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CLASSIC LIST

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06/Apr/2022

On Wednesday, April 13 at 1 pm EST, the Centers for Medicare & Medicaid Services (CMS) will host a webinar regarding the new “Go Paperless” option in the Medicare Secondary Payer Recovery Portal.  The Go Paperless Quick Reference Guide can be downloaded here.  The full notice can be read below:

 


The Centers for Medicare & Medicaid Services (CMS) will be hosting an overview of the new “Go Paperless” feature available in the Medicare Secondary Payer Recovery Portal (MSPRP). Insurers and authorized agents may now choose to opt-in to paperless functionality. Once registered, users will be able to quickly and easily access all recovery correspondence including demand letters, using the MSPRP. Opting to “Go Paperless” in combination with the ability to submit correspondence through the MSPRP and the multiple available options for electronic payment will allow your organization to not only reduce the amount of paper that needs to be physically handled, associated workload and environmental impacts, but also eliminate concerns about delays that can arise when information is sent through the mail.
The webinar will feature opening remarks and a presentation, followed by a question and answer session.
Date: Wednesday, April 13, 2022
Time: 1:00 PM ET
Webinar URL: https://www.mymeetings.com/nc/join.php?i=PWXW2662768&p=6930242&t=c
and
Conference Dial In: 800-779-1251
Conference Passcode: 6930242
Please note that for this webinar you will need to access the webinar link and dial in using the information above to access the visual and audio portion of the presentation. Due to the number of participants please dial in at least 15 minutes prior to the start of the presentation.

 

Additional information about recent updates from CMS can be found here. If you have questions on how topics discussed in this webinar may affect your clients, please contact Medivest here or call us at 877.725.2467.


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24/Mar/2022

The Centers for Medicare & Medicaid Services (CMS) released a revised Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (“Reference Guide”) Version 3.6 on March 15, 2022. This Reference Guide replaces Version 3.5 on January 10, 2022. There are a few notable changes when comparing the two Reference Guides.  The blue highlights below indicate the updated changes provided in Reference Guide Version 3.6.
To download the new WCMSA Reference Guide v3.6 click here.
Version 3.6 of this guide includes the following changes:
Clarification has been provided regarding the use of non-CMS-approved products to address future medical care (Section 4.3), as well as documentation and re-review tips (Sections 9.4.1.1, 10.2, and 16.1).

 

4.3 The Use of Non-CMS-Approved Products to Address Future Medical Care – Additions and Replacements

A number of industry products exist for the purpose of complying with the Medicare Secondary Payer regulations without participation in the voluntary WCMSA review process set forth in this reference guide. Although not inclusive of all products covered under this section, these products are most commonly termed “evidence-based” or “non-submit.”
42 C.F.R. 411.46 specifically allows CMS to deny payment for treatment of work-related conditions if a settlement does not adequately protect the Medicare program’s interest. Unless a proposed amount is submitted, reviewed, and approved using the process described in this reference guide prior to settlement, CMS cannot be certain that the Medicare program’s interests are adequately protected. As such, CMS treats the use of non-CMS-approved products as a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement.
As a matter of policy and practice, CMS may at its sole discretion deny payment for medical services related to the WC injuries or illness, requiring attestation of appropriate exhaustion equal to the total settlement as defined in Section 10.5.3 of this reference guide, less procurement costs and paid conditional payments, before CMS will resume primary payment obligation for settled injuries or illnesses, unless it is shown, at the time of exhaustion of the MSA funds, that both the initial funding of the MSA was sufficient, and utilization of MSA funds was appropriate. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount.
Notes: This official policy shall apply to all notifications of settlement that include the use of a non-CMS-approved product received on, or after, January 11, 2022; however, flags in the Common Working File for notifications received prior to that date will be set to ensure Medicare does not make payment during the spend-down period.
CMS does not intend for this policy to affect any settlement that would not otherwise meet review thresholds. This comment does not relieve the settling parties of an obligation to consider Medicare’s interests as part of the settlement; however, CMS does not expect notification or submission where thresholds are not met. 

 

9.4.1.1 Most Frequent Reasons for Development Requests – Expanded Explanations

The five most frequent reasons for development requests by the WCRC:
    1. Insufficient or out-of-date medical records. Medical records are required documents for all submissions, including situations where the parties are in dispute.
    2. Insufficient payment histories, usually because the records do not provide a breakdown for medical, indemnity or expenses categories. Payment histories are required documents for all submissions, including situations where the parties are in dispute, and must include breakdowns for payment categories along with identification of any category codes.
    3. Failure to address draft or final settlement agreements and court rulings in the cover letter or elsewhere in the submission. Draft or final settlement agreements and court rulings are required documents for all submissions, if they exist. For settlements where conditional payments are made as an element of the agreement, the WCRC will not accept a letter indicating that draft or final settlements do not exist.
    4. Documents that are referenced in the file are not provided—this usually occurs with court rulings or settlement documents.
    5. References to state statutes or regulations without providing sufficient documentation (i.e., to which payments the statutes/regulations apply or a copy of the statute or regulation, or notice of which statutes or regulations apply to which payments).

 

10.2 Section 10 – Consent to Release Note – Additions

The Consent to Release note is the claimant’s signed authorization for CMS, its agents and/or contractors to discuss his or her case/medical condition with the parties identified on the authorization in regard to the WC settlement that includes a WCMSA. When you submit your WCMSA, you are required to include the signed consent, plus any applicable court papers if the consent is signed by someone other than the claimant (for example, a guardian, power of attorney, etc.). Do not include unsigned consents or consents to obtain medical records from a provider.
All consent-to-release notes must include language indicating that the beneficiary reviewed the submission package and understands the WCMSA intent, submission process, and associated administration. This section of the consent form must include at least the beneficiary’s initials to indicate their validation.
Consent to Release documents must be signed (by hand or electronically) with the full name of either the claimant, matching the claimant’s legal name, or by the claimant’s authorized representative, if documentation establishing the relationship is also provided. It must be a full signature, not just initials. For electronic standards, only the use of an E-SIGN Act-compliant e-signature or initials are considered valid.
If there is a change in submitter, please see Section 19.4 for more information.

 

16.1 Re-Review – Additions

A request for re-review may be submitted based one of the following:
    1. Mathematical Error: Where the appropriately authorized submitter or claimant disagrees with CMS’ decision because CMS’ determination contains obvious mistakes (e.g., a mathematical error or failure to recognize medical records already submitted showing a surgery, priced by CMS, that has already occurred), or
    2. Missing Documentation: Where the submitter or claimant disagrees with CMS’ decision because the submitter has additional evidence, not previously considered by CMS, which was dated prior to the submission date of the original proposal and which warrants a change in CMS’ determination.
      • Disagreement surrounding the inclusion or exclusion of specific treatments or medications does not meet the definition of a mathematical error.
      • Re-Review requests based upon failure to properly review already submitted records must include only the specific documentation referenced as a basis for the request.
      • Should no change be made upon response to a re-review request (i.e. no error was identified), additional requests to re-review the same error will not be entertained.”

 

Analysis

The removal of the reference to indemnification in the first part of Section 4.3 seems to have been CMS’s way of expressing its realization that the intent of settling parties in using non-submit WCMSAs is to protect Medicare’s interests as opposed to being designed merely to protect against MSP exposure via a shift of risk from one company’s errors and omissions coverage to another’s.
[Old Section 4.3 phrase]: “with the intent of indemnifying insurance carriers and CMS beneficiaries against future recovery for conditional payments made by CMS for settled injuries.” [New Section 4.3 phrase]: “for the purpose of complying with the Medicare Secondary Payer regulations without participation in the voluntary WCMSA review process set forth in this reference guide.”
Does the additional language about expectations for WC settlements that do not meet workload review threshold in Section 4.3 now really clarify what the plan for future care should be when the two examples in Section 8.1, titled Review Thresholds still describe recoveries by CMS for payments and care related to the injury up to the total value of the settlement if the settling parties fail to consider Medicare’s future interests/fail to establish “some plan for future care” ?  The referenced examples are listed below for ease of access:
Example 1: A recent retiree aged 67 and eligible for Medicare benefits under Parts A, B, and D files a WC claim against their former employer for the back injury sustained shortly before retirement that requires future medical care. The claim is offered settlement for a total of $17,000.00. However, this retiree will require the use of an anti-inflammatory drug for the balance of their life. The settling parties must consider CMS’ future interests even though the case would not be eligible for review. Failure to do so could leave settling parties subject to future recoveries for payments related to the injury up to the total value of the settlement ($17,000.00).
Example 2: A 47 year old steelworker breaks their ankle in such a manner that leaves the individual permanently disabled. As a result, the worker should become eligible for Medicare benefits in the next 30 months based upon eligibility for Social Security Disability benefits. The  steelworker is offered a total settlement of $225,000.00, inclusive of future care. Again, there is a likely need for no less than pain management for this future beneficiary. The case would be ineligible for review under the non-CMS-beneficiary standard requiring a case total settlement to be greater than $250,000.00 for review. Not establishing some plan for future care places settling parties at risk for recovery from care related to the WC injury up to the full value of the settlement.

 

Stay Up To Date

Count on Medivest to help you navigate your risk tolerance in light of the new CMS WCMSA Reference Guide language to see if we can’t find the right balance to reasonably protect Medicare’s interests in your settlement. Medivest will continue to monitor changes in the guidance and regulations published by CMS and will keep its readers up to date when such changes are announced/made. For questions regarding these updates, please reach out to a Medivest representative in your area by clicking here or by calling us direct at 877.725.2467.


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23/Feb/2022

On November 16, 2021, the State of California’s Medicaid Agency, the Department of Health Care Services (DHCS or Medi-Cal), issued an All County Welfare Directors Letter (ACWDL or Letter) number 21-26 as a memo to all counties and people who administer various state based benefits, including all Medi-Cal Program Specialists/Liaisons.
The Letter provides clarification on Medicare Set-Aside (MSA) funds, as defined by CMS in the Workers’ Compensation realm. The primary message is that “MSAs, also called Workers’ Compensation Medicare Set-Aside Arrangement Accounts (WCMSA), are not countable as income and property on the basis of their unavailability when determining an individual’s eligibility for Medi-Cal.”
This can be significant for several reasons outlined in the Takeaways section.  Traditionally, an injured party that was otherwise eligible for need based benefits would be advised by their attorney to have a 1st Party Special Needs Trust of some type (individual or Pooled Trust – together referred to here as an SNT) established to help assure the eligibility of those benefits at that time or in the future.  However, there may be times when the cost of establishing such an SNT might be cost prohibitive compared to the value of the benefits to be protected.

Summary

The Letter describes that because the funds in the MSA account are to be used for their intended purpose, covering the costs of future medical needs [that are injury related and Medicare covered], they should be considered unavailable income and not countable when determining an individual’s eligibility for Non-Modified Adjusted Gross Income (MAGI) programs. However, the Letter indicates that it is important to note that interest or dividends generated by the interest-bearing account should be considered available income for MAGI eligibility determination.
The Letter explains that MSAs had previously been determined to not be countable as property pursuant to a previous All County Welfare Directors letter numbered 90-01 from 1990.  “MSA funds are considered unavailable property under ACWDL 90-01 (January 5, 1990), Section 50402 of that letter.”
The Letter also provides guidance to California counties on MSAs regarding:
    • MAGI eligibility
    • Non-MAGI eligibility concerning:
      • Property
      • Income
    • Tasks that are County responsibilities
    • Tasks that are NOT County responsibilities
The full ACWDL 21-26 Letter with additional details and information is available here.

Takeaways

  • This Letter does not discuss settlements that exceed the WCMSA amount. Settlements that exceed the WCMSA amount meaning they exceed the injury related Medicare covered medical items, services, and expenses reasonably expected for the injured party and that are paid outside the WCMSA, might disqualify the injured party from Medi-Cal benefits.
  • The Letter also does not discuss that the injured party’s need based benefits may be jeopardized if the injured party moves to another state without taking steps to address the eligibility of the new state’s Medicaid benefits via the use of an SNT within the required time frame to afford such protection.
  • The information in this Letter may come in handy for certain cases where the cost of a SNT is a prohibitive factor that would affect whether a smaller Workers’ Compensation settlement could proceed.
  • The letter does not make it clear how Medi-Cal would view a liability MSA (LMSA), i.e., an MSA allocation report and arrangement for administration pursuant to the settlement of a liability case.
  • As always, you should consult with an attorney licensed in the state where the settlement occurs (as well as disclose to the injured party to consult with an attorney specializing in the protection of need based benefits for the state where the settlement occurs and in any state they plan to move to ahead of their move) to confirm their rights, their entitlement to any specific benefits, and so that they understand that state need based benefit eligibility varies and other states’ laws likely do not afford this same protection.
Count on Medivest to help guide you through some of the complexities associated with Workers’ Compensation and liability settlements that involve some evaluation of Medicare Secondary Payer Act (MSP) compliance, when you are not sure whether a Medicare Set-Aside arrangement should be utilized, or when need based benefits are in the picture or may be in the injured party’s future.

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08/Feb/2022

On Thursday, February 17 at 1 pm EST, Centers for Medicare & Medicaid Services (CMS) will host a webinar regarding Workers’ Compensation Medicare Set-Aside (WCMSA). The full notice can be read below:


 

CMS will be hosting a webinar to discuss a variety of WCMSA topics, including a summary of what’s new in Medicare set-asides, and addressing questions related to the inclusion of treatments, application of state rules, re-reviews/amended reviews and more. The webinar format will be opening remarks and a presentation by CMS followed by a live question and answer session with representatives from CMS.

Date: Thursday, February 17, 2022
Time: 1:00 PM ET

Webinar URL: https://www.mymeetings.com/nc/join.php?i=PWXW2628369&p=6930242&t=c

and

Conference Dial-In: 800-779-1251
Conference Passcode: 6930242

Please note that for this webinar you will need to access the webinar link and dial in using the information above to access the visual and audio portion of the presentation. Due to the number of participants please dial in at least 15 minutes prior to the start of the presentation.


 

Additional information about recent updates from CMS about WCMSAs can be found here. If you have questions on how topics discussed in this webinar may affect your clients, please contact Medivest here or call us at 877.725.2467.

 


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03/Feb/2022

1. Section 4.3 of the new WCMSA Reference Guide does not constitute new policy at CMS or new risk for settlement stakeholders. The WCMSA Reference Guide has for a long time maintained the same position on and response to submission and non-submission of MSAs that meet the submission threshold. It is, however, the first time CMS has specifically referenced MSA products branded as “evidence-based” or “non-submit” and given an opinion on those products.

2. CMS is communicating its concern that MSAs specifically designed to forego the submission/approval process may inadequately consider Medicare’s interest. While it is reasonable for CMS to maintain such a concern, the assumption that any MSA not approved by CMS is inadequate is problematic and contradictory to their position on MSAs that do not meet review thresholds. And submission/approval for MSAs that do meet review thresholds is still voluntary.

3. The party with the most to lose is the beneficiary. The primary consequence referenced in 4.3 is denial of payment for the beneficiary’s injury-related care in the event of MSA exhaustion. CMS says it will continue to deny payment until the entire net settlement has been fully spent down (not the total MSA amount). This could occur in events of permanent exhaustion or during temporary exhaustion periods when the beneficiary’s MSA is exhausted until the next funding payment is received. Keep in mind that this doesn’t apply to MSAs that do not meet the review threshold. Also, there is an appeal process for denial of payment. But the greatest risk-bearer is the applicant.

4. Since MSA exhaustion represents the greatest risk to the applicant, a program of proper funds administration is preferable. A burden shift to Medicare can only occur once Medicare becomes the primary payer. A MSA that remains solvent will maintain Medicare’s payment position as secondary indefinitely. While it is impossible to foresee every expense that a MSA may incur over an applicant’s lifetime, a properly funded MSA in the hands of a competent administrator is the best protection of the interests of both Medicare and the applicant.

5. Thoughtful consideration should be given to the adequacy of an evidence-based or non-submit program. It is entirely possible to produce a fully adequate and reasonable MSA without CMS’s review and approval. However, not all products are created equally. It’s important to be confident that the methodology in use produces MSAs that consider Medicare’s interests sufficiently.

6. The best indemnification is a reasonable MSA properly administered. CMS mentions indemnification in their 4.3 language. Many MSA vendors pair specific indemnification language with their non-submit products. The purpose of the indemnification language is to provide stakeholders with a layer of protection for bypassing CMS approval. Those stakeholders will want to pay special attention to any loopholes that condition any protection on the behavior of the beneficiary. Thoughtfully consider indemnification language before going the non-submit route. And as mentioned in #4 above, much of the risk produced by not submitting MSAs to CMS is mitigated by properly written MSAs administered by a competent professional.

Recommendation

Section 4.3 of the latest WCMSA Reference Guide does not produce anything particularly new. Still, it’s important to cover all the bases. For maximum avoidance of risk, submit MSAs to CMS for review that meets the review threshold. If submission is not palatable, it is still possible to write fully adequate MSAs that reasonably consider Medicare’s interests. The important questions to ask are: 1) Does the writing methodology stand on its own apart from CMS submission, rather than taking advantage of the lack of oversight to unreasonably shave costs? 2) If there is indemnification language provided with the non-submit MSA, is it heavily contingent on exceptions that weaken the protection it purports to provide? 3) Understanding that the risk mainly falls in the lap of the beneficiary and is triggered at exhaustion, is a competent administrator with the ability to contain medical costs in the picture to make sure the MSA has the best chance of remaining solvent throughout the applicant’s life?

For a downloadable copy of this piece please click here.

 


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18/Jan/2022

The Centers for Medicare & Medicaid Services (CMS) released a revised Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (“Reference Guide”) Version 3.5 on January 10, 2022. This Reference Guide replaces Version 3.4 which was released on October 4, 2021.  When comparing the two Reference Guidesnew section 4.3 and new language has been added. Below indicates the new section and language added in the (WCMSA) Reference Guide Version 3.5.

To download the new WCMSA Reference Guide v3.5Click Here. 

CMS’s Version 3.5 Reference Guide, Section 1.1 includes the following changes:

Clarification has been provided regarding the use of non-CMS-approved products to address future medical care (Section 4.3).   

 

Section 4.3   The Use of Non-CMS-Approved Products to Address Future Medical Care

A number of industry products exist with the intent of indemnifying insurance carriers and CMS beneficiaries against future recovery for conditional payments made by CMS for settled injuries. Although not inclusive of all products covered under this section, these products are most commonly termed “evidence-based” or “non-submit.” 42 C.F.R. 411.46 specifically allows CMS to deny payment for treatment of work-related conditions if a settlement does not adequately protect the Medicare program’s interest.  Unless a proposed amount is submitted, reviewed, and approved using the process described in this reference guide prior to settlement, CMS cannot be certain that the Medicare program’s interests are adequately protected. As such, CMS treats the use of non-CMS-approved products as a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement.   

 

As a matter of policy and practice, CMS will deny payment for medical services related to the WC injuries or illness requiring attestation of appropriate exhaustion equal to the total settlement less procurement costs before CMS will resume primary payment obligation for settled injuries or illnesses. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount.   

   

Keep in mind the WCMSA Reference Guide states:   

There are no statutory or regulatory provisions requiring that you submit a WCMSA amount proposal to CMS for review. If you choose to use CMS’ WCMSA review process, the Agency requests that you comply with CMS’ established policies and procedures. 

 

Take Aways

  • While CMS added Section 4.3, this language is not entirely new or at least not entirely unexpected.  Similar currently existing Reference Guide language has for years included warnings about what could happen if parties failed to adequately consider Medicare’s future interests in WC settlements.  For example, language from previous Reference Guide versions indicated in Section 8.0 that even for examples where a settlement did not meet CMS workload review thresholds “The settling parties must consider CMS’ future interests even though the case would not be eligible for review.  Failure to do so could leave settling parties subject to future recoveries for payments related to the injury up to the total value of the settlement” (Example 1) and “Not establishing some plan for future care places the settling parties at risk for recovery from care related to the WC injury up to the full value of the settlement”  (Example 2).

 

  • Also in prior versions of the Reference Guide in Section 4.1.4, CMS has warned of its ability and intention to deny injury-related medical services when it said that “If Medicare’s interests were not reasonably considered, Medicare will refuse to pay for services related to the WC injury (and otherwise reimbursable by Medicare) until such expenses have exhausted the entire dollar amount of the entire WC settlement.  Medicare may also assert a recovery claim, if appropriate.”

 

  • On a positive note, CMS has now clarified in the new language in Section 4.3 that it will allow for a procurement cost reduction when there is a denial of service when there was no approved WCMSA submission.  The new language clearly explains that the denial of service amount will not exceed the gross settlement minus procurement costs.  This is more reasonable than denying services up to the entire amount of the settlement as it had previously listed or perhaps denying services up to double the amount of services.  The double damages concept has been sometimes misstated in industry circles.  (In court cases, even double damages claims have first determined the recovery damages by determining the conditional payment amount after applying a procurement cost reduction and then doubling that amount).   The new language actually helps with this issue.

 

  • However, perhaps even more troubling is whether funds earmarked to help protect Medicare’s future interests as WCMSA funds are actually used for the intended purpose.  According to the National Council on Compensation Insurance, Inc. (NCCI) 2018 research brief updating its 2014 survey on WCMSAs, approximately ninety-eight percent (98%) of the Workers’ Compensation cases settled with the injured worker choosing to self-administer their MSA funds.  This 2018 NCCI update published research brief included a sample of over 11,500 WC settlements between 2010 and 2015.

 

  • Perhaps to address this gap between what is said will be done (i.e. WCMSA allocation reports) and what actually is done (the administration of settlement dollars to pay for injury-related medical items, services, and expenses including prescription drug expenses, CMS already has the following language recommending professional administration in its Reference Guide in Section 17:

 “CMS highly recommends professional administration where a claimant is taking controlled substances that CMS determines are “frequently abused drugs” according to CMS’ Part D Drug Utilization Review (DUR) policy. That policy and supporting information are available on the web at https://cms.gov/Medicare/Prescription-Drug- Coverage/PrescriptionDrugCovContra/RxUtilization.html.

Claimants may also administer their own WCMSAs, if State law allows. Claimants should submit annual self-attestations, just as a professional administrator would. This arrangement is subject to the same rules and reporting requirements as any other WCMSA. See Section 17.5 for more on this annual attestation. 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.”

 

  • Perhaps CMS felt that its existing high recommendation language for professional administration was sufficient to encourage settling parties to avoid pitfalls of incompetent administration of WCMSAs.  But has CMS or any other entity ever done research to see what percentage of self-administered MSA funds were properly and fully exhausted before any injury-related medical bills were submitted to Medicare? If a non-submit WCMSA comes in at 80% of the CMS methodology submitted and approved WCMSA (80% because it follows an evidence-based drug tapering program guideline often seen in a state-based Workers’ Compensation medical protocol like the MTUS in California for example) but the WCMSA funds are professionally administered, wouldn’t that seem to protect Medicare’s real-world interests rather than a CMS submitted and approved WCMSA allocation report but self-administered by an injured claimant?

 

Stay Up To Date

Count on Medivest to help you navigate your risk tolerance in light of the new CMS WCMSA Reference Guide language and see if we can’t find the right balance to reasonably protect Medicare’s interests in your settlement. Medivest will continue to monitor changes occurring at CMS and will keep its readers up to date when such changes are announced. For questions regarding these updates, please reach out to a Medivest representative in your area byclicking here or call us direct at 877.725.2467. 


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16/Dec/2021

On December 15, 2021, CMS issued an alert regarding the Computation of Annual Recovery Thresholds for Certain Liability Insurance, No-Fault Insurance, and Workers’ Compensation Settlements, Judgments, Awards or Other Payments for 2022.  CMS also issued the methodology for Computation of Annual Recovery Thresholds for Certain Liability Insurance, No-Fault Insurance, and Workers’ Compensation Settlements, Judgements Awards or Other Payments.

 

The CMS alert states, “Beginning January 1, 2022, the threshold for physical trauma-based liability insurance settlements will remain at $750. CMS will maintain the $750 threshold for no-fault insurance and workers’ compensation settlements, where the no-fault insurer or workers’ compensation entity does not otherwise have ongoing responsibility for medicals.

This means that entities are not required to report, and CMS will not seek recovery on settlements, as outlined above. Please note that the liability insurance (including self-insurance) threshold does not apply to settlements for alleged ingestion, implantation, or exposure cases.”

 

To view CMS’ Alert for 2022 Recovery Thresholds for Certain Liability Insurance, No-Fault Insurance, and Workers’ Compensation Settlements, Judgements, Awards or Other payments Click This Link.

 

For the full announcement regarding CMS’ Methodology for Computation of Annual Recovery Thresholds for Certain Liability Insurance, No-Fault Insurance, and Workers’ Compensation Settlements, Judgements, Awards or Other Payment for 2022  Click This Link.

 

Count on Medivest to help guide you through some of the complexities associated with MSP compliance.

 


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01/Dec/2021

On Friday, July 2nd, 2021 the U.S. Supreme Court announced it would take up a legal battle that could have a dramatic effect on settlements in the state of Florida, and potentially the entire country. At question in Gallardo v. Marstiller will be whether Florida’s Medicaid program is only entitled to be reimbursed for the money it spent for a Medicaid beneficiary/Member’s past medicals up to the date of a settlement, judgment, award or other arrangement (“settlement”) or whether it is entitled to recover a portion of the settlement that represents future medical expenses too. Gallardo By & Through Vassallo v. Marstiller, 141 S. Ct. 2884 (2021).

A Brief Summary of Events

In 2008, a Lee County school bus struck and seriously injured 13-year-old Gianinna Gallardo. Florida’s Medicaid agency provided $862,688 in medical payments on Gianinna’s behalf. Her parents sued the responsible parties and ultimately agreed to an $800,000 settlement, of which $35,367 was allocated as past medical expenses.

Florida’s Medicaid agency, using the state’s then-current statutory formula to calculate reimbursement, claimed it was entitled to $323,508 of Gianinna’s settlement. However, the state’s statutory formula did not distinguish between past and future medicals and included money in the settlement that was allocated for future medical expenses.

The Gallardo family sued the state Medicaid agency in federal court, arguing that Florida’s reimbursement formula violates federal law because the state should only be able to recover from that portion of her settlement allocated to past medical expenses. The Medicaid agency countered that it was entitled to satisfy its lien from the portion of the settlement representing compensation for both past and future medical expenses.

Between 2017 and 2020 several courts weighed in on similar cases but decisions at odds with each other. In 2017, U.S. District Judge Mark Walker ruled in favor of the Gallardo family. In a 2020 appeal, the 11th Circuit rejected Walker’s decision and ruled that the Florida Agency for Health Care (“AHCA” or “Florida Medicaid”) was entitled to $200,000 of the settlement (Gallardo v. Dudek, 11th Cir., No. 17-13693, June 26, 2020). However, in a separate 2018 case, Giraldo v. Agency for Health Care Admin., 248 So. 3d 53 (Fla. 2018), the Florida Supreme Court said the federal Medicaid Act preempted a state law that authorized Florida Medicaid to seek reimbursement from “portions of (a settlement) that represents future medical funds.” Therefore, that case seemed to indicate that Florida Medicaid was only entitled to recover the portion of money from a settlement that represented past medical expenses

Potential Far-Reaching Effects of a U.S. Supreme Court Medicaid Lien Recovery Decision

All Medicaid agencies have a duty under Federal law to recover past medical payments and most attorneys know to do a lien search when their clients are enrolled in Medicaid.  However, up to now, attorneys never had a legal duty to set aside a portion of settlement proceeds to protect Medicaid’s future interests. The current state of federal law on this topic has been discussed in our prior blog referencing the U.S. Supreme Court’s decisions in Ahlborn and Wos, and their reinstatement via the Budget reconciliation Act of 2018.  Now the U.S. Supreme Court will weigh in this issue – i.e., whether a Medicaid agency like Florida’s is entitled to seek a portion of funds designated for future medical care from a settlement, judgment, award, or other arrangement (each individually now referred to as “settlement”) when it takes up Gallardo v. Marstiller.

How would that be enforced if it is decided that Medicaid’s future interests must be considered at the time of a settlement, judgment, award, or other arrangement? Could this set legal precedent for a nationwide practice of Medicaid beneficiaries setting aside some portion of their settlements to represent Medicaid futures like is done for certain cases involving Medicare beneficiaries or those who have a reasonable expectation of becoming Medicare beneficiaries within 30 months of settlements? Is it possible that a U.S. Supreme Court ruling in favor of Florida Medicaid’s future interests may lead to a federal statute setting forth the protection of Medicaid’s future interests in settlements similar to the way the Medicare Secondary Payer Statute sets the framework for the protection of Medicare’s past and future interests?

The effects could be felt beyond the state of Florida. Perhaps this is the reason that briefs have been filed in this case by or on behalf of the National Conference of State Legislatures, the National League of Cities, the U.S. Conference of Mayors, and the Government Finance Office, the American Justice Association, the Florida Justice Association, the American Academy of Physician Life Care Planners

Additionally, the outcome could increase the awareness of Medicaid lien resolution specifically and lien resolution generally.  Furthermore, if it is determined that Medicaid is entitled to at least some portion of the expected accident-related Medicaid futures, this could affect how Medicare Set-Aside (MSA) allocation reports would be prepared when beneficiaries are dual enrolled, and could increase the need for Professional Administration, due to the complexity of administering funds set aside for protection of both Medicare and Medicaid’s interests.

The Supreme Court’s decision will likely come during the Court’s 2021-2022 term. At that time Medivest will review the decision and provide analysis on what effects it could have on settlement services.


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14/Jul/2021

On May 12, 2021, the Court of Appeals of Iowa published its opinion number 20-1250 in Forbes v. Benton County Agricultural Society and reminded everyone that in order to avoid surprises that lead to bad settlement results, plaintiffs in liability cases or employers in Workers’ Compensation cases, should always  perform a lien investigation into the existence of any lien holders, entities, or plans that could assert a claim for reimbursement of paid claim charges (for this article, all simply referred to as liens).  The next steps upon identifying any such liens would be to follow up with lien resolution audit, analysis, and negotiation.   While the negotiation of the lien is often finalized after settlement, it is a form of malpractice for an attorney to move to settlement without first inquiring as to whether liens exist.

In August of 2017, Larry Forbes sustained an injury while on the premises of the Benton County Iowa fairgrounds, and hired an attorney to file a negligence action.  After initial discovery, counsel for the Benton County Agricultural Society (Ag. Society), made an offer to Forbes’s counsel to settle for $10,000.

The letter referenced TRICARE but not Medicare and stated: “Based on information you have provided to date, Mr. Forbes had an excellent recovery, and his actual medical bills totaled $2,732, for which TRICARE apparently had a subrogation interest.” Burris added: “There is no indication that Mr. Forbes had to pay anything out-of-pocket, or that the medical providers are actually charging anything beyond the $2,732 paid.”

After negotiating, Forbes agreed to settle his suit with the Ag. Society for $12,500. In return, Forbes would dismiss the suit with prejudice.  Counsel for the Ag. Society then informed Forbes’ counsel that if Forbes was Medicare eligible, her client would require “final CMS letter, showing the amount owed, if any, in reimbursement to Medicare.”  However, after reaching the agreement, Forbes’ attorney learned that Medicare was pursuing a Medicare lien in the amount of $25,482 for reimbursement of  conditional payments it made toward Forbes injury related medical expenses. Forbes’ attorney attempted to renegotiate the settlement once the existing Medicare conditional payments came to light. However, the Ag. Society pushed back, insisting Forbes accepted the agreed upon terms of the settlement and was aware of his obligations to Medicare.  The Ag. Society moved to enforce the settlement by filing a motion for summary judgment.

When the case went to court, Forbes argued the agreement was unenforceable and claimed there was a “mutual mistake” because the parties failed to reach a “meeting of the minds.” The Iowa District Court for Benton County disagreed with Forbes and ruled in favor of the Ag. Society granting it summary judgment, based on its position that the settlement contract was enforceable.  The Court of Appeals of Iowa affirmed the District Court’s ruling, reaching its affirmation under the theory that settlement agreements are essentially contracts and because the District Court properly applied contract law. Furthermore, the Court of Appeals confirmed that  the lower court record showed a “meeting of the minds,” and that Forbes therefore, bore the risk of the mistake.

The Court of Appeals provided a detailed analysis on how a party may be considered to bear  the risk of a mistake such as when:

“(a) the risk is allocated to him by agreement of the parties, or

(b) he is aware, at the time the contract is made, that he has only limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient, or

(c) the risk is allocated to him by the court on the ground that it is reasonable in the circumstances to do so.”

The court decided that Forbes bears the risk of mistake in two of these exceptions:

“The first of those two exceptions is called “conscious ignorance.” See id. cmt. c. Under that exception, even if Forbes did not agree to bear the risk of mistake, he was aware when he agreed to the settlement that he had limited knowledge about potential Medicare payments. And despite that uncertainty, he “undertook to perform” the bargain. See id. In doing so, he assumed the risk of the mistake. See id. We agree with the district court that Forbes had exclusive access to his medical records and the ability to investigate whether Medicare would seek a recovery claim.

On the second exception, even if Forbes were not consciously ignorant about the possibility of a Medicare recovery claim, the district court was still reasonable in assigning the risk of mistake to him. See Pathology Consultants v. Gratton, 343 N.W.2d 428, 438 (Iowa 1984); see Restatement (Second) of Contracts § 154 cmt. a. As the court noted, Forbes’s fall occurred nearly two years before he sued. In that time, he had the opportunity and the burden to inquire thoroughly into the payment of his medical bills. It made sense for the court to allocate the risk of any mistake to Forbes.

The full opinion and summary of the case can be read here: https://www.iowacourts.gov/courtcases/12533/embed/CourtAppealsOpinion.

 

Takeaways

Lien Investigation should be addressed during the pendency of any liability claims to determine who is paying for the injured party to recover from their injury and whether they will be asserting any subrogation/reimbursement right lien.  This is especially important  for those who are eligible/enrolled in any type of government issued medical insurance plan such as Medicare, Medicaid, VA/TRICARE/CHAMPVA, or who works/worked for a government entity (Such as FELA or FEHBA), or whose health plan is governed by federal law (such as an ERISA plan).

Patience is a virtue, especially in Lien Resolution and Lien Investigation. CMS’ guidelines allow for up to a 45-day response per inquiry. VA/TRICARE/CHAMPVA often take longer.  Parties should take this into consideration and be proactive and inquire as to liens early in the case, so that if a settlement opportunity arises, they are able to have an accurate picture of all outstanding liens at the right time.  Otherwise, they may be settling prematurely and as Mr. Forbes learned, at their peril.

Neglecting to address liens at the start of settlement is taking an unnecessary risk.  Working with an experienced lien resolution group will often produce faster response times and outstanding resolution results.  This is due in part to familiarity with the various lien processes, having lien holder contacts on file, use of electronic portals and secure email systems of recovery agents, use of proprietary diagnosis review software. Knowing which remedies may be available when, and how to best use the facts of cases in favor of the injured party when applicable.

Medivest can help you navigate through the complexities of lien resolution while you work toward a desired settlement outcome. Call us to today to speak to one of our highly trained settlement consultants for a free lien case consultation. For more information about Medivest or to refer a case, please call 877.725.2467 | Monday – Friday 8 am to 5 pm EST.


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01/Jul/2021

On June 28th, Centers for Medicare & Medicaid Services (CMS) made two announcements. The first is notice of the updated MMSEA Section 111 Group Health Plan (GHP) User Guide, while the second concerns a new technical alert regarding the inclusion of Part D information in Section 111.

Updated MMSEA Section 111 Group Health Plan (GHP) User Guide and GHP 270/271 Health Care Eligibility Benefit Inquiry and Response Companion Guides

A summary of the updates that have been made in Version 6.2 of the MMSEA Section 111 GHP User Guide are listed here:

The CMS electronic file transfer (EFT) file-naming conventions for inbound and outbound files have been updated (Section 8.1.1).

To provide more accurate direction to submitters, instead of receiving the RX 07 error code (Beneficiary does not have Part D enrollment), Disposition Code 51 will be returned for those records where the submitted individual is not entitled to Medicare Part D (Appendix D).

A new Modifier Type Code (PVR) and Name (From a provider) have been added for unsolicited MSP response files, and the DTM code (Name of employer submitting the Data Match Questionnaire Response) has been removed (Section 7.2.10.6).

The following will become effective December 11, 2021:

Under the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT Act) for Patients and Communities, Section 111 Responsible Reporting Entities (RREs) who provide primary prescription drug coverage must submit this information through the Section 111 process. To support their efforts, the Query-Only Response File layout will be updated to provide the most recent Part D enrollment information for beneficiaries. Additionally, process steps for installing and configuring the HIPAA Eligibility Wrapper (HEW) software will also be provided (HEW Query-Only Response File Record – Version 4.0.0, Appendix I).

The full guide can be downloaded here at CMS.gov.

Medicare Secondary Payer (MSP) Mandatory Reporting Provisions Section 111 of the Medicare, Medicaid, and SCHIP Extension Act (MMSEA) of 2007

The purpose of the latest alert is to notify Group Health Plan (GHP) RREs of changes being made to the Query Only Response File. Effective December 13, 2021, RREs will need to provide current Part D enrollment information for a beneficiary if the profile indicates that it provides network primary prescription drug coverage via Section 111 reporting. Additionally, three new fields will be added to the Query Only Response File layout.

The full alert can be downloaded here at CMS.gov.

For questions regarding these updates and how they may affect you and/or your clients workers’ compensation or liability settlements, please contact Medivest here or call us at 877.725.2467.


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