Medicare Archives

CMS Releases Statement Regarding Stakeholder Input in Liability MSA Review Process

October 27, 2017

CMS issued the following brief statement on their website this week:

The Centers for Medicare and Medicaid Services (CMS) continues to consider expanding its voluntary Medicare Set-Aside Arrangements (MSA) review process to include liability insurance (including self-insurance) and no-fault insurance MSA amounts. CMS will work closely with the stakeholder community to identify how best to implement this potential expansion of voluntary MSA reviews. Please continue to monitor this website for updates and announcements of town hall meetings in the near future.

Notably, very little information provided other than stating CMS will work with stakeholders before formalizing the expansion of the MSA review process to liability and no-fault. Based upon this statement, we can assume CMS will not spring the expansion on us, but give impacted parties an opportunity to comment before a final policy is put in place. Tower MSA will provide updates when further information is released by CMS or town hall meetings are scheduled.

New Commercial Repayment Center Contractor on the Horizon; WCRC Contract Protested

October 9, 2017

A recent press release from the Performant Financial Corporation announced it has been awarded the Commercial Repayment Center (CRC) contract by the Centers for Medicare and Medicaid Services (CMS). Barring a bid protest, we expect a transition to the new CRC contractor over the next few months (CGI Federal’s contract, the outgoing CRC contractor, appears to run through 1/8/2018).

CRC Responsibilities

The Commercial Repayment Center is responsible for identifying and recovering primary payments mistakenly made by the Medicare program when another entity had primary payment responsibility (otherwise known as conditional payments). While CGI Federal has had the responsibility for recovering from group health plans for several years, it has been recovering from non-group health plans, such as a liability insurer, no-fault insurer, or workers’ compensation entity, only since 10/1/2015.

As those of you who have had any dealing with the CRC know, communication with the CRC following that start date was often frustrating as a result of long turnaround times to receive conditional payment information and inconsistent and contradictory responses from CRC representatives. While communication with the CRC has definitely improved over time, CMS has nonetheless chosen not to renew their contract with CGI Federal. CMS’s reasons are unstated, but as we noted in a recent article, CMS Releases Annual Report on CRC Conditional Payment Recovery, conditional payment amounts recovered by the CRC on behalf of Medicare declined from 2015 to 2016, despite the expansion of CRC’s recovery efforts to non-group health plans.

Besides the CRC contract, Performant currently acts as a Recovery Audit Contractor (RAC) for Medicare’s fee-for-service program (Parts A and B). As a RAC, Performant identifies and corrects improper payments made to medical providers as a result of insufficient documentation to support the payment, payments made which do not meet CMS guidelines and payments made for services that are incorrectly coded.

Similar to the RAC contract, the CRC contract is paid on a contingency basis. Consequently, the CRC contractor has an incentive to recover as much as possible on behalf of CMS. Per the Performant press release, “at full scale, Performant anticipates staffing the program with over 250 dedicated employees operating out of Performant’s offices around the country.”

CMS contractor transitions (see below bid protest) usually do not go as smoothly as advertised, thus we will wait and see how effectively this new contractor takes on the role as the CRC. We will advise you of any important developments during to and subsequent to the contractor transition.

WCRC Contract Under Protest

In a 9/11/2017 article, CMS to Transition to New MSA Review Contractor, we detailed the awarding of the new $60 million, five-year contract, for the Workers Compensation Review Center (WCRC) to Capitol Bridge, LLC. Two of the unsuccessful bidders, Arch Systems, and Ken Consulting, have filed formal protests to the awarding of the contract to Capitol Bridge. The protests are to be resolved by 12/21/2017. It appears then that this will delay the transition to the new WCRC. We will keep you apprised of any notable news on the WCRC transition.

CMS to Transition to New MSA Review Contractor

September 11, 2017

On September 1, 2017, the Centers for Medicare and Medicaid Services (CMS) announced the awarding of the contract for the Workers Compensation Review Contractor (WCRC) to Capitol Bridge, LLC. The $60 million contract is for one-year with the option of renewing for an additional four years.

Since 2003, CMS has had in place the WCRC for the purpose of reviewing Workers’ Compensation Medicare Set-Aside (WCMSA) proposals submitted to CMS for review and approval. The WCRC evaluates these proposals and provides a recommendation to the designated CMS Regional Office (RO) as to whether the proposed MSA amount adequately protects Medicare’s interests. If the WCRC disagrees with the proposal it will provide an alternate recommendation, either higher or lower, than the proposed amount. The CMS RO usually accepts the recommendation from the WCRC and issues the approval letter to the submitter of the proposed MSA.

Provider Resources, Inc., has been the WCRC for the past five years. It is unclear based upon the available information when Capitol Bridge will take over from Provider Resources, although the solicitation for the WCRC contract provided for a three-month transition period.

Tower MSA Takeaways

It is important to note that while the review contractor may change, the policies in place to review WCMSAs are set by CMS, not the contractor. Consequently, we do not anticipate any significant change to how WCMSAs are reviewed and approved under the new contractor. Nonetheless, there are some recent changes to the WCMSA Reference Guide, such as the Amended Review process, which will fall largely on Capitol Bridge to implement (See article: Practical Implications of the Revised CMS WCMSA Reference Guide). Also, as we advised in another article, CMS MSA Review Expansion to Liability Planned for 2018, the new WCRC contract provides for an optional expansion of the WCMSA review process to liability claims as of 7/1/2018. At this time, it is uncertain whether CMS will choose to move forward with such an expansion as of that date.

Given our experience with other CMS contractor transitions we anticipate the new contractor will have a learning curve, which may result in longer turnaround times for MSA submissions and some responses inconsistent with the prior contractor’s reviews. Tower MSA will, if necessary, address with CMS any WCMSA approval falling outside of established CMS guidelines.

We look forward to working with Capitol Bridge over the coming months and years to provide for an effective WCMSA review and approval process that benefits all interested parties. Tower MSA will continue to provide any relevant updates as Capitol Bridge transitions to its role as the WCRC.

CMS Releases Annual Report on CRC Conditional Payment Recovery

September 5, 2017

On 8/30/2017 the Centers for Medicare and Medicaid Services released its annual report on the Commercial Repayment Center’s (CRC) Medicare conditional payment collections for the 2016 fiscal year (10/1/2015 through 9/30/2016). In short, the report documents the CRC identified $243.68 million in conditional payments, collected a net of $106.29 million and returned $88.35 million to the Medicare Trust Fund after subtracting collections costs.

The CRC, which is paid on a contingency basis, has responsibility for Medicare conditional payment recovery efforts involving Group Health Plans and Non-Group Health Plans (NGHP). NGHPs are liability insurance (including self-insurance, no-fault insurance or workers’ compensation). FY 2016 was the first fiscal year in which the CRC had responsibility for recovery of conditional payments from NGHPs, a task previously handled by the Benefits Coordination and Recovery Center (BCRC). Recovery claims involving Medicare beneficiaries remain with the BCRC.

A copy of the report may be found on the CMS website here.

Some observations from the report:

CMS does not split out GHP and NGHP recovery information which makes it difficult to ascertain, one, the effect of adding NGHPs to the CRC’s responsibility has had on overall collections and, two, the percentage of overall collections attributable to GHPs versus NGHPs.
Despite identifying $243.68 million on conditional payments, the CRC only recovered $117.40 million, shortly under half (48%) of the identified amounts. This may be the result of the provided data only documenting debts that are identified and collected within the fiscal year. The report indicates that collection of FY 2016 identified debts continues into the next fiscal year.
Connected to the above observation, it is disappointing that the CRC does not provide a more comprehensive multi-year view of its recovery work. Information such as amounts recovered over the past several years, average turnaround time from demand to repayment, and the above-mentioned GHP vs. NGHP data would be invaluable to understanding the overall program.
Provided in the report is a statement indicating amounts returned to the Medicare Trust Fund dropped from $125.05 million in FY 2015 to $88.35 million in FY 2016. CMS attributes the drop to “a decrease in GHP recoveries due in part to the maturity of the mandatory insurer reporting under Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 decreasing the instances of mistaken payments, as well as the CRC’s resolution of pending available recoveries.” This drop is nonetheless surprising given that FY 2016 marked the CRC’s first year recovering from NGHPs!

Takeaways

We do not recommend any changes to your Medicare conditional payment resolution program or process based upon the report. The report merely provides a window into the efforts by the CRC at recovering conditional payments from GHPs and NGHPs.

Practical Implications of the Revised CMS WCMSA Reference Guide

August 18, 2017

Earlier this month the Centers for Medicare and Medicaid Services (CMS) released a revised Workers’ Compensation MSA Reference Guide (WCMSA) (find Version 2.6 here) with several notable changes and additions impacting its review of MSAs in workers’ compensation cases. The Tower MSA compliance team has taken some time to review and consider not only the substantive impact these changes have on our processes, but the implications for our clients. Please find below a summary of the notable changes to the Reference Guide along with practical implications.

Recognition of a Hearing on the Merits of the Case (Section 4.1.4)

The relevant change to this section is as follows:

Because the CMS prices based upon what is claimed, released, or released in effect, the CMS must have documentation as to why disputed cases settle future medical costs for less than the recommended pricing. As a result, when a state WC judge or other binding party approves a WC settlement after a hearing on the merits, Medicare generally will accept the terms of the settlement, unless the settlement does not adequately address Medicare’s interests. This shall include all denied liability cases, whether in part or in full . . .

Practical Implications

Over the years CMS has had several definitions of under what circumstances it will recognize a hearing on the merits, but the takeaway has consistently been that CMS gives itself complete discretion as to whether or not it will recognize a particular judicial decision, order or finding as limiting the MSA. Some commentary in response to the Reference Guide revisions has indicated the changes found in this section will result in Zero MSAs based upon a complete claim denial no longer being approved without a hearing on the merits confirming the basis for the denial. We are not certain this is the correct inference to draw from this change. This section addresses the effect of a hearing on the merits of a case to the projection of future medical care. If there is no hearing on the merits of the case, which is the situation in most MSA submission, Zero MSA or otherwise, then this section should have no applicability to CMS’s review of a Zero MSA.

Tower MSA’s plan is to stay the course on the long-used criteria for a Zero MSA based upon a claim denial unless and until we identify any changes through the MSA submission process which requires modification to these criteria.

Recognition of State-Specific Statutes (Section 9.4.5)

The relevant change to this section as follows:

Submitters requesting alteration to pricing based upon state-legislated time limits must be able to show by finding from a court of competent jurisdiction, or appropriate state entity as assigned by law, that the specific WCMSA proposal does not meet the state’s list of exemptions to the legislative mandate. For those states where treatment is varied by some type of state-authorized utilization review board, the submitter shall include the alternative treatment plan showing what treatment has replaced the treatment in question from the beneficiary’s treating physician for those items deemed unnecessary by the utilization review board. Failure to include these items initially will result in pricing at the full life expectancy of the beneficiary or the original value of treatment without regard to the state utilization review board recommendation.

Practical Implications – State-Legislated Time Limits: Similar towards its policy on recognizing decisions stemming from hearings on the merits, CMS has consistently given itself complete discretion as to when it will recognize any state statute as providing a limitation on the medical care allocated in the MSA. Experience has shown CMS to be unwilling, under most circumstances, to recognize a state statute as having the affect of limiting medical care in the MSA. A notable example is the Georgia statutory provision limiting an employer’s responsibility for medical care to 400 weeks post the date of injury in non-catastrophic claims (applicable to cases with DOIs of 7/1/2013 and later). We have yet to see an instance where CMS has agreed to limit the MSA amount based upon this statute.

The changes to this section of the Reference Guide provide hope that CMS may be more open to recognizing state statutes, like Georgia’s, as a basis for limiting medical treatment and medications in the MSA. Unfortunately, the requirement “to show by a finding from a court of competent jurisdiction . . . that the specific WCMSA proposal does not meet the state’s list of exemptions to the legislative mandate” presents a challenge in attempting to use a statutory provision to limit the MSA. For example, in Georgia a workers’ compensation case is by default considered non-catastrophic unless accepted by the employer or carrier as catastrophic or the claimant’s attorney submits to the Georgia Workers’ Compensation Board a request for the claimant to be designated as catastrophic. It is unclear at this point whether confirming the non-catastrophic nature of the claim in board approved settlement documents or a separate finding by the board that the claim is non-catastrophic will be sufficient for CMS to recognize the limitation. Based upon our experience with similar types of issues, we expect CMS to require a specific finding separate and apart from the settlement documents. Accordingly, this will require settling parties, whether in Georgia or in other states, to work with their WC board, commission or other judicial authority to provide the necessary finding confirming the claim does not meet any of the exemptions to the statute.

Practical Implications – Utilization Reviews: Revisions to this section of the Reference Guide also address the use of URs to limit care in the MSA. According to the requirements delineated by CMS the following must be presented with the MSA submission:

UR denial pursuant “some type of state-authorized utilization review board.”
“Alternative treatment plan” from the treating physician showing what treatment has replaced the UR denied treatment or medications.

The addition of the language regarding URs raises more questions than it answers. What does CMS define as a UR Board? For example, the California Independent Medical Review (IMR) process, while statutorily created, does not include a UR review board (Although we believe it can be argued that the IMR process is equivalent to such a board). Further, CMS fails to define what would be considered an “alternative treatment plan.” It would seem that an intransigent treating physician could refuse to provide alternative treatment, thus resulting in inclusion of treatment or medications in the MSA denied through the UR process. It is unfortunate CMS added this “alternative treatment plan” requirement as it undermines the very reason a UR process is in place, namely to limit medical care based upon evidence-based treatment guidelines. As Tower MSA submits MSAs to CMS with UR denials we will provide further recommendations as to how CMS is defining a “UR board” and “alternative treatment plan.”

Addition of “Amended Review” to Re-Review Policy (Section 16.0)

As fully explained in the Tower MSA article of 7/12/2017, “Second Chance with MSA Approval!: New CMS Policy Allows for Review of a New MSA Post a Prior Approval,” CMS has introduced what is called an Amended Review process for cases meeting the following criteria:

Practical Implications: The Amended Review criteria presents an opportunity to have a second bite at the CMS MSA review apple when it comes to claims which despite having a previously approved MSA, failed to settle medical. It is important to note that the Amended Review process applies not only to MSA determinations resulting in counter-highers, but any MSA determination, approved as submitted or counter-lower, that meets the above-defined criteria. Please contact Tower MSA to discuss eligible claims.

Added Section on Required Resubmission (Section 16.1)

The addition to this section is as follows:

Where a proposed WCMSA amount has been closed due to inactivity for one year or more from the original date of submission, a full-file resubmission will be required.

Practical Implications: Previously a case closed for inactivity for one year or more would be reopened if the submitter provided the documentation in response to a Development Letter (The most common reason for case closure). CMS is now indicating solely providing the documentation in response to the Development Letter will be insufficient for them to reopen, instead a completely new MSA proposal and supporting documentation will be required. Tower MSA will advise when a case meets the criteria for filing a resubmission.

Additional MSA Administration Guidelines (Section 17.1)

The addition to this section is as follows:

Although beneficiaries may act as their own administrators, it is highly recommended that settlement recipients consider the use of a professional administrator for their funds.

Practical Implications: While not requiring professional administration, this is an acknowledgement by CMS of the difficulties a claimant may face on their own in administering an MSA. Tower MSA agrees with CMS on the benefits of professional administration and when requested by our client will provide MSA professional administration through our partner, Ametros.

Other less notable changes found in the Reference Guide apply to clarifying the order of jurisdictional precedence for MSA pricing, updating requirements for spinal cord stimulator pricing, updating off-label medication requirements, clarifying total settlement calculation guidelines and clarification of change of submitter requirements.

Final Comments: While we are pleased CMS is addressing the concerns expressed by Tower MSA and others in the MSP compliance field concerning a second chance at CMS review of an MSA and recognition of state statutory limitations on injury-related medical care, the real test will be in the coming weeks and months the affect these revisions have on the review of MSAs submitted to CMS for approval. Tower MSA continuously monitors these responses and will provide our clients appropriate guidance on the impact, or lack thereof, of these revisions and additions to the WCMSA Reference Guide.

Accuracy in Section 111 Reporting of ORM Vital to Avoiding Unnecessary Repayment Demands from Medicare

July 24, 2017

While the Commercial Repayment Center (CRC) has faced some valid criticism over the course of the past year and half in relation to its recovery efforts on behalf of the Centers for Medicare and Medicaid Services’ (CMS), not all problems start with the CRC. CRC’s recovery efforts are driven by the data employers, carriers and self-insured entities report to Medicare through the Section 111 Mandatory Insurer Reporting process. Chief among the data elements reported is acceptance of Ongoing Responsibility for Medicals (ORM) and the termination thereof. If this data is reported inaccurately or there is a failure to report required data, then the applicable plan may be faced with inappropriate recovery demands by the CRC.

Applicable Plan Reporting of ORM is the Catalyst for CRC Recovery Efforts

Since October 5, 2015, the CRC has had responsibility for the recovery of conditional payments where the insurer or employer (including self-insured entities) is the identified debtor, known in CMS terms as the “applicable plan.” The CRC learns of opportunities to recover through the Section 111 Mandatory Insurer Reporting process. In other words, the applicable plan is the catalyst for Medicare conditional payment recovery by its reporting of ORM.

The mandatory reporting provisions of the Medicare Secondary Payer Act require the applicable plan to report to Medicare in three instances – the acceptance of ORM, the termination of ORM and issuance of a Total Payment Obligation to the Claimant (TPOC), settlement judgment, award or other payment. In regard to ORM, two key data elements reported are the date responsibility for ORM is accepted and the accepted diagnosis codes. Once this information is reported the following actions are initiated by CMS’s contractors:

1. The BCRC, which handles Medicare coordination of benefits, should deny payment for medical bills submitted for payment in which the billed diagnosis codes match or is similar to the reported diagnosis codes.

2. The CRC identifies medical claims that Medicare has paid that it deems related to the reported diagnosis codes.

Upon the CRC identifying treatment related to the reported diagnosis codes, it will issue a Conditional Payment Notice (CPN) to the applicable plan which itemizes charges deemed related to the injury. The applicable plan has 30 days from the date on the CPN to dispute charges after which a Demand Letter will issue demanding repayment for the charges identified by the CRC. A Demand Letter provides 120 days from receipt of the letter for the applicable plan to appeal all or some of the charges or issue payment. If payment is not issued within 60 days of receipt, interest begins to accrue from the Demand Letter date.

Reporting Accurate Acceptance of ORM and Diagnosis Codes

The trigger for reporting ORM is a claimant identified as a Medicare beneficiary and the assumption of ORM by the applicable plan. ORM is reported when the applicable plan has made a determination to assume responsibility for ORM, or is otherwise required to assume ORM—not when (or after) the first payment for medicals under ORM has actually been made. Accordingly, the ORM acceptance date is typically the date of injury.

Along with the ORM acceptance date, at least one ICD-10 diagnosis code must be reported for the diagnosis that has been accepted on the claim (If more than one diagnosis has been accepted, then additional diagnosis codes are reported). While medical provider billing records are often used to determine ICD-10 diagnosis codes to report, these should be used as a starting point, not an ending point, in identifying the correct codes to report to Medicare.

Keep in mind that medical providers, and especially hospitals, will often insert into billing records any diagnosis reported to the provider, which are not necessarily the same diagnoses that are being accepted on the claim. Consequently, the person responsible for determining the correct ICD-10 diagnosis code to report, usually the claims handler, must make an independent determination, separate and apart from the medical provider, as to whether the particular diagnosis is being accepted on the claim. If the billing records do not properly represent what is being accepted, or if further diagnosis codes are required to better define what is accepted, then online ICD-10 resources are available to identify codes which correctly represent the accepted body parts and conditions.

Once ORM and the diagnosis codes are reported, ORM is generally not addressed again until the date of ORM termination. However, causally related diagnoses may change over time, either expanding or retracting depending upon the circumstances in the claim. Accordingly, it is important to update the reported ICD-10 codes as necessary over the course of the claim.

ORM Termination Key to Cutting Off Liability to Medicare

Once ORM is accepted, CMS claims the right to recover against the applicable plan through the date of ORM termination. As such, recovery efforts by the CRC may happen years after the ORM was first reported. Further, if there is failure by the applicable plan to terminate ORM when appropriate, then the plan may receive repayment demands from CRC for time periods in which it has no liability to pay for medical treatment. An applicable plan may terminate ORM through the Section 111 Reporting process under the following situations:

Settlement with a release of medicals

No fault policy limit reached

Complete denial of the claim

Statute of limitations has run or medical benefits have otherwise been exhausted pursuant to state law

Judicial determination after a hearing on the merits finding no liability

Statement from treating physician – signed statement from the injured individual’s treating physician that he/she will require no further medical items or services associated with the claim/claimed injuries.

Keep in mind that closing a claim file is not a trigger for ORM termination unless it is accompanied by one of the above situations.

Providing CMS with an ORM termination gives a bookend to recovery by the CRC. If no termination date is provided, then CRC assumes the applicable plan remains liable for injury-related payments.

Recommendations for Ensuring Accurate ORM Reporting

The reporting of ORM acceptance and termination and defining accepted diagnosis codes is so important because it is the applicable plan’s admission of responsibility to pay for medical care during the reported time period and for the reported diagnoses. If an error is made in reporting or there is an omission in reporting, then it can result in attempts by Medicare to recover for conditional payments unrelated to the injury or for time periods during which the applicable plan is not liable. Errors in reporting can also lead to inappropriate denials in the payment of claimant’s medical care by Medicare or Medicare paying for medical care for which the applicable plan is responsible.

Recommendations to avoid these errors and omissions:

1. Train Claims Handlers on ORM Reporting: If a claims handler is responsible for inserting the data required for ORM reporting, then they require training as to when ORM acceptance and termination is to be reported and how to determine the appropriate diagnosis codes to report with ORM acceptance.

2. Effective Quality Assurance of ORM Reporting: Even with training, errors will occur. Additional resources placed into quality assurance of ORM reporting, such as double-checking claims for proper ORM termination and appropriate diagnosis code choices avoids the expenditure of additional resources at a later date to correct errors in reporting and correction of unnecessary recovery demands from the CRC. If you are an employer or carrier relying upon a TPA to report, it is especially recommended that a QA process be in place to check the data entered by the TPA.

3. Ensure Reporting Platform is Accurately Reporting: Section 111 Reporting is electronically based and requires a data exchange with Medicare. Errors can and will occur in this data exchange. Ensure you have a trusted and reliable reporting agent to assist with accurate reporting to Medicare.

Finally, if any correspondence is received from the CRC or the U.S. Treasury Department claiming conditional payment recovery it must be acted upon immediately. Do not assume the letter was issued in error and will simply go away. If you do not believe you are liable for the conditional payments for which the CRC is claiming recovery, first confirm you have correctly reported ORM and then work with your MSP compliance partner to appropriately dispute the charges.

For questions stemming from this article please contact Dan Anders at (888) 331-4941 Daniel.anders@towermsa.com.

U.S. District Court Declares CMS Practice of Over-Inclusive Reimbursement Demands to be Unlawful, but Withholds Injunction

May 19, 2017

Earlier this year, Tower MSA summarized the California Insurance Guarantee Association’s (CIGA) case challenging the Centers for Medicare and Medicaid Service’s (CMS) practice of claiming conditional payment reimbursement on a charge which includes mixed diagnosis codes. Mixed diagnosis codes result in the charge including both treatment related and unrelated to the workers’ compensation injury. See Federal Court Holds Against Medicare Practice of Over-Inclusive Reimbursement Demands. In a further decision in this case issued on 5/3/2017 (Cali. Ins. Guar. Ass’n v. Price, No. 2:15-cv-01113-ODW (FFMx), 2017 U.S. Dist. Ct. LEXIS 67589), Judge Otis D. Wright, II, set-aside Medicare’s reimbursement claims against CIGA and issued a judicial declaration finding CMS’s practices pertaining to reimbursement unlawful, but stopped short of enjoining CMS from continuing these practices.

January Decision Finds in Favor of CIGA

The recent decision by the District Court follows an earlier 1/5/2017 decision from Judge Wright finding in favor in CIGA. Key findings were as follows:

First, the Court held that because Defendants simply withdrew the reimbursement demands without renouncing their allegedly unlawful policy, no part of CIGA’s claims were moot.

Second, insofar as CIGA sought simply to challenge CMS’s blanket practice of seeking reimbursement from primary plans for the full amount of a charge that contained uncovered diagnosis codes, CIGA met its burden simply by identifying codes that all parties agree are uncovered.

Third, the Court held that one statutory “item or service” does not as a matter of law equate to whatever medical procedure(s) are billed for in a single line-item charge on a payment summary form; rather, a statutory “item or service” simply refers to one indivisible medical item, device, medical supply, or service, regardless of how it is billed.

Fourth, in the event that a single line-item charge contains one covered “item or service” and one uncovered “item or service,” CIGA does not have a responsibility to make payment for the uncovered “item or service” just because it was lumped together with a covered “item or service.”

Finally, the Court also notes what it did not decide. The Court did not decide: (1) whether the cost of a single indivisible “item or service” must be apportioned among multiple diagnosis codes; or (2) whether each individual line-item charge in this lawsuit in fact consisted of multiple “items or services.”

As a result of the January decision CIGA was entitled to relief which the Court attempted, without success, to have CIGA and CMS resolve between themselves. Consequently, CIGA requested an order vacating CMS’s reimbursement claim of $119,122, a judicial declaration that CMS’s billing practice is unlawful and a permanent injection prohibiting CMS from sending future reimbursement demands to CIGA based on the unlawful billing practice.

An example of this practice is where a Conditional Payment Summary Form includes one line item representing multiple divisible treatments such as a physician visit where the services provided were for hypertension, a flu shot and low back pain. Only the low back pain is related to the work injury, but the charge listed on the Conditional Payment Summary Form is for all treatments, not just the low back pain.

Court Provides Judicial Declaration, but No Injunction Against CMS Practices

In response to CIGA’s request, the Court vacated CMS’s reimbursement claim of $119,122 and issued a judicial declaration that CMS’s billing practice is indeed unlawful. The Court refused though to enjoin CMS from these billing and reimbursement practices.

While the Court went into an extensive explanation as to why an injunction would not be warranted, in Judge Wright’s words it comes down to the following:

. . . the Court is not confident that it possesses a complete understanding of how determinations regarding the contents of a line-item charge are, can, or should be made, and the Court is not inclined to issue a broad judicial declaration that might ultimately require the parties to adopt an inefficient and unworkable reimbursement process going forward.

The Court went on to note that primary plans (carriers and employers) now have an administrative appeals process available to them (The five level appeals process put in place as a result of the SMART Act) to appeal reimbursement claims, rather than first seeking relief in federal court, as was done in this case.

While the Court declined to issue an injunction, it nonetheless agreed to set the case for a bench trial (9/12/2017 trial date set) to gather further facts, likely related to how a line-item charge may be separated into divisible treatments such that the injury-related treatment only can be claimed for reimbursement. Based upon a review of the evidence presented at trial, the Court will decide whether to issue an injunction.

Tower MSA Analysis: Court’s Decision Attempts to Balance the Interests of CIGA and CMS

The Court here is understandably trying to balance the interests of CIGA in not being forced to reimburse CMS for charges unrelated to the claimed workers’ compensation injury, against the interests of CMS in not having its reimbursement processes disrupted. If this case does go to trial, what Judge Wright will be looking for is a way to enjoin CMS from over-inclusive reimbursement demands without significantly impacting CMS’s ability to recover on legitimate claims.

Ultimately, this may prove difficult for the Court unless CMS steps up and agrees to work with its recovery contractors to better filter its claims for reimbursement such that one line item on a Conditional Payment Summary Form only includes treatment related to the claimed injury, workers’ compensation or otherwise. If CMS refuses to make these changes then the Court will either have to issue the injunction and force CMS’s hand or let the decision stand without the injunction. Even if an injunction is not issued, this case should be persuasive to other courts and hopefully CMS when it is cited in disputes and appeals of CMS reimbursement claims which contain mixed diagnosis codes.

Another question is whether depending upon the outcome of the trial, either party will appeal the District Court’s decision to the U.S. Court of Appeals. CIGA may appeal as a result of the lack of an injunction or CMS may appeal if an injunction is the result of the trial or based upon the judicial declaration regarding its billing and reimbursement practices. Tower MSA will continue to follow this important case and provide relevant updates.

Federal Court Holds Against Medicare Practice of Over-Inclusive Reimbursement Demands

February 13, 2017

The California Insurance Guarantee Association (CIGA) has prevailed in its lawsuit (Cali. Ins. Guar. Ass’n v. Burwell, No. 2:15-cv-01113-ODW (FFMx), 2017 U.S. Dist. Ct. LEXIS 1681) against the Centers for Medicare and Medicaid Service (CMS) challenging the practice of over-inclusive reimbursement demands by CMS. As a consequence of this ruling from the U.S. District Court for the Central District of California, claimants and employers, have judicial support to dispute charges which contain mixed diagnosis codes, some related to the workers’ compensation injury and some unrelated, in CMS’s conditional payment demands.

A summary of CIGA’s challenge to CMS, CMS’s response to the claim and the Court’s decision is detailed below with a discussion on practical implications of the decision.

CIGA’s Claim Against Medicare

CIGA claimed that CMS’s practice of seeking reimbursement for the full amount of a medical charge despite the charge including mixed diagnosis codes, some related to the workers’ compensation injury and some unrelated, goes beyond CMS’s authority under the Medicare Secondary Payer Act.

By way of background, medical providers include ICD-10 diagnosis codes within billing records that are supposedly associated with the treatment provided. However, it is commonly known that medical providers, especially hospitals, may add any and all diagnoses for which a claimant reports a medical condition, even if such condition is not the subject of the treatment on the bill. For example, a claimant who has a low back injury and seeks treatment at a hospital for a cardiac condition may report on an intake form that he has ongoing low back pain. The hospital may list a low back diagnosis code on the medical bill even though the incurred medical treatment is solely related to the cardiac condition. This is not to say that there may also be situations where actual treatment was received for the work-related injury, but, even then, it may represent only a portion of the overall charge.

As evidence to support its claim, CIGA presented three examples of recovery demands with mixed diagnosis codes. In one demand the Medicare conditional payment charge included a diagnosis code connected to the work-related back and hip injury, but other diagnosis codes relating to diabetes, insulin use and bereavement. In these cases, CMS issued a formal demand letter seeking recovery for the complete charge for both related and unrelated conditions. CIGA disputed on the basis that the charges “did not fall ‘within the coverage of an insurance policy of the insolvent insurer’” under California law.

CMS’s Response

The Court rejected all of CMS defenses as detailed below.

CMS withdrawing the demand is not a sufficient basis to dismiss the case

At some point following the initiation of CIGA’s lawsuit CMS “recalculated” its demands resulting in CMS effectively withdrawing the demands that were the subject of this litigation. CMS claimed that as the demands were withdrawn the case should be dismissed. The court denied the dismissal noting “Indeed, given the timing of the withdrawals (i.e., immediately after a hearing in which the Court made clear that CMS’s practice would not withstand scrutiny), it seems obvious that this is simply a strategic maneuver designed to head off an adverse decision so that CMS can continue its practice in the future.”

CIGA identifying unrelated diagnosis codes is a sufficient basis to shift the burden to Medicare

CMS disputed CIGA’s assertion that identifying the non-work related diagnosis codes is sufficient to shift the burden to Medicare to prove otherwise. The Court disagreed and held that it is sufficient to shift the burden to Medicare to prover otherwise, and further, that CMS never challenged CIGA’s claims that the diagnosis codes were unrelated.

CMS’s claim that the term “item and service” refers to the charge and not the treatment is unsupported

The Medicare Secondary Payer Act provides “a primary plan . . . shall reimburse [Medicare] for any payment made . . . with respect to an item or service if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service.” CMS regulations (42 CFR 1003.101) further define item or service “Any item, device, medical supply or service provided to a patient which is listed in an itemized claim for program payment or a request for payment . . . .”

CMS asserted the definition of “item or service” for which they are able to recover under their regulations refers to whatever (and how many) medical treatment(s) a provider lumps into a single charge. Not surprisingly, the Court found nothing under the statue nor the intent of Congress in writing the MSP Act to substantiate that “item or service” refers to the listed charge from the medical provider, rather than one medical treatment whether billed as a group with other treatments or listed singly.

CMS is bound by state law in determining whether the WC employer or carrier has responsibility to reimburse Medicare

CMS next argued that it is not bound by state law as state law is preempted under the MSP Act (Preemption refers to the principle that between federal and state law federal law trumps state law). The Court cited with approval a prior federal appellate court decision, Caldera vs. Ins. Co. of the State of Pa. 716 F.3d 861 (5th Cir. 2013) which addressed the question of whether CMS’s ability to recover is limited in anyway by state law. In Caldera the Court found “responsibility to make payment with respect to an item or service is generally a matter of state law.” Accepting then that CMS is held to state law in its ability to recovery, the judge in the present matter went on to cite several California state court decisions finding that a compensation carrier is not responsible for making payment on treatment unrelated to the workers’ compensation injury.

CMS is not entitled to deference in its interpretation of the MSP Act and regulations

The court rejected CMS claim of deference to its interpretation of the MSP Act and regulations since the Court found such an interpretation of CMS’s regulations actually supports CIGA and, further, its arguments conflict with CMS’s own MSP Manual which provides for medical providers to be reimbursed partially by a primary plan and partially by Medicare if work-related medical treatment is provided concurrently with non-work-related treatment.

Court Finds the Real Reason CMS Calculates in this Manner

The Court holds, “At bottom, it is quite clear that the real reason CMS calculates reimbursement demands in the manner that it does is simply because it is too difficult to do otherwise, not because that is what is required (or even permitted) by any statute, regulation, or policy manual.” According to the Court then, CMS must attempt to apportion the charge between covered and non-covered services. It is possible, as the court indicates, that CMS may find apportioning the charge unreasonable. The court further notes that if the charge is apportioned, it takes no position on how CMS should do so in terms of pro rata reimbursement, etc.

Practical Implications of Decision

Whether it is Medicare conditional payment recovery or Workers’ Compensation MSAs, CMS regularly asserts that it is not bound by state law in determining items or service for which it may seek recovery or to be included in the MSA. Further, CMS operates under an assumption that the courts will defer to its interpretation of the MSP Act and relevant regulations. At least in the Medicare conditional payment context, this decision completely refutes such assumptions. This is a well written decision which along with the holding in Caldera (mentioned above), is significant in finding that state law places limits on the extent of MSP conditional payment recovery. We applaud CIGA’s pursuit of this decision.

It should be noted that this is a U.S. District Court decision, not an appellate decision, thus it has limited precedential value for other cases addressing this same issue. Nonetheless, along with the Caldera case, which is an appellate decision, we now have two decisions which limit Medicare recovery. It is unclear at this point whether CMS will appeal the decision to the 9th Circuit Court of Appeals. A decision at that level would provide precedential value for all states within the 9th Circuit and would be on par with the Caldera case which was an appellate decision of the 5th Circuit.

The court does leave a door open for CMS in that CMS can determine whether it is unreasonable to separate a charge between related and unrelated. It is assumed though that CMS would have to provide evidence to support why it cannot reasonably separate the charges.

Tower MSA will utilize this important decision to support disputes of mixed diagnosis code conditional payment charges on behalf of our clients. Whether CMS will agree remains uncertain as this is a lower court decision and the decision itself still gives CMS the ability to determine whether it is reasonable to remove unrelated portions of a charge and how the remaining work-related amount of the charge should be apportioned. Tower MSA will continue to keep you apprised of any developments in this area of Medicare conditional payment recovery.

Removal of SSN from Medicare IDs Detailed in CMS Open Door Forum

January 23, 2017

On January 17, 2017, the Centers for Medicare and Medicaid Services (CMS) held a Special Open Door Forum to detail how the Social Security Number Removal Initiative (SSNRI) impacts the Medicare Secondary Payer (MSP) community. CMS’s explanation is summarized below with Tower MSA’s thoughts on the practical implications of this change.

SSNRI Explained

Presently, Medicare beneficiaries are assigned a Healthcare Insurance Claim Number (HICN) which generally includes either their or their spouses Social Security Number (SSN) followed by a letter, commonly an A or B. For the purpose of reducing identify theft involving SSNs, the Medicare Access and CHIP Reauthorization Act of 2015 included a provision requiring CMS to remove SSNs from all Medicare cards by April 2019.

In accordance with the Act, CMS announced that starting in April 2018 it will begin to issue what will be called Medicare Beneficiary Identifiers (MBIs) to replace the HICNs currently in use. MBIs will be 11-alphanumeric characters in length with letters only in uppercase. The MBIs will be assigned to approximately 60 million current Medicare beneficiaries and 90 million deceased/archived Medicare beneficiaries. CMS targets completion of the assignment of MBIs by April 2019.

CMS advised there will be significant outreach to Medicare beneficiaries, medical providers, and other stakeholders, such as the Medicare Secondary Payer community, prior to implementation of this change.

CMS has a dedicated website regarding the SSNRI which may be found here.

SSNRI Impact on MSP Compliance

In regard to Medicare Secondary Payer compliance processes, the MSP compliance community currently exchanges data with CMS through Section 111 Mandatory Insurer Reporting, the Medicare Secondary Payer Recovery Portal (MSPRP) and the Workers’ Compensation Medicare Set-Aside Portal (WCMSAP). CMS made the following statements concerning the SSNRI’s impact on this exchange of information:

• Fields presently identified as HICN will be retitled “Medicare ID.”
• As the HICN fields currently accept 11 characters there will be no expansion of these fields as a result of the implementation of MIBs.
• SSNs can continue to be used for querying whether a particular claimant is a Medicare beneficiary through the Section 111 Reporting process and for communication through the MSPRP and WCMSAP.
• Use of partial SSNs will continue to be permitted for querying Medicare eligibility.
• After April 2018 the CMS response to a Section 111 query will either provide the HICN or the MBI, depending upon whether the particular Medicare beneficiary has been issued an MBI.
• Outgoing documentation through the MSPRP or WCMSAP will include the HICN or MIB, depending upon what was most recently reported. For example, if an MSA is submitted to CMS for review through the WCMSAP and contains a HICN, then the response from CMS will include the HICN. On the other hand, if an MIB is submitted, then the CMS response will include the MIB.

Treasury Department to No Longer Include Medicare ID

Also announced during the forum is an impending change by the Treasury Department to no longer include the HICN (or the MIB when it becomes active) in its correspondence stemming from Medicare conditional payment recovery. Instead, the Treasury Department will only list the Case Recovery ID that has been assigned to the case by either the Benefits Coordination and Recovery Contractor (BCRC) or the Commercial Repayment Center (CRC). This change is expected to occur before the end of 2017.

Practical Implications

An important takeaway from CMS’s explanation of the SSNRI is that for MSP compliance purposes we can continue to use SSNs in communicating with CMS and its contractors. What we should recognize is that as of April 2018 besides SSNs, claimants may be providing MIBs rather than HICNs. Further, it should be recognized that the Section 111 query process may return an MIB, rather than an HICN, starting in April 2018.

Our Tower MSP Automation Suite will seamlessly transition to recognition and reporting of MBIs for Section 111 Reporting purposes starting in April 2019. We do recommend to our clients that they confirm their internal claims database will be fully capable of recognizing the MBIs when they become active for Medicare beneficiary claimants.

Finally, the Treasury Department’s removal of any Medicare beneficiary identifier from its conditional payment recovery correspondence may present some difficulty to workers’ compensation, liability and no-fault plans in identifying the particular claimant from which the demand stems. Tower MSA will work with our clients to address any uncertainty, but we also recommend to our clients that they work with us to actively resolve Medicare conditional payments on open and settling claims such that these demands never are referred to the Treasury Department.

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

Managing Chronic Pain in Older Adults

April 8, 2014

According to the ACPA (American Chronic Pain Association) Resource Guide to Chronic Pain Management, “persistent or chronic pain is prevalent in older adults.”

“Nearly one third of all prescribed medications are for patients over the age of 65 years. More than thirty percent of hospital admissions among the elderly may be linked to an adverse drug related event or toxic effect from opioids and sedatives. Unfortunately, many adverse drug effects in older adults are overlooked as age-related changes (general weakness, dizziness, and upset stomach) when in fact the patient is experiencing a medication-related problem. In addition, some older individuals may be more sensitive to medications, more likely to experience side effects, and more likely to be using multiple drugs with the associated risk of interactions between the drugs.”

Workers’ Comp Implications

For those who manage workers’ compensation claims, these statistics should highlight the importance of a consistently executed decision making paradigm when authorizing prescription medications for older patients.

Before approving a new pain medication for an elderly injured worker, confirm that the initial dose is being prescribed at the lowest possible strength and frequency.
When increases are requested, approve only those changes to strength and frequency that are adjusted slowly to optimize pain relief.
When possible, confirm that the patient is monitoring and managing his / her own side effects.

When dealing with less dangerous treatment options for injuries in the elderly population, potential treatment options include:

Use of multiple drugs together – Careful use of multiple drugs is potentially advantageous as the combination of smaller doses of more than one medication may minimize the dose-limiting adverse effects of using a particular single drug.
Alternatives to pharmacologic treatment – As an alternative to prescription drugs, physical rehabilitation and other interventional therapies, including targeted injections and acupuncture, can be helpful to minimize side-effects and maximize physical function with pain relief

Triggers For Potential Concern

Pain management in the elderly is a unique challenge. Beyond the normal concerns of addiction and overuse, those who authorize treatment in a workers’ compensation claim for an older worker must also compare the potential dangers associated with the side effects of the medication against its promised value. Triggers that may warrant intervention for an older injured worker include:

Opioid treatment that continues for more than 90 days post injury / surgery
An increase in the strength or frequency of an opioid prescribed more than 90 days post injury / surgery
A request to change from an orthopedic or other specialist to a pain management specialist more than 90 days post injury/surgery
A decrease in opioid drug use followed by a request for a new treating physician
The appearance of a long acting opioid medication following continued use and/or an increase in dosage of a short acting opioid more than 60 months post injury

Identify, Intervene and Remain Involved

By peeling back the onion one layer at a time, questions can be raised, physicians can be challenged and evidence based treatment guidelines can be used to confront the status quo. The first step is to ask your workers’ comp PBM to identify claims that meet your triggers. Once identified, intervene with the treating physician either directly, or through a formal peer review. Once intervention is complete, remain involved until changes are complete.

When preparing for settlement, it’s critical to work with an MSA partner who will serve as gatekeeper to identify the same triggers and intercept problem claims before the MSA is prepared. Working hand in hand, positive outcomes can be achieved for the elderly. The process is simple. Consistent execution is the key.

For more information on medical and pharmacological issues related to pain management in the elderly population, I encourage you to review the publications made available by the American Geriatrics Society (http://www.americangeritrics.org). For questions related to pain management issues related to Medicare Set Asides, email us at info@towermsa.com.