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29/Apr/2021

 

The Centers for Medicare & Medicaid Services (CMS) released a revised Workers’ Compensation Medicare Set-Aside Arrangement (WCMSAReference Guide (“Reference Guide”) Version 3.3 on April 19, 2021. This Reference Guide replaces Version 3.2 which was released on October 5, 2020. 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 3.3.

CMS’s Version 3.3 Reference Guide includes the following changes:

  • The CDC Life Table link was updated (Section 3).
  • Language around surgeries to be covered by seed money in a structured settlement was clarified, and a disclaimer was added to the proposal review reference tools list in Appendix 4, along with the Conduent Strataware® tool (Sections 5.2 and 9.4.4, Appendix 4).
  • Miscellaneous clarifications were added as follows (Sections 9.4.5, 10.2, 16.2, and 4):
    • On pricing: include refills when pricing intrathecal
    • On documentation: clarification was added on Consent to Release
    • On WCMSA Portal case access: clarification was added on case access for Professional Administrators who are not the original
  • The Major Medical Centers table was updated for a Missouri entry (Appendix 7).

To download the new WCMSA Reference Guide v3.3 Click Here.

 

Change 1 – CDC Life Table Updated Link

Section 10.3

Please see the WCMSA site (http://go.cms.gov/wcmsa) for additional information.”

 

Change 2 – Seed Calculations Include Cost of First Surgery/Procedure for Each Injured Body Part

 Section 5.2

Language around surgeries to be covered by seed money in a structured settlement was clarified.

  • Medivest’s Takeaway: Of these announced changes, the change of most significance is the clarification that CMS expects seed calculations to be evaluated for each affect body part of an injured worker. Text has been inserted in multiple locations for this purpose. We have placed references to the applicable Reference Guide section where the updated language appears and have quoted various portions of the existing language along with the revised/inserted language for context below, with the revised language appearing in blue highlight.
  • CMS’ Update: “A WCMSA can also be established as a structured arrangement, where payments are made to the account on a defined schedule to cover expenses projected for future years. In a structured WCMSA, an initial deposit is required to cover the first surgery or procedure for each body part, and/or replacement and the first two years of annual payments. The initial deposit (“seed money”) is followed by subsequent annual deposits (or a shorter time period if CMS agrees to such), based on the anniversary of the first deposit. If in any given coverage year, the deposited funds are not exhausted (i.e., used up, spent), they are carried forward to the next period and added to the next annual deposit. The whole fund, including carry-forwards, must be exhausted before Medicare will pay primary for any WC injury-related medical expenses. If the fund is exhausted appropriately in a given annual period, Medicare will pay primary for further WC injury-related medical expenses during that period. In the next annual period, the replenished WCMSA funds again must be used, until the WCMSA amount is appropriately exhausted.”

 

Section 9.4.4

  • Medivest’s Takeaway: Slight changes were also made under 9.4.4 Medical Review, Step Six, to clarify that seed calculations are to be performed for each affected body part/injured area as follows:
  • CMS’ Update – Section 9.4.4: “When annuity is selected, the submitter provides a proposed “seed” or initial deposit amount. This amount should include the cost of the first surgery/procedure for each body part, if any. The seed includes the first two years of the annual amount. See Section 05 – Cover Letter in this guide for instructions on how to calculate the seed amount, with an example.54r3efd

The seed includes the cost of the first surgery/procedure for each body part, including all costs such as prescription drugs, physician fees, anesthesia fees, and facility fees. If the surgery is preceded by an associated trial, i.e., trial SCS or trial intrathecal (IT) pump, the cost of the trial is also included since it is considered part of the same procedure. If there are no surgeries, the first procedure (if any, such as injections) is included. Series of spinal injections are not included, but series of knee visco supplementation are included if three are anticipated to be accomplished as a series of three weekly injections.

The first replacement of Durable Medical Equipment (DME), prosthesis, or orthotics is included in the seed funds if the cost of such items exceeds $500.

The seed includes the cost of surgeries, procedures, drugs, or replacement items as noted above. It does not include the cost of diagnostic studies, complications, and hospitalizations for non-surgical treatment.”

Other locations where the per body part is referenced include in 10.1 Section 05-Cover Letter:

on page 39:

. . .

“Note: Where the WCMSA is to be funded by a structured settlement, the cover letter

must disclose whether any portion of the projected prescription drug expenses has been included in the lump sum required to cover the first surgery/procedure for each body part,

and/or replacement and the first two years of annual payments.”

. . .

As well as in two places on page 40 under the same section:

Example:

Total WCMSA = $301,826.90

Cost of first surgery for each body part, and/or the first procedure/replacement =

$10,191.40”

. . .

“Step 2. Identify the cost of the first surgery for each body part and the first

procedure/replacement ($10,191.40)”

 

Appendix 4-1 | WCRC Proposal Review Reference Tools

  • CMS’ Update: “Strataware® is a tool, for repricing medical bills to state mandated fee schedules, as well as usual, customary and recommended (UCR) rates.”

 

Change 3 – Pricing Updates Includes refills when pricing intrathecal pumps

Section 9.4.5 | Medical Review Guidelines Intrathecal (IT) Pumps

Pricing clarification was updated for Intrathecal pumps to stress that pump refills should be projected for the claimant’s life expectancy.

  • CMS Update:The WCRC follows the most recent guidance from CMS on intrathecal (IT) pump pricing and frequencies. Permanent placement of IT pump devices are included every 7 years: the claimant’s life expectancy is divided by 7, decimals are dropped, and the whole number is used for determining replacement over the life expectancy. Pricing includes necessary pump refills over the claimant’s life expectancy.”

Pricing for Spinal Cord Stimulator (SCS) Surgery

. . .

Consider the number of leads to be used.

Analysis Services: CMS LCDs (L34705 and L35648) can be billed every 30 days and more frequently in the first month. It should be priced four times in the first 30 days, monthly for the first year, and twice a year after the first year.

5. LCD L34705 – SCS (Dorsal Column Stimulation) – “Generally, electronic analysis services (CPT codes 95970, 95971, 95972, and 95973) aren’t considered medically necessary when provided more often than once every 30 days. More frequent analysis may be necessary in the first month after implantation.

6.  LCD L35648 – SCS for Chronic Pain – Under Utilization Guidelines: “Generally, electronic analysis services (CPT codes 95970, 95971, 95972 and 95973) aren’t considered medically necessary when provided more often than once every 30 days. More frequent analysis may be necessary in the first month after implantation.

 

Section 10.2 | Consent to Release Note

  • CMS’ Update: “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 initials.”

 

Section 16.2 | Amended Review

On WCMSA Portal case access: clarification was added on case access for Professional Administrators who are not the original submitter.

  • CMS’ Update:
    • In the event that treatment has changed due to a state-specific requirement, a life-care plan showing replacement treatment for denied treatments will be required if medical records do not indicate a change. Requests for changes to treatment plans will not be accepted without supporting medical documentation.
    • The approval of a new generic version of a medication by the Food and Drug Administration does not constitute a reason to request an amended review for supposed changes in projected pricing. CMS will deny the request for re-review if submitters fail to provide the above-referenced justifications with the request for re-review. Submitters will not be permitted to supplement the request for re-review, nor will they be developed.
    • Re-review and amended review requests may be made electronically or by mail.

See the WCMSAP User Guide at https://www.cob.cms.hhs.gov/WCMSA/assets/wcmsa/userManual/WCMSAUserManual.pdf for details on electronic submission. Professional Administrators who are not the original submitter, see Section 19.4.

 

Section 19.4 | Change of Submitter

Provides Helpful Information to Professional Administrators that did not submit the WCMSA on How to Gain Access on the WCMSA Portal case access: clarification was added on case access for Professional Administrators who are not the original submitter.

 

  • CMS’ Update: Professional Administrators whose EIN does not match the EIN of the original submitter, contact BCRC to gain access to the case via the WCMSA Portal; otherwise you must submit by mail. Submitter changes will not be accepted after settlement, and does not constitute a reason for a re-review (See Section 16.0 for re-review requirements). CMS will not provide copies of existing documentation to the new submitter. Any documentation must be obtained from the incumbent submitter or insurer.”

 

Change 4 – The Major Medical Centers table was updated for a Missouri entry (Appendix 7)

Click Here for the updated list of Major Medical Centers by State, NPI, and ZIP Code with the new Missouri entry.

 

Medivest will continue to monitor changes occurring at CMS and will keep its readers up to date when such changes are announced. For questions, feel free to reach out to the Medivest representative in your area by clicking here or call us direct at 877.725.2467.


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05/Apr/2021

NPRM: Miscellaneous Medicare Secondary Payer Clarifications and Updates (CMS-6047)

The Office of Information and Regulatory Affairs Office of Management and Budget (OIRA/OMB) issued a Notice of Proposed Rulemaking (NPRM) for the Centers for Medicare & Medicaid Services (CMS) dated 03/00/2021 found here.

Essentially the proposed rule would clarify existing Medicare Secondary Payer Act (MSP) obligations associated with payment for future injury related and Medicare allowable medical items, services, and expenses, including prescription drug expenses (Future Medicare Allowable Medicals) related to settlements, judgments, awards, payments, or other arrangements (Settlements) paid by primary plans such as liability insurance plans (including self-insureds), No Fault plans, or Workers’ Compensation plans.  Specifically, this rule would clarify that an individual Medicare beneficiary is responsible to satisfy Medicare’s interests with respect to Future Medicare Allowable Medicals related to such Settlements, in addition to the already well known and regulated obligation for Medicare beneficiaries and their attorneys to satisfy Medicare’s past interest in such Settlements by verifying the existence of and resolving any conditional payments (i.e. “Medicare liens”) stemming from Settlements.

This proposed rule would also remove obsolete regulations.  While it is projected to focus on the protection of Medicare’s interests in the previously unregulated liability and No Fault Settlement market, the new NPRM could provide additional clarification regarding protecting Medicare’s future interests in Workers’ Compensation Settlements as well

Is this NPRM update laying the groundwork to issue the long awaited LMSA Regulations/Guidance?  Only time will tell.  Medivest will continue to monitor the OIRA/OMB website for any NPRM updates to keep you informed.  You can be assured that Medivest is here to help guide you through some of the complexities associated with MSP compliance.

 

OIRA/OMB has issued similar proposed release date Notices of Proposed Rule Making (NPRM) for CMS regarding this RIN 0938-AT85 as follows:

 

 

To stay up to date regarding any changes with LMSA Regulations/Guidance, please visit Medivest’s blogs:

 

Take Aways

  • Considering and protecting Medicare’s past interests has become the industry standard and a “no brainer” for all NGHP settlement types – liability, self-insurance, No Fault, and Workers’ Compensation.
  • Whether the announced guidance comes this August or not, it makes sense to help ensure that Medicare’s future interests are protected in accordance with existing federal law, i.e. the MSP.
  • Helping to ensure that Medicare is not prematurely billed for injury related futures for any settlement type is the right thing to do and helps protect the Medicare Trust Funds.

 


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21/Dec/2020

As we enter the final weeks of 2020, Medicare Secondary Payer Act (MSP) stakeholders will have to continue to wait for Liability Medicare Set-Aside (LMSA) Regulation/Guidance to be released. The last time the Centers for Medicare & Medicaid Services (CMS) mentioned the LMSA Regulation/Guidance it was scheduled to be released in August 2020. Professionals in the MSP industry have speculated that new regulations or guidelines are not likely to be published until March 2021, however as of December 17, 2020 no announcement date has been set. CMS first announced a Notice of Proposed Rulemaking (NPRM) to be issued in September of 2019 but has delayed the announcement multiple times over the past two years.  The NPRM would “clarify existing Medicare Secondary Payer (MSP) obligations associated with future medical items and services related to liability (including self-insurance), no fault insurance, and workers’ compensation settlements, judgements, awards or other payments. Specifically, this rule would clarify that an individual or a Medicare Beneficiary must satisfy Medicare’s interest with respect to future medical items and services related to such settlements, judgements, awards, or other payments. This proposed rule would also remove obsolete regulations.”

 

Injured individuals, their attorneys, and entities settling liability claims, including consultants that assist in the settlement process such as structured settlement and MSP compliance planners/consultants (Settlement Professionals) interested in complying with the MSP and ensuring that Medicare will not make payments for injury related and Medicare covered medicals post settlement, have regularly read and interpreted the CMS Stalcup Handout dated 05/25/2011, characterizing the obligation of considering and protecting Medicare’s interests in liability and Workers’ Compensation settlements as being one and the same (see below).  Furthermore, in the absence of specific regulations or guidance directed toward liability settlements, Settlement Professionals have also read and interpreted the guidance issued by CMS in its Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide v 3.2.

 

The WCMSA Reference Guide of course only gives examples of situations where Workers’ Compensation settlements fall outside the workload review thresholds allowing for review by CMS but in the two examples it provides in Section 8.1 titled Review Thresholds, it indicates that “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.”  In the same section of the Reference Guide, CMS indicates in another example, “The settling parties must consider CMS’ future interests even though the case would not be eligible for review.” Because of the double damages provision allowed for recovery actions under the MSP, and regardless of what CMS’ enforcement position has been in the past, insurance carriers, Self-Insureds, and attorneys representing injured plaintiffs have taken precautions to reduce the likelihood of any recovery against them for future conditional payments.  Many have surmised that this is only a plaintiff issue and have argued insurance companies and Self-Insured need not worry about Medicare covered futures.  Nobody knows exactly where the future guidance in this area is going to fall but it is clear that Medicare’s Trust Funds need protecting because as recently as 2018, Congress predicted Medicare’s Part A Trust Fund to be depleted in 2026.*

 

Highlights from the CMS Stalcup Handout 05/25/2011

…“Medicare’s interests must be protected; however, CMS does not mandate a specific mechanism to protect those interests.  The law does not require a ‘set-aside’ in any situation.  The law requires that the Medicare Trust Funds be protected from payment for future services whether it is a Workers’ Compensation or Liability case.  There is no distinction in the law.”

…here is no formal CMS review process in the liability arena as there is for Workers’ Compensation.  However, CMS does expect the funds to be exhausted on otherwise Medicare covered and otherwise reimbursable services related to what was claimed and/or released before Medicare is ever billed.  CMS review is decided on a case by case basis.

…“Each attorney is going to decide, based on the specific facts of each of their cases, whether or not there is funding for future medicals and if so, a need to protect the Trust Funds.”

Click here to download entire memo

 

Office of Management and Budget (OMB) issued the following Notices of Proposed Rule Making (NPRM) regarding RIN 0938-AT85:

 

To stay up to date regarding any changes with LMSA Regulations/Guidance, please visit Medivest’s blogs::

 

Take Aways:

  • Considering Medicare’s interests in any settlement with some type of analysis regarding the protection of those interests has become the industry standard  for all NGHP settlement types – liability, self-insurance, No Fault, and Workers’ Compensation.
  • Whether the announced guidance comes out soon or not, doesn’t it make sense to help ensure that Medicare’s future interests are considered and protected in accordance with existing federal law – i.e. the MSP?
  • Helping to ensure that Medicare is not prematurely billed for injury related future Medicare covered medicals for any settlement type is the right thing to do and helps protect the Medicare Trust Funds.

 

Medivest will continue to monitor the OMB website for any NPRM updates in order to keep you informed.  Count on Medivest to help guide you through some of the complexities associated with MSP compliance.

* Medicare has two Trust Funds. One for Part A that covers hospital insurance for the aged and disabled and one for both Part B that mainly covers doctors’ visits and Part D that covers prescription medications, for the same population of Medicare enrollees. It was announced in June 2018 that the Part A Hospital Insurance (HI) Trust Fund is projected to be depleted in 2026, three years earlier than predicted just a year ago. The Part B and D Trust Fund is not as bad off due to a financing system with yearly resets for premium and general revenue income and is projected to have adequate funding for the next ten years and beyond.

Total Medicare expenditures were reported to be $710 billion in 2017. Medicare expenditures were projected to increase at a faster pace than either aggregate workers’ earnings or the economy, and to increase from approximately 3.7 percent in 2017 to between 6.2 percent and 8.9 percent as a percentage of Gross Domestic Product (GDP) by 2029, causing substantial strain on our nation’s workers, the economy, Medicare beneficiaries, and the Federal budget.

A 2018 Annual Report of the Boards of Trustees of the two Medicare Trust Funds recommended a legislative response [2] to help protect the Part A Trust Fund. However, instead of waiting years for Congress to act, if parties to third party or workers’ compensation settlements involving Medicare beneficiaries [3], proactively address both past and future interests of Medicare, that could help slow Medicare Trust Fund depletion, in line with the above-described intent of the MSP.

 


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19/Dec/2020

The Centers for Medicare & Medicaid Services provided an alert on November 25, 2020 that it reviewed the costs related to collecting Medicare’s conditional payments and compared the cost to CMS recovery amounts, and decided to leave the threshold for physical trauma-based liability insurance settlements (including self-insurance settlements) at $750.  Additionally, CMS indicated it will keep 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 (ORM).  Otherwise, once ORM reaches $750 for either No Fault or Workers’ Compensation plan claims, those payments need to be reported for Medicare beneficiaries via Section 111 Reporting.   These described reporting thresholds do not apply to settlements for alleged ingestion, implantation, or exposure cases.

Take Aways:

Those settlements falling under any of the above described categories of insurance or self-insurance commonly referred to as Non-Group Health Plans (NGHP) will not need to be reported under the Medicare Secondary Payer Act (MSP) via Section 111 and will also not be subject to recovery claims by Medicare under the MSP.  https://www.medivest.com/update-on-medicare-conditional-payment-enforcement-actions/ 

See this web link for the CMS Alert regarding these NGHP reporting thresholds:  https://www.cms.gov/files/document/2021-recovery-thresholds-certain-liability-insurance-no-fault-insurance-and-workers-compensation.pdf

 


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01/Sep/2020

Click here for a downloadable copy of this blog

On Friday August 21, 2020, the U.S. Attorney’s Office for the Middle District of Pennsylvania announced a $53,295 settlement of Medicare Secondary Payer Act, 42 U.S.C. §1395y(b)(2) (“MSP”) debt.  The settlement described in the press release demonstrates the U.S. Government’s continued interest and intent in enforcing the recovery provisions of the MSP.

Headlines on MSP recovery often focus on plaintiff attorneys who fail to adequately address Medicare conditional payment reimbursement claims, often called Medicare liens by attorneys and Medicare beneficiaries.  However, at fault parties and their insurance carriers need to pay close attention to these MSP recovery actions.  That is because the MSP provides for joint and several liability of primary plans such as liability carriers and self-insureds, including the potential for double damages, even after settlement proceeds have been paid and a release has been signed.

While the plaintiff attorney is the focus of the headline “Harrisburg Law Firm Pays $53,295 To Reimburse Medicare Program” the press release indicates that one of the defendants in the underlying improper drug dispensing case, paid $33,750 of the $53,295 to the U.S. for settlement of the MSP debt.  Insurance carriers or self-insureds sometimes insist on forwarding the lien payment to Medicare because they don’t want to pay a settlement to the plaintiff, only to later be asked to pay the Medicare portion (or more) again, if the plaintiff’s attorney has not timely paid the lien.

There is no information about why the plaintiff’s firm did not pay the amount demanded, but ultimately paid $19,545.15 toward the debt in this settlement with the U.S. Government.  The conditional payments were described in the press release as being $84,353 with the ultimate settlement amount being $53,295.  This seems to indicate that a 36.82% procurement cost reduction was allowed.  The settlement did not include a double damages request or even include any additional interest.

It is not clear from the press release whether there were any appeals over the amount of Medicare’s demand “determination” that led to the delayed payment of the lien and whether the release agreement contemplated the defendant/primary plan agreeing to pay the Medicare debt from withheld settlement funds.   Did the parties do their due diligence in investigating the debt?  Did they coordinate with each other over whether any Conditional Payment Letters contained amounts not related to the claimed/released injuries?  Did they coordinate their respective settlement notification/reporting to make sure that the ICD codes reported from the plaintiff and defense were aligned, and to help prevent an overreach in the future by Medicare in potentially flagging more than just injury related claims.

Could it have been similar to the recent Osterbye case in which the parties seemed to rely on Conditional Payment Letters as opposed to the official Medicare demand at the time of settlement? See JOSEPH C. OSTERBYE, as Administrator of the ESTATE OF…, Slip Copy (2020) 2020 WL 3546869, June 30, 2020.  In Osterbye, the Administrator of an estate of a deceased Medicare beneficiary sued the U.S. Government and the primary plan defendant alleging that there was a mistake of fact as to the amount owed to Medicare when the plaintiff failed to recognize that two files had been opened for the same case.  The plaintiff alleged that the defendant had “initiated” a separate conditional payment claim with Medicare without disclosing to plaintiff the amount of the separate conditional payment amount and arguing that plaintiff would not have settled the case if he had known that Medicare had a lien for over $100,000.00.  At the time of settlement, the Conditional Payment Letter that the plaintiff was in possession of only indicated about $13,000.00 in conditional payments.  In Osterbye, the NJ U.S. District Court denied the defendant’s motion to dismiss on the basis that the settlement may have been entered into based on mistake of fact indicating that the facts of the settlement will have to be investigated.   A similar issue was also addressed in the Langone state court case referenced in a prior blog article where parties mistakenly relied on Conditional Payment Letters instead of a demand letter.

Take Aways:

While some insist MSP recovery obligations are solely a plaintiff’s concern, defendants should pay close attention to make sure the debt is satisfied or otherwise resolved – Medicare will issue a case closed letter once the debt is satisfied even when a compromise is reached for an amount lower than the demand

Not all courts will be as accommodating to the plaintiff’s attorney as in the Osterbye Court.  Instead of a second bite at the settlement apple, the plaintiff’s attorney in Osterbye could have just as easily been accused of legal malpractice by the injured party, if there was a lack of disclosure or lack of competence by the attorney in verifying the proper amount of Medicare’s demand

Plaintiff and defense should cooperate with each other over what steps are being taken to confirm conditional payment resolution, including whether either party has hired a third party to investigate, audit, and/or negotiate the demand balance

Both parties should know that it is imperative to obtain a demand letter as opposed to a Conditional Payment Letter prior to settling a case unless the correct procedures have been taken via the Medicare Secondary Payer Recovery Portal to provide the 120 day anticipation of settlement notification and to request the Final Conditional Payment Calculation within 3 days of a settlement the details of which need to be timely reported

Plaintiff attorneys should be proactive in addressing Medicare’s past interests in a settlement by auditing payment summary forms to dispute non-injury related items, should timely notify Medicare of the settlement details to obtain procurement cost reductions, and should also consider whether lien resolution via waiver or compromise of the procurement cost reduced demand may be a suitable option to help the injured party retain more of the settlement proceeds.

 


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07/Jul/2020

Click here for a downloadable copy of this blog

Once again, the Centers for Medicare & Medicaid Services has provided an indication that while regulations and/or guidance is on its way regarding the protection of Medicare’s future interests for liability and No Fault settlements, the proposed rule regarding these have been moved to August 1, 2020 or perhaps further into the future (again). Technically, the information indicates that the Notice of Proposed Rule Making would “clarify existing Medicare Secondary Payer (MSP) obligations associated with future medical items services related to liability insurance (including self-insurance), no fault insurance, and worker’s compensation settlements, judgments, awards, or other payments. Specifically, this rule would clarify that an individual or Medicare beneficiary must satisfy Medicare’s interest with respect to future medical items and services related to such settlements, judgments, awards, or other payments. This proposed rule would also remove obsolete regulations.” The information is also indicating that regulations CMS determines to be obsolete will be removed. See the disclosure published in the Spring 2020 Federal Register Unified Agenda here.

Many in the MSP compliance industry believe that while the regulations and guidance could be focused on clarifying both the need to protect Medicare’s future interests and the way to protect those interests for each of the Non Group Health Plan (NGHP) primary plan types (Liability, Self-Insurance, No Fault, and Workers’ Compensation), it seems more likely that this particular group of regulations and/or guidance will focus primarily on liability and No Fault settlements. This is because both regulations and guidance have already been published specific to protecting Medicare’s future interests in Workers’ Compensation settlements in both the Code of Federal Regulations and via the Workers’ Compensation Medicare Set-Aside Arrangement – WCMSA Reference Guide Version 3.1.

Take Aways
  • Considering and protecting Medicare’s past interests has become the industry standard and quite honestly a “no brainer” for all NGHP settlement types – liability, self-insurance, No Fault, and Workers’ Compensation.
  • Whether the announced guidance comes this August or not, doesn’t it make sense to help ensure that Medicare’s future interests are protected in accordance with existing federal law, i.e. the MSP?
  • Helping to ensure that Medicare is not prematurely billed for injury related futures for any settlement type is the right thing to do and helps protect the Medicare Trust Funds.

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

 

 


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01/Jun/2020

Click here for a downloadable copy of this blog

In March 2020, the U.S. Attorney’s Office, as an enforcement arm of the U.S. Department of Justice, filed a lawsuit on behalf of the Department of HHS and its sub agency, CMS, against an attorney in Texas alleging failure of the attorney representing a party injured in a motor vehicle collision to properly reimburse Medicare for conditional payments.  The case is U.S. v. Carrigan & Anderson, Case 4:20-cv-00991, Filed 03/18/2020 in U.S. District Court for the Southern District of Texas, Houston Division.

That would not really seem like big news as we have written about several conditional payment enforcement actions by the U.S. Attorney’s Office/Department of Justice over the past few years against plaintiff attorneys for a failure to properly inquire with CMS’s Beneficiary Coordination & Recovery Center (BCRC) contractor and address amounts to be reimbursed to CMS.[1]

However, unlike some of the other cases, the plaintiff attorney in this case took proactive steps attempting to address Medicare’s past interests in the liability settlement.  Unfortunately, the steps taken were misguided.  Had the attorney requested a compromise or waiver and/or appealed the demand amount by CMS, he would have likely faired better.

Prior to settlement, the attorney properly provided notification of the claim to the BCRC triggering the search by the BCRC for claim related conditional payments.  The case settled for $70,000.00 and the plaintiff attorney provided notification of the settlement to the BCRC.  Presumably, the plaintiff and attorney had received a copy of an earlier Conditional Payment Letter.  Within a few weeks after the settlement notification was provided, the BCRC delivered a demand letter in the amount of $46,244.74, demanding payment within the standard 60 day time period  from the date of the demand and informing of the right to appeal its demand amount.

The attorney creatively filed a motion with a state court in Texas challenging the amount demanded by Medicare and provided notice of same to the BCRC.  He called the motion, Motion To Determine Portion of Plaintiff’s Settlement That Constitute Reimbursement of Medical Payments Made in and Regarding Settlement.  The court reviewed submitted evidence including an affidavit signed by plaintiff counsel suggesting the claim settled at 1/10th its full case value, and issued an order reducing the amount to be paid to Medicare by 90% to a figure of $4,700.00.  Plaintiff counsel submitted a copy of the order to the BCRC.  The full demand amount went unpaid and began accruing interest at nearly 10% APR on the 61st day post-demand (for current demands, the annual interest percentage rate is now over 10%).

As of March 18th, 2020, when the U.S. filed its recovery action in U.S. District Court, the alleged reimbursement amount had increased to $53,445.93 including interest. The U.S. requested recovery of its fees and costs but interestingly did not request double damages.

The U.S. Attorney’s position is that state courts lack authority to make determinations of federal law including amounts owned to Medicare under the Medicare Secondary Payer Act, 42 U.S.C. Section 1395y(b)(2) (MSP).   Furthermore the complaint asserts that because there is an administrative procedure in place under the current MSP regulations, if the plaintiff and attorney disagreed with the demand amount, the administrative appeals process should have been followed, i.e. that there was a failure to exhaust administrative remedies, an express condition precedent to seek redress in U.S. District Court for appeal of Medicare Initial Determinations such as the amount of a demand or a denial of a waiver.

Take Aways

Dispute and Appeal
  • Review each conditional payment letter to verify each reimbursement claimed is injury related
  • Dispute all non-injury related claims in a timely manner before the matter settles or before CMS issues its final demand
  • If unhappy with a CMS reimbursement of conditional payment demand, consider appealing through CMS’s administrative appeals process
  • You have 120 days to request a first level appeal in writing

In the meantime, consider one of the other post demand dispute processes allowed that may offer your client relief from what you consider to be an unreasonable demand.  Depending on the outcome, the appeal may not be necessary.

Compromise Requests 
  • Requesting a compromise to the BCRC offering a sum certain to resolve the claim laying out arguments based in equity similar to the ones made to the state court judge in the case above and/or according to regulations governing compromises by the U.S. Government existing in the CFR
  • Compromise requests are forwarded by the BCRC to the applicable CMS Regional Office (RO) and a response is provided within 45 days of the BCRC’s receipt of the request
  • Responses will either be accepted, countered, or rejected
Waivers
  • If not happy with the response to the compromise request and if the financial condition of the plaintiff is such that they have a hard time meeting their day to day living expenses, a waiver request could be an alternative option
  • Waiver requests entail filling out a detailed Social Security Administration financial form called the SSA 632-BK
  • To make its decision, CMS will evaluate resources of the plaintiff, income, the amount of the settlement, outgoing expenses, and hardship factors and may take up to 120 days from start to finish so you need to be mindful of the appeal deadline for the original demand.

 

[1] January 2020 DOJ US Attorney https://www.medivest.com/philadelphia-based-personal-injury-law-firm-agrees-to-resolve-allegations-of-unpaid-medicare-debts/ Philadelphia plaintiff firm settles for $6,604.59,

Nov 2019  US Attorney General – Baltimore plaintiff firm settles with Medicare for $91,406.98

March 2019 DOJ US Attorney  – Maryland plaintiff firm settles with Medicare for $250k

June 2018 DOJ US Attorney – Philadelphia plaintiff firm settles with Medicare for $28k

 


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17/Apr/2020

On March 20th, we discussed what actions Washington State’s Workers’ Compensation Agency was taking that would allow medical providers and injured workers to file claims for work related/industrial exposure to COVID-19. Since then, other states have also taken action and created new policies in regards to the COVID-19 outbreak.

Kentucky

Last month, Kentucky was one of the States that adopted policy to provide workers compensation benefits to healthcare workers and first responders exposed to COVID-19. On April 9th, 2020 Governor Andy Beshear of Kentucky extended the provision of those benefits to additional types of employees. In his executive order, Gov. Beshear ordered that an employee could receive temporary total disability (TTD) payments for the period of time that the employee was quarantined if that employee met certain criteria.

The burden of proof lies with the employee to show that the COVID-19 exposure was caused by the work conditions. The employee’s removal to quarantine has to be ordered by a physician.  If the employee can show the connection and removal by a physician, TTD payments can now be received for the quarantine period even if the employer denies liability.

The expanded list of those now eligible for TTD payments include healthcare workers, first responders, corrections officers, members of the military, activated National Guard, domestic violence shelter workers, child advocacy workers, rape crisis center staff, Department for Community based Services workers, grocery workers, postal service workers, and child care workers permitted by the Cabinet for Health and Family Services to provide child care in a limited duration center during the State of Emergency.

Florida

Florida followed Washington and Kentucky, and as of the end of March, Florida Chief Financial Officer Jimmy Patronis ordered the state’s Division of Risk Management (DRM) to review workers’ compensation claims submitted by state workers “required to interact with potentially infected individuals.” Those workers includes those employees known in Florida as “Frontline Workers“: law enforcement, firefighters, EMTs, paramedics, correctional officers, health-care workers, child safety investigators and Florida National Guardsmen.

The Florida League of Cities also announced in March that the Florida Municipal Insurance Trust would cover municipal first responders’ COVID-19 claims.

Illinois

This week, Illinois has taken a progressive step with the introduction of an emergency amendment to the Illinois Workers’ Compensation Commission’s rules of evidence under Part 9030 titled Arbitration, establishing a rebuttable presumption of a causal connection between employment and contraction of COVID-19 for both First Responders and Frontline Workers who contract COVID-19 as a result of their employment.

This is different than any other state in terms of the burden of proof.  In most states, the burden is on the injured or ill worker to prove the causal connection.  In Illinois, at this time, the burden will be on the employer to rebut this presumption that the causation exists.

In Illinois and other states, attorneys representing injured workers should evaluate whether there may be new expanded coverage in their state for their clients who contract COVID-19 as a result of employment related activities. They should consider whether such coverage may exist under the respective state’s Workers’ Compensation statutes or any other state law that may apply.

Some states, like Illinois, also have an Occupational Diseases Act which could be applicable, and if so, would pay benefits based on rates established under the applicable version of Illinois’ Worker’s Compensation Act.

Changes in Workers’ Compensation and Liability Cases

COVID-19 has driven changes that affected both the Workers’ Compensation and Liability industries outside of state and local government regulation. For additional information how the Workers’ Compensation industry has been affected please click here, and to find out how the Liability industry has been affected follow this link.

We hope each of you stays safe at this time.  Medivest is fully functional during this period and ready to assist parties with MSP compliance and lien resolution services. For assistance in these matters please call us at 1.877.725.2467 or contact us here.

 


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20/Mar/2020

The state regulated Workers’ Compensation agency for Washington State has already set up online methods for medical providers and injured workers to file work related/industrial exposure claims for COVID-19/Coronavirus, and even added a hotline for injured workers to call to be able to report likely exposure to COVID-19/Coronavirus. Because COVID-19/Coronavirus is so new and so contagious, it is hard to predict how likely it will be that claims of work related exposure will be accepted by Workers’ Compensation carriers or Boards that hear appeals of denials of exposure claims.   Some factors the Washington State Department of Labor & Industries listed that should be considered before filing a claim are:

  • Was there an increased risk or greater likelihood of contracting the condition due to the worker’s occupation (such as a first responder or health care worker)?
  • If not for their job, would the worker have been exposed to the virus or contracted the condition?
  • Can the worker identify a specific source or event during the performance of his or her employment that resulted in exposure to the new coronavirus (examples include a first responder or health care worker who has actually treated a patient with the virus)?

The Washington State online message suggests that “if the above criteria are not met, it is not necessary to file a Workers’ Compensation (WC) claim; however, a claim may still be filed if requested by the worker or if the provider is uncertain if the case meets the criteria.”  The site goes on to explain that instances where contraction of COVID-19 is only incidental to the workplace or common to all employment, giving an example of an office worker contracting the condition from a fellow employee, a claim for WC exposure to and contraction of COVID-19 would be denied.

Because WC is governed by state law, while the factors considered will likely be similar, the decision making resulting from the evaluation could vary state by state.

We hope the curve of exposure associated with this pandemic will flatten soon and we can get back to our ordinary lives, but in the meantime, we send positive thoughts and healthy wishes to all of our first responders, healthcare workers, service industry employees, and everyone else affected by this fast spreading virus!

 


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31/Jan/2020

A state appellate court in Colorado just held that hospitals in Colorado may forego billing Medicare or Medicaid even when an injured party is a Medicare or Medicaid beneficiary, and may proceed against the injured party as long as the hospital follows certain procedures. See Harvey v. Centura Health Corporation and Catholic Health Initiatives, — P.3d —- (2020) Court of Appeals No. 19CA0091 January 30, 2020*.

Those procedures are that the hospital must first submit charges to the “property and casualty insurer and primary medical payer of benefits available” to the injured person when that person is injured as a result of negligence or wrongful acts of another person, before filing a lien. The state appellate court clarified that neither Medicare nor Medicare are primary payers of medical benefits and because of this, held that Hospitals in Colorado do not need to bill Medicare and/or Medicaid before filing a lien.

Therefore, Colorado hospitals interested in collecting larger amounts of money than Medicare and/or Medicaid will pay will likely forego billing Medicare and/or Medicaid, and will put the at fault party on notice of its charges, will bill the liability carrier for the at fault party, and then proceed to file a lien against the injured party likely to receive a third party liability settlement.

Of course the charges must be related to the underlying third party liability injury and must be reasonable and necessary. So even if a Colorado hospital lien is perfected, the injured party has a right to dispute whether the charges are injury-related and to contest the reasonableness or necessity of the charges.

Call Medivest when your injured client is facing a hospital lien to allow our specialists to first determine if all of the requested charges are related to the underlying injury, and to negotiate with the lien holder or its recovery agent regarding the amount of reasonable and necessary charges. Don’t let your client pay unreasonable or unnecessary hospital bills even when a lien is filed!

*While this case has not been released for publication in permanent law reports and could be subject to a petition for rehearing in the Court of Appeals or for Certiori in the Supreme Court of Colorado, it is important to be aware of hospital practices in this regard.

 


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