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CLASSIC LIST

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17/Aug/2021

Medicare Set-Aside (MSA) arrangement beneficiaries have some very specific limitations when it comes to how their money is spent. When it comes to choosing a provider, the options are wide open. A beneficiary will often deal with who they know or a provider that is close to their home. As a cash payer with limited funds to cover all future Medicare allowable and injury related expenses, the wrong choice can put a beneficiary in a world of hurt. Here are some best practices when choosing a provider to treat an injury post settlement and using Medicare Set-Aside funds:

 

Choose a Medicare Certified Provider

While MSA funds can be used to pay any provider that supplies covered care related to the injury, not every provider is able to bill Medicare for these medical goods or services. If a beneficiary properly exhausts their MSA funds in a given year (when the MSA is funded with a structured annuity and receives deposits periodically) or the MSA funds have permanently exhausted, Medicare will assume responsibility to pay Medicare covered expenses related to the injury and coordinate with any other applicable insurance plan. If the provider is not Medicare certified, that provider will not be paid by Medicare even if the beneficiary has maintained Medicare coverage. This can leave the beneficiary as the responsible party if no other insurance benefit is available. We recommend choosing Medicare certified providers to avoid such situations.

 

Choose Providers Who Offer Discounted Cash Rates

A beneficiary with MSA funds is considered a cash payer by medical providers. There is no “in network” policy with set payment rates for cash payers. If the provider is not accustomed to dealing with patients without a primary medical insurance plan, the provider may charge its full retail rate. A beneficiary may have a difficult time negotiating a medical bill on their own or in advance of services being completed and this can add up to a significant expenditure of MSA funds. It is best to ask about cash rates and if any discounts are available when contacting a new provider.

 

Avoid Providers That Don’t Normally Bill Insurance

Billing insurance for medical services means increased access to patients because it agrees to a negotiated contract that reduces the average cost of services. Some providers opt to avoid insurance altogether. This allows these providers to charge higher rates for services because there is no set rate or maximum charge. Moreover, these providers will only take the beneficiary’s cash even if they have a group health plan or public benefit. This lack of flexibility is often costly for the beneficiary.

 

Choose Providers Experienced with Traumatic Injuries

This may seem obvious, but as a professional administrator, Medivest sees beneficiaries choosing providers that are not familiar with treating traumatic injuries post-settlement. This can be problematic from a communication standpoint (while the beneficiary and the administrator know the injury backwards and forwards, the doctor may see very few of these cases) and it can make billing and payment more difficult or present difficulties when seeking a referral to a specialists. The most efficient approach is to choose a provider that KNOWS the beneficiary’s type of injury from direct experience.

 

Choose a Flexible Provider

Here are a few common red flag phrases from providers that limit the beneficiary’s options:

We only bill Medicare.”

We don’t deal with liability injuries.”

“We never treat workers’ compensation injuries.”

“We only treat workers’ compensation injuries.”

“We don’t bill third parties.”

“We don’t take cash.”

Providers experienced with multiple scenarios provide the beneficiary with options when it comes to treatment and payment.

 

Beware of Signing Rate Agreements for Specific Services

A beneficiary that is not acquainted with the typical market rate or medical fee schedules is advised to run away from any agreement or contract that would lock them into a guaranteed payment rate. A rate agreement of this nature can put the beneficiary on the hook for significantly inflated cost. If they’re using a professional administrator (and they should be), it can negotiate with the provider directly on the beneficiary’s behalf. Don’t confuse this document with an authorization form to bill insurance or a notification that the beneficiary is responsible for any non-covered services. They’re not the same thing.

 

Avoid buying OTC Supplements or Supplies Directly from a Provider

Over-the-counter supplements or supplies that are sold directly by a provider typically come with a markup and can usually be found cheaper elsewhere. Your providers may recommend a device or a supplement that they conveniently stocks for sale. You should be aware that the providers may be looking to increase their margin per patient. Take your doctor’s advice and do your research.  If the recommended supply of supplement makes sense, shop around for a better price.

 

Do Not Be Discouraged if a Provider Rejects Payment from the MSA

Most providers within the US Healthcare system do not understand what a Medicare Set-Aside is or what it is for. They are frequently hesitant to accept it as a form of payment. They may mistake it for a Medicare Part C plan or out of network benefit. Sometimes, they are highly suspicious and cannot believe that Medicare is not the primary payer. It can be daunting for a beneficiary to be in the position of educating a provider’s billing office. A professional administrator is a great resource for coordinating benefits and having the MSA be the primary payment source, when applicable.

 

Conclusion

A MSA beneficiary with a persistent injury deserves the best care possible, but also needs to be positioned to ensure the MSA funds last. And if they don’t last, that the beneficiary has a proper safety net in place. Part of this strategy includes finding the right providers to not only address the injury with competence but also provide affordable and flexible options to ensure continuity of care and protect the beneficiary from having to dip into other settlement or personal funds.  Even when Medicare is responsible for covering injury care, the beneficiary can be billed for any deductible, copay, or coinsurance balances.

Last, we’d be remiss if we didn’t point out that a professional administrator addresses these challenges every day and not only talks to a beneficiary’s provider on their behalf, but will also coordinate benefits with other insurance, communicate with CMS about the MSA, and negotiate rates in ways a patient will struggle to match. If you or your client is a current or future beneficiary of a Medicare Set-Aside, don’t hesitate to contact Medivest. We help thousands of beneficiaries avoid these and many other MSA pitfalls.

 


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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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08/Jun/2021

On June 23rd, 2021 at 1pm EST, Centers for Medicare & Medicaid Services (CMS) will host a webinar regarding the implementation of the Provide Accurate Information Directly (PAID) Act. The full notice can be read below:


 

CMS will be hosting a webinar to discuss upcoming impacts to Section 111 Non-Group Health Plan (NGHP) Responsible Reporting Entities (RREs) related to the PAID Act, which was signed into law on December 11, 2020. The intention of the PAID Act is to help NGHP Responsible Reporting Entities better coordinate benefits by providing additional beneficiary Part C and Part D enrollment information. This webinar will cover what the PAID Act is, details of the NGHP Section 111 Query Response File changes, information on the scheduled testing period and implementation timeframes. The webinar will also be followed by a live questions and answer session with staff from CMS and the Benefits Coordination & Recovery Center.

Questions for this town hall can be submitted in advance to PL110-173SEC111-comments@cms.hhs.gov. Please have your questions submitted no later than June 16, 2021.

Date: Wednesday, June 23, 2021
Time: 1:00 PM ET

Webinar URL: https://www.mymeetings.com/nc/join.php?i=PWXW2072056&p=9205987&t=c

and

Conference Dial In: 888-469-1074
Conference Passcode: 9205987

Please note that for this webinar you will need to use both the webinar link and conference call information above to access both the visual and audio portion of the presentation. Please plan to join at least 15 minutes prior to the start of the presentation.


 

Additional information on the PAID Act can be found hereIf you have questions on how topics discussed in this webinar this may affect your clients, please contact Medivest here or call us at 877.725.2467.


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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. For any specific questions regarding MSAs of any type click here.


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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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08/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.

Medicare Set-Aside Report

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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20/Nov/2019

Are you self-administering your Medicare Set-Aside (MSA) funds or do you have a client doing so? If so, you are not alone. According to the National Council on Compensation Insurance, Inc. (NCCI) recently published a research brief updating its 2014 study on Workers’ Compensation MSAs (WCMSAs) and WCMSA reviews and reported that, between 2010 and 2015, approximately ninety-eight percent (98%) of the Workers’ Compensation cases included in the over 10,000 case sample, settled with the injured worker choosing to self-administer their MSA funds. Due to the large percentage of injured workers opting to self-administer, the Centers for Medicare & Medicaid Services (CMS) published a free downloadable, 31-page “Self-Administration Toolkit”, now in Version 1.3 which was updated on October 10, 2019.

If you’re a Claimant/Applicant/Petitioner’s attorney settling a WC case and your client is considering self-administration, below are a couple of blogs you may consider reading before deciding if self-administration is the best option.

CMS simply states that a competent administrator must be chosen to administer the MSA funds. The key word is competent, and it is the responsibility of the settling parties to deem whether the injured person is sufficiently competent to self-administer an MSA account. Below are a couple of scenarios regarding options for administration of MSA funds.

  • Injured Person Self-Administers his/her MSA Funds – The injured person handles his/her own MSA funds and assumes responsibility for handling the MSA funds per CMS’ guidelines for Medicare Secondary Payer (MSP) compliance.
  • Engage a Professional Administrator – Engage a third-party professional administration company to administer the MSA funds, coordinate all aspects of billing, complete annual reporting to Medicare as needed, maintain accounting records, etc. The Administrator assumes responsibility for handling the funds per CMS’s guidelines for compliance. Per CMS’s guidelines, fees for professional administration cannot be deducted out of the corpus of the MSA funds.
  • Engage A Trustee – Engage a person or professional entity (like a bank or trust company) who manages property or assets that have been placed in a Trust (i.e. a Special Needs Trust (SNT)). Per CMS’s guidelines, fees for a trustee cannot be deducted out of the corpus of the MSA funds.
  • Appointed Guardian or Conservator – An individual that has been determined to be mentally or physically incapacitated by a court of law, or when a minor is in need of an adult to manage his/her property, a guardian or conservator may be appointed.

Post Settlement Tips for Self-Administration

  • Per CMS’ guidelines, do not co-mingle MSA funds with personal funds. Place the MSA funds into a separate, interest bearing, FDIC insured account.
  • Keep pertinent documents regarding the settlement in a safe place. You may need to refer to these documents for paying claims, if applicable. Examples include:       o Executed Settlement
    o Power of Attorney
    o Conservator or Guardianship appointment
    o Trust documents
    o MSA Allocation Report / Life Care Plan / Medical Cost Projection Report
    or a report that was prepared and used in the settlement to determine
    and allocate the total future Medicare Set-Aside (MSA) funds.
    o CMS Approval Letter, applicable if the MSA was submitted to CMS for review
    o Accurate annual accounting, post settlement
    o Keep track of all post settlement expenses, receipts paid and copies of bills
    o Annual attestation letters, post settlement (these can now be submitted electronically)
    o Any correspondence from CMS, post settlement
  • Document Retention – How long should you keep settlement documents, CMS letters, etc? These documents you may want to keep for the life of your account. How long should you keep payments of medical bills, annual accounting, and yearly attestations? State laws generally govern how long medical records are to be retained. However, the Health Insurance Portability and Accountability Act of 1996’s (HIPAA) administrative simplification rules require a covered entity, such as a physician billing Medicare, to retain required documentation for six years from the date of its creation or the date when it last was in effect, whichever is later. https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE1022.pdf
  • What type of MSA funding arrangement was decided at the time of settlement? There are two types of MSA funding arrangements.
    1.    Lump Sum Funding – After settlement, a check for a one-time payment representing all future medical expenses that are injury related and Medicare allowable is issued.
    2.    Structured Annuity Funding – A combination of a check for the initial deposit or seed money used to fund the MSA. The amount of the seed deposit typically includes the first surgical procedure or replacement and the equivalent of two years of annual funds along with the yearly annuity payment beginning on the 1-year anniversary of settlement. Note: Medicare recognizes a structured settlement annuity as a viable method of funding MSAs. Medicare will become the primary payer of injury-related medical expenses, once documentation is provided showing the MSA funds were spent appropriately and there is no other available primary coverage to pay for injury-related Medicare covered medical expenses – until the next upcoming annuity payment has been deposited into the MSA account. For topics unique to Structured WCMSA Accounts, please refer to this link.
  • Before the injured person’s case settles, the WC claims adjuster typically will have paid for medical treatments and prescription medication that were related to the injury. After settlement occurs, the MSA funds should be used to pay injury-related and Medicare allowable expenses from the settlement date forward until exhausted.
  • If you are a Medicare beneficiary, you will need to continue to pay Medicare premiums, co-payments, and deductible amounts. Medicare updates its plans, premium costs, and coverage on a yearly basis. Each year, Medicare publishes a free downloadable handbook called “Medicare and You”.
  • If the injured person is Medicare eligible, he/she can add coverage to or change his/her plan during Medicare’s Open Enrollment period. The Open Enrollment period would not have an impact on their MSA Funds that they are currently self-administering. Every year, Medicare’s Open Enrollment period begins October 15th and ends December 7th for most Medicare plans. For Medicare Advantage plans, open enrollment runs from January 1st through February 14th. Medicare has designed a Medicare Plan Finder which it describes as a convenient way to compare coverage options, shop for plans, and feel confident about the coverage choices Medicare enrollees make. It also lets Medicare beneficiaries build and track their drug list to determine the best Part D (prescription drug) plan that meets their medical needs, including the display of lower-cost generic alternatives. Some details regarding Medicare Advantage Plans can be reviewed by clicking this link so you can compare covered benefits.
  • Medicare-Certified Providers – When choosing providers to receive care, consideration should be given whether the providers will be able to bill Medicare in the event MSA funds have either temporarily or permanently exhausted (depleted), or in the event a Medicare beneficiary may need Medicare covered treatment that is not injury related. If a provider cannot file claims to Medicare, the Medicare beneficiary may be billed for services in select circumstances. To locate providers that are Medicare-certified, please click here.
  • Reimbursement of Medicare Conditional Payments before and after settlement. If Medicare pays for care related to your injury, it may be doing so on the condition that Medicare will later be reimbursed for such payments. More information about Medicare’s right to recovery may be found here.
  • At the end of each year, interest earned on MSA funds will need to be identified as interest income generated from the MSA account for the prior tax year. Under CMS’ guidelines, the interest earned is to be deposited and remain in the MSA account to pay only for Medicare allowable expenses related to the injury, or used for other allowable purposes, such as to cover banking fees related to the account, mailing/postage fees related to the account, miscellaneous related document copying charges, and income tax on interest income from the MSA account.

Mismanaged MSA Funds

  • During the pre-settlement phase, the pricing of medical items and services for most MSA allocation reports are prepared using Workers’ Compensation state fee schedules for the state where the injury occurs. For liability cases, those medical items and services are priced at the Usual and Customary rate for the geographic region. For both WC and liability cases, prescription drug expenses are typically priced at Average Wholesale Pricing (AWP). Injured parties might not subscribe to or otherwise access the AWP pricing rates or state fee schedule rates and could end up paying for medical treatment or prescriptions drugs at amounts higher than they should.
  • When the injured person mistakenly pays for a non-Medicare allowable expense out of the MSA account, Medicare reserves the right to deny all injury-related Medicare covered claims until the MSA funds have been replenished or the injured worker can demonstrate appropriate usage equal to the full amount of the MSA.
  • If a provider mistakenly sends the bill to Medicare when it should have been paid out of a MSA account, the claim may be denied by Medicare and this could lead to CMS initiating an audit of the MSA funds.
  • Medicare may accidentally pay for an injury-related claim when it should have been paid out of the MSA account. The injured person may end up being billed or charged for the Medicare copay, coinsurance, or deductible amount, and later, still have to reimburse Medicare from the MSA funds.

When considering all the factors described above, doesn’t it make sense to strongly consider the use of a professional administrator? Also, The Centers for Medicare & Medicaid Services (CMS) published in the WCMSA Reference Guide, that professional administration is highly recommended.

Simply put, Professional Administration makes sense. If you are an attorney or an injured person who has questions regarding switching from self-administration to professional administration, Medivest is here to answer any questions you may have.

 


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