The United States House of Representatives today passed the Saving Medicare and Repaying Taxpayers (SMART) Act as part of a broader legislative effort. The SMART Bill was attached to House Bill 1845 Medicare IVIG Access Bill which provides for a study on issues relating to access to intravenous immune globulin (IVIG) for Medicare beneficiaries in all care settings and authorizes a demonstration project to examine the benefits of providing coverage and payment for items and services necessary to administer IVIG in the home.

The SMART Bill allows the claimant or applicable plan to notify the Secretary of HHS 120 days before the expected date of settlement, judgment, award, or other payment, and obtain a statement of the reimbursement amount from a website the Secretary will make available. If settlement, judgment, award or other payment is made during such period, then the last statement of reimbursement amount downloaded during such period shall constitute the final conditional amount subject to recovery related to such settlement, judgment, award, or other payment. No later than November 15 before each year, the Secretary is required to calculate and publish single threshold amount for settlements, judgments, awards or other payments for conditional payment obligations from liability insurance (including self-insurance), workers’ compensation laws or plans, and no fault insurance for that year. Each such annual single threshold amount for a year shall equal the expected average cost of collection incurred by the United States (including payments made to contractors) for a conditional payment from liability insurance (including self-insurance), workers’ compensation laws or plans, and no fault insurance.

As for the $1,000 mandatory insurer reporting penalty, the Bill states that insuring entities “may be subject” to a civil money penalty of up to $1,000 for each day of noncompliance. The Secretary must publish a notice in the Federal Register soliciting proposals for the specification of practices for which sanctions will not be imposed, including for good faith efforts to identify a beneficiary. After considering the proposals submitted, the Secretary, in consultation with the Attorney General, shall publish in the Federal Register proposed specified practices for which such sanctions will not be imposed. After considering any public comments, the Secretary shall issue final rules specifying such practices.

The Bill also modifies reporting requirements so that an applicable plan is permitted, but not required, to access or report to the Secretary beneficiary social security account numbers or health identification claim numbers.

In addition, the Bill establishes a statute of limitations by indicating that an action may not be brought by the United States with respect to payment owed unless the complaint is filed not later than 3 years after the date of the receipt of notice of a settlement, judgment, award, or other payment made.

The SMART Bill was described as a bipartisan effort targeted at improving the Medicare Secondary Payer system and to create efficiency and accountability in the MSP Recovery system.

The Bill will now move on to the United States Senate where it could be presented for vote or referred to a committee where it may be reviewed to determine whether it requires additions, deletions or other modifications or whether it can be approved in the form submitted.  Gould and Lamb is actively monitoring and is involved with many legislative bills and committees including the SMART Act  We will continue to follow the Bill’s progress as it moves over to the Senate and will keep our clients informed.  If anyone has any questions please feel free to contact your Gould & Lamb representative directly or the entire executive is available to answer any questions.

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About the Author: Russell S. Whittle, Esq., is the Vice President of MSP Compliance for Gould & Lamb, LLC. In his twenty plus years of practice prior to joining Gould & Lamb, LLC, Mr. Whittle practiced primarily in the area of insurance defense, representing the interests of large insurers and employers in both workers’ compensation and general automobile liability matters.

Gould & Lamb is a global leader of MSA/MSP Compliance Services in the country, serving domestic and international insurance companies, third-party administrators and self-insured entities.

On August 30, 2012, the Federal District Court of Louisiana, Western District, LaFayette Division, published its opinion in Bessard v. Superior Energy Services, finding that there was no evidence that Mr. Bessard, his attorneys, any other party or any other party’s representative, were attempting to maximize aspects of the settlement to Medicare’s detriment. As a result, the court concluded that to the extent that Mr. Bessard receives confirmation from Medicare of any conditional payments made by Medicare for services provided prior to settlement, Mr. Bessard shall promptly reimburse Medicare for such conditional payments. In addition, Mr. Bessard shall allocate $6,701.00 out of the settlement proceeds for payment of future medical items or services, which would otherwise be covered or reimbursable by Medicare, related to the conditions claimed and released in the case.

Gregory J. Bessard was injured in a workplace accident on June 30, 2009. His case was settled amicably after lengthy negotiations. The defendant agreed to pay the plaintiff the sum of $785,000. The settlement called for Mr. Bessard to assume the obligation for payment of his future medical expenses, which were to be calculated through a MSA.

Although Mr. Bessard was not a Medicare beneficiary at the time settlement was reached, Mr. Bessard was receiving Social Security disability benefits in connection with the injuries sustained in the accident. As a result, various medical reports were accumulated and a MSA was prepared by Gould & Lamb.

Based on the information provided by Mr. Bessard’s treating physicians, utilizing the fee schedule applied in claims brought under the Longshore and Harbor Workers’ Compensation Act, Gould & Lamb determined that Mr. Bessard’s future potential medical expenses that would be covered by Medicare and that were related to the injuries claimed and released amounted to $6,701.00.

Although the parties wanted the MSA approved by CMS for purposes of complying with the provisions of the MSP and the commensurate regulations, the parties were concerned that the settlement could not be finalized and cited the delays associated with obtaining approval from CMS and the possibility that approval may not ever be forthcoming.

In an effort to avoid jeopardizing the settlement and to achieve compliance with the provisions of the MSP, the plaintiff and defendant jointly filed a motion for Declaratory Judgment seeking (1) approval of the settlement, (2) a declaration that the interests of Medicare are adequately protected by setting aside a sum of money to fund Mr. Bessard’s reasonably anticipated future medical expenses related to the injuries claimed and released in the lawsuit, and (3) an order setting that amount aside from the settlement proceeds and depositing it into an interest bearing checking account to be self-administered by Mr. Bessard.

The Court set the matter for an evidentiary hearing and ordered service to be made by the Clerk of Court on the Secretary of Health and Human Services, the chief counsel of HHS/OGC for Region VI, and the civil chief of the office of the United States Attorney for the Western District of Louisiana. By letter dated August 20, 2012 from the office of the United States Attorney for the Western District of Louisiana, the Court was advised that HHS/CMS would not participate in the hearing.

At the hearing, the Court heard testimony from Patricia Kent, staff attorney with Gould & Lamb LLC, who was accepted as an expert in MSA/MSP issues, and who explained how the MSA evaluation was prepared. Although the most recent reports from the physicians treating Mr. Bessard did not state that additional diagnostic testing was necessary or that Mr. Bessard would require future visits with his physicians or additional physical therapy, the standard applied by Gould & Lamb in preparing the MSA was to consider all reasonably foreseeable medical expenditures.

The Court found that the methodology used by Gould & Lamb to calculate the estimated future medical costs, as set forth in the MSA, was both reasonable and reliable. The Court further found based upon MS. Kent’s testimony, that the future services listed in the MSA were reasonably foreseeable, adequately considered Medicare’s interests under the MSP, and the amount set forth in the MSA adequately protected Medicare’s interests.

As the premier and most trusted MSP vendor in the country, this case again highlights the usefulness and benefits of Gould & Lamb’s comprehensive array of MSP services. In addition to Mandatory Insurer Reporting, Conditional Payment Resolution, Medicare Set Asides, Post Settlement Account Administration, Prescription Drug Program, Future Medical Costs Projections, and Life Care Plan services, Gould & Lamb also offers Settlement Language Guide, Settlement Document Review, MSP Exposure Analysis, and Expert Testimony services.

Gould & Lamb provides its clients with Medicare Compliance Services and Programs focused on reducing claim costs and positioning claims for settlement. To this end, Gould & Lamb has prepared a Settlement Language Guide to assist insurers and self insured entities navigate the complex sea of Medicare Secondary Payer compliance. The guide contains language for possible claims settlement scenarios with a description and analysis of possible actions. Once the Conditional Payment or Medicare Set Aside issue has been brought to light, Gould & Lamb will assist with recommending MSP appropriate and protective settlement language. If you have already produced settlement documentation that contains such language, Gould & Lamb will review same and make recommendations on any needed changes, additions, or deletions. Gould & Lamb also offers our clients detailed and specific to the claim analysis of all Medicare Secondary Payer exposure issues that may exist in your case. Gould & Lamb’s extensive and experienced MSP legal team will provide a written analysis, including statutory, regulatory, and case law citations, that outlines any Medicare Secondary Payer exposure and recommends solutions to any discovered potential problems or issues. Gould & Lamb also provides expert advice on MSP issues, available to provide expert testimony on any MSP issue at meetings, mediations, depositions, hearings, trials, or any other event our client deems our expert analysis helpful or necessary.

Download the MSP Compliance Protocols user guide today!

About the Author: Russell S. Whittle, Esq., is the Vice President of MSP Compliance for Gould & Lamb, LLC. In his twenty plus years of practice prior to joining Gould & Lamb, LLC, Mr. Whittle practiced primarily in the area of insurance defense, representing the interests of large insurers and employers in both workers’ compensation and general automobile liability matters.

Gould & Lamb is a global leader of MSA/MSP Compliance Services in the country, serving domestic and international insurance companies, third-party administrators and self-insured entities.

The June 28, 2012 decision by the United States Supreme Court on the Affordable Care Act may go down as one of those “Where were you when the ruling was announced?” type of moments. As both a self-proclaimed C-SPAN and political junkie, I followed the debate from the beginning, when President Obama signed into law the Patient Protection and Affordability Care Act of 2010 (PPACA) and the Healthcare and Education Reconciliation Act of 2010 (HCERA), including reading the transcripts of the oral arguments made to the U.S. Supreme Court a few months back.

The reason for my interest was a key provision pertaining to prescription drug plans which, if enacted, will have an affect on Medicare Part-D and, therefore, on Workers’ Compensation Medicare Set-Asides (WCMSA). PPACA § 2502 pertains to the elimination of the exclusion of coverage of certain drugs that traditionally have not been compensable under Medicare Part-D.

Now that the healthcare law has been upheld, beginning in 2013 Medicare Part-D will begin to cover Benzodiazepines and barbiturates used for certain conditions such as epilepsy, cancer, or a chronic mental disorder. Currently, these medications are excluded from Medicare Part-D prescription drug plans.

Benzodiazepines are those medications such as Diazepam (Valium), Clonazepam (Klonopin), Alprazolam (Xanax), and barbiturates and include the commonly used medication Phenobarbital. Although we do not see use of Phenobarbital often in the WC arena, Benzodiazepines are utilized for many conditions in WC, such as anxiety, sleep, and muscle relaxation.

Normally, these medications would not generate any concern as they are typically dispensed as generic and are relatively inexpensive. However, the expansion of Medicare to cover them will have a direct impact on WCMSAs in two ways.

First, individuals may request the brand name Benzodiazepines in lieu of a generic at the time of fill. Average Wholesale Price (AWP) of brand name Valium costs about $3 per tablet and averages 15 times higher than the price of the generic equivalent Diazepam.

Second, although Benzodiazepines are abused less than opioids, there is now the potential for an increase in prescriptions for these medications. Benzodiazepines abuse is commonly seen when there is an established pattern of opioid abuse or with an illicit substance. Therefore, the potential for increased rates of abuse may rise. The WC community is already struggling with overuse of opioid medications and, conceivably, the new coverage could compound the problems the workers’ compensation community is seeing with the abuse of opioids.

These changes are certainly something to keep any eye on. They provide a strong argument for both early intervention strategies and prescription management and requires further close scrutiny on how it may affect the bottom line.

Further information on these and other changes can be found at:

http://www.medicareadvocacy.org/InfoByTopic/Reform/10_04.08.MAandPDChanges.htm

About the Author: William F. Bell, Jr. is the Senior Clinical Pharmacy Specialist for Gould & Lamb, LLC. His primary responsibility is the review of a claimant’s pharmacotherapy regimen and the identification of off-label medications in a Medicare Set Aside Allocation. He has given numerous presentations on the subject of medication management and how it relates to Workers’ Compensation and Medicare Set Aside Claims. Bill has also authored two continuing education articles for the Pharmacist’s Letter, a nationally known education resource for practicing pharmacists.

Gould & Lamb is a global leader of MSA/MSP Compliance Services in the country, serving domestic and international insurance companies, third-party administrators and self-insured entities.

The United States District Court for the District of Oregon, Portland Division recently published its opinion in the case of Oregon State Bar Professional Liability Fund v. United States Department of Health and Human Services and Kathleen Sebelius on March 29, 2012. At issue was whether the Oregon State Bar Professional Liability Fund (PLF), the insurer covering legal malpractice actions against Oregon attorneys, was an “applicable plan” required to report under Section 111 on the Medicare, Medicaid and SCHIP Extension Act as a Responsible Reporting Entity (RRE).

In July of 2010, the PLF wrote a letter to the Department of Health and Human Services requesting a formal opinion that the Reporting Act did not apply to the it. Secretary Sebelius responded by advising PLF that it was a “liability insurer” within the meaning of the Extension Act. The PLF then filed suit requesting a declaratory judgment that PLF was not an applicable plan, that the Secretary acted outside her authority in determining that PLF was an RRE, that the Secretary violated the Administrative Procedure Act in that determination, and that the District Court could review the Secretary’s decision concerning the PLF.

The Secretary moved for summary judgment arguing that the Medicare statutory scheme left no issue of material fact for the trial court. In short, the United States took the position that the Medicare Secondary Payer Act and the federal regulations empowering it were clear that the PLF, as a liability insurer, was subject to Mandatory Insurer Reporting.

In denying the government’s motion, Judge Marco A. Hernandez analyzed the role of professional liability insurance and made what appear to be several leaps of logic regarding its applicability to Medicare Secondary Payer issues and the reporting obligation. The court determined that PLF was, in fact, a liability insurer within the meaning of 42 USC 1395y(b)(2). However, the judge reasoned that because the insurance plan covers claims against attorneys who cause economic damage relating to the provision of legal services and does not cover claims of tortious conduct that result in bodily or emotional injuries the PLF does not become an RRE. Because PLF would “never have primary responsibility” for medical items claimed by a beneficiary, they are excused from the reporting obligation.

Interestingly, the judge acknowledged that a malpractice case “could” involve medical expenses paid conditionally by Medicare. However, he assumed that those injuries occurred as the result of the underlying accident or case being handled by the alleged negligent attorney. The judge failed to recognize that the nature of the malpractice alone could give rise to emotional or personal injuries. He further stated that the PLF does not cover bodily or emotional injuries. A close review of Medicare statutes and policy guidance indicates that insurance coverage is not what Medicare requires to be reported in a settlement involving a Medicare beneficiary but, rather, what is claimed and released in the process. Thus, if bodily or emotional injuries are claimed and released, the reporting obligation is triggered. Based upon a somewhat limited analysis of an automobile accident case, Judge Hernandez determined that the PLF was not the type of plan that Congress intended to saddle with the reporting obligation.

Based on the foregoing, the court determined that the alleged violation of the Administrative Procedure Act and whether the Secretary acted outside her authority were moot.

As of this writing, an appeal has not been filed by the United States. However, I fully expect that the decision will be appealed as the ruling seems to both misconstrue the arguments put forth by the United States and the legislative intent of the MMSEA. Judge Hernandez seems to assume that because he cannot envision a scenario in which Medicare’s interests would be raised by inadequate legal representation that they do not exist. A closer look at the intent underlying the MMSEA and the Medicare statutory scheme suggests differently.

Download the MSP Compliance Protocols user guide today!

About the Author: Russell S. Whittle, Esq., is the Vice President of MSP Compliance for Gould & Lamb, LLC. In his twenty plus years of practice prior to joining Gould & Lamb, LLC, Mr. Whittle practiced primarily in the area of insurance defense, representing the interests of large insurers and employers in both workers’ compensation and general automobile liability matters.

Gould & Lamb is a global leader of MSA/MSP Compliance Services in the country, serving domestic and international insurance companies, third-party administrators and self-insured entities.

Denial of Medicare benefits (even non-accident related Medicare benefits) are increasing. A beneficiary may face denial of benefits for medical treatment related or unrelated to a workers’ compensation, liability, or no-fault claim.

Denial of medical benefits that are unrelated to the claimed injury or illness can occur for many reasons. On many occasions bills are improperly submitted by medical providers.  If a bill erroneously documents that the treatment is related to a workers’ compensation/other insurance claim or is not supplied at all, Medicare may deny coverage until the bill is properly resubmitted.  In other instances, incorrect or vague diagnoses codes are provided via reporting pursuant to Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007, causing CMS to deny future benefits.

Beneficiaries may also be denied benefits related to a workers’ compensation, liability or no-fault claim.  As required by the Medicare Secondary Payer Act, a beneficiary is responsible for exhausting Medicare Set-Aside funds to cover their future medical expenses which would otherwise be paid by Medicare.  At the time of settlement, it is important to advise the claimant of their obligation to protect Medicare’s interests regarding past and future medical expenses.

The right to appeal decisions denying care or benefits is a five-step process that starts with standard or expedited review by the entity making the original determination, with progression through administrative channels and to federal court, if necessary.  Beneficiaries and Medicare-participating health-care providers can file Medicare appeals when a claim is denied or even partially denied.

So, the question is, what remedy should be offered to the injured party whose benefits have been denied?  In addition to diligence on the part of Responsible Reporting Entities (RREs) including prompt and accurate reporting, confirming CMS records acceptance, and ensuring that misreported information is corrected and resubmitted, injured parties should be advised to utilize the normal appellate process within Medicare regarding denied treatment or benefits.

Although very similar to the Medicare Managed Care Appeals and Grievances as well as the Medicare Prescription Drug Appeals and Grievances process, the original Medicare Part A and B, Fee for Service, process has its own appeals process and procedures.

Appealing Medicare Decisions

Once an initial claim determination is made, beneficiaries (as well as participating providers, physicians and other suppliers) have the right to appeal.  However:

• Physicians and other suppliers who do not take assignments on claims have limited appeal rights.
• Beneficiaries may transfer their appeal rights to non-participating physicians, or other suppliers who provide the items or services and do not otherwise have appeal rights.
• Form CMS-20031 must be completed and signed by the beneficiary and the non-participating physician or supplier to transfer the beneficiary’s appeal rights.
• All appeal requests must be in writing.

Five Levels in the Appeals Process

Medicare offers five levels in the Part A and Part B appeals process:

1. Redetermination by Fiscal Intermediaries, Carriers or Medicare Administrative Contractors

The Centers for Medicare & Medicaid Services (CMS) contracts with private insurance companies (called “carriers” for Part B, “fiscal intermediaries” for Part A, or “Medicare administrative contractors”) to perform many processing functions on behalf of Medicare, including local claims processing and first level appeal adjudication functions.  A redetermination is an examination of a claim by the fiscal intermediary, carrier or Medicare administrative contractor personnel that are from the individual(s) who made the initial determination. The appellant (the individual filing the appeal) has 120 days from the date of receipt of the initial claim determination to respond to the contractor.

The appellant should attach any supporting documentation to their redetermination request. Contractors will generally issue a decision (either a letter or a revised remittance advice) within 60 days of receipt of the redetermination request. The redetermination request should be sent to the contractor that issued the initial determination to file an appeal. A minimum monetary threshold is not required to request a redetermination.

2. Reconsideration by a Qualified Independent Contractor

A party to the redetermination may request a reconsideration if dissatisfied with the redetermination. Section 521 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) included provisions aimed at improving the Medicare fee-for-service appeals process. Part of these provisions mandate that all second-level appeals (for both Part A and Part B) be conducted by qualified independent contractors.  The qualified independent contract reconsideration process allows for an independent review of medical necessity issues by a panel of physicians or other health care professionals. A minimum monetary threshold is not required to request a reconsideration.  However, a written reconsideration request must be filed within 180 days of receipt of the redetermination (a request for a reconsideration may be made on Form CMS-20033).

The request should clearly explain why the appellant disagrees with the redetermination. A copy of the MRN, and any other useful documentation should be sent with the reconsideration request to the qualified independent contract identified in the MRN. Evidence not submitted at the reconsideration level may be excluded from consideration at subsequent levels of appeal unless “good cause” is shown for submitting the evidence untimely.  Reconsiderations are conducted on-the-record and, in most cases, the qualified independent contract will send its decision to all parties within 60 days of receipt of the request for reconsideration.

3. Hearing by an Administrative Law Judge (ALJ)

If at least $130 remains in controversy following the qualified independent contract’s decision, a party to the reconsideration may request that a hearing be conducted by Administrative Law Judge within 60 days of receipt of the reconsideration.

Appellants must also send notice of the ALJ hearing request to all parties to the qualified independent contract reconsideration and verify this on the hearing request form or in the written request. ALJ hearings are generally held by video-teleconference (VTC) or by telephone.  Appellants may also ask the Administrative Law Judge to make a decision without a hearing (on-the-record). Hearing preparation procedures are set by the Administrative Law Judge. CMS or its contractors may become a party to, or participate in, an ALJ hearing after providing notice to all parties to the hearing. The Administrative Law Judge will generally issue a decision within 90 days of receipt of the hearing request.

4. Review by the Medicare Appeals Council within the Departmental Appeals Board, (hereinafter “the Appeals Council”)

If a party to the ALJ hearing is dissatisfied with the Judge’s decision, the party may request a review by the Appeals Council. There are no requirements regarding the amount of money in controversy. The request for Appeals Council review must be submitted in writing within 60 days of receipt of the Administrative Law Judge’s decision, and must specify the issues and findings that are being contested.   In general, the Appeals Council will issue a decision within 90 days of receipt of a request for review (though that timeframe may be extended for various reasons).

5. Judicial Review in U.S. District Court

If at least $1,300 or more is still in controversy following the Appeals Council’s decision, a party to the decision may request judicial review before U.S. District Court Judge.  The appellant must file the request for review within 60 days of receipt of the Appeals Council’s decision.

While there may not be a remedy to stop denials of Medicare and/or medical benefits or treatment, there are certainly steps to mitigate the occurrence. Ensuring prompt and accurate reporting of data, and confirming CMS records acceptance, is a key first step.  In addition, if a beneficiary’s benefits are denied, it is imperative they are advised of the normal appellate process they can use within Medicare.  This combination of initial data being provided along with clear and accurate rules being provided to beneficiaries is critical to protecting future benefits.

About the Author: Christie Britt is the Vice President of Operations overseeing the extensive operations of Gould & Lamb.   She has vast knowledge of Medicare Set Asides and Post-Settlement Administration from an insurance claims perspective. Christie is MSCC certified and has her Green Belt Certification in Six Sigma.  She is also a member of the National Association of Medicare Set Aside Professionals (NAMSAP) and the Workers’ Compensation Claims Professionals (WCCP).

Gould & Lamb is a global leader of MSA/MSP Compliance Services, serving domestic and international insurance companies, third-party administrators and self-insured entities.