. Tower MSA Partners will assist clients in recognizing a Medicare Advantage Plan and its demand letters.
    1. MAP demands are issued from the MAP directly, i.e., if the MAP is Humana, the demand will be issued on Humana letterhead.  This is unlike traditional Medicare conditional payment demands which are issued directly from CMS and on MSPRC letterhead.
    2. Forward all demand letters from MSPRC, as well as from any MAP or Part D provider when presented.
  2. Tower MSA Partners will be proactive in determining whether a MAP demand exists.
    1. Request enrollment/benefit history from claimants/plaintiffs prior to settlement.  As a Medicare beneficiary can move between traditional Medicare (Part A & B) and Medicare Advantage (Part C), the parties will need to clear both Medicare and Medicare Advantage, including Part D, for every case.
    2. Contact both MSPRC and MAP for conditional payment information.
    3. Follow the same protocols as are in place with traditional Medicare conditional payments to satisfy the interest of the MAP

Proactively addressing the claims of MAP’s in this manner will relieve much of the uncertainty surrounding their reimbursement rights.  For questions regarding conditional payment lien negotiations, MAP’s and Medicare Part D recovery, please contact Tower MSA Partners @ info@towermsa.com.