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Congress Holds Hearing on Medicare Secondary Payer Problems

Yesterday, June 22, 2011, the Oversight and Investigations Subcommittee held a hearing to examine the Medicare Secondary Payer (MSP) System.

In his opening statement, Congressman Cliff Stearns (R-FL), the subcommittee chairman responsible for calling the hearing, spoke of serious delays in obtaining conditional payment information from CMS.  He mentioning widespread complaints that, “CMS is creating unnecessary roadblocks”, “that CMS is not providing this [conditional payment] information in a constant or timely manner”, and that these delays “cause lawsuits to drag on, hinders timely payments to injured individuals, and causes uncertainty and increased costs for both large and small businesses”.   Congressman Stearns went on to say that when parties are “anxious to pay the federal government, and they can’t get a complete or timely response about how much they owe, the system is badly broken.”

Concerning Medicare Set-Asides (MSAs) , Congressman Stearns said that CMS may not know when an MSA has been “improperly spent on unrelated, non-medical expenses”.

After additional opening remarks by Congressman Fred Upton (R- MI), Chairman of the Committee on Energy and Commerce, additional panelist presented their statements followed by a discussion:

Panel I

Ms. Deborah Taylor
Director of Financial Management,
Centers for Medicare and Medicaid Services

Mr. James Cosgrove
Director, Health Care
Government Accountability Office

Panel II

Mr. Marc Salm
Vice President, Risk Management
Publix Super Markets, Inc.

Mr. Scott Gilliam
Vice President
Cincinnati Insurance Company

Mr. Jason Matzus
Partner
Raizman Frischman & Matzus, P.C.

Ms. Deborah Taylor, from CMS, emphasized the importance of the MSP law by saying that it has saved the Medicare Trust Funds over $50 billion over the last decade.    Interestingly, she said, “any restrictions on existing MSP rights or recovery processes would adversely affect savings that would otherwise accrue to the Medicare Trust Funds through MSP recovery activities”.   She said that the new Non Group Health Plan (NGHP) Mandatory Insurer Reporting process established by Congress has resulted in significant additional recoveries for the Medicare Trust Funds.

Mr. James Cosgrove from the Government Accountability Office provided a 16 page paper that described the MSP process in detail.

The second panel all testified to serious problems in the MSP process including:

  • The need for CMS to provide the conditional payment amount before settlement
  • The need for a threshold below which MSP will not apply
  • Eliminate the required use of Social Security numbers in MSP Mandatory Insurer Reporting
  • Adding more customer service phone lines for MSPRC
  • Allow safe harbors and discretion for $1,000 per day MSP MIR penalties
  • Consider ways to control errors where the MSP system is wrongfully denying beneficiary coverage for unrelated claims

It’s very encouraging that this hearing took place that highlights the many of the current problems with the MSP process.   Congressman Stearns put it well when he said that said that the system is certainly broken when interested parties who want to pay Medicare can’t find out how much they owe in a timely manner.   Lets hope that Congress can fix some of these MIR and conditional payment problems.

Congress and CMS also need to realize that billions of dollars are being lost because of problems with MSAs, such as that liability MSA procedures are not clear, and that most claimants are not capable of managing MSA funds themselves in accordance with the complex rules required by CMS.  Perhaps those issues should be the subject of the next hearing.

To see the agenda, opening statements and witness statements click here.

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