Archive for the ‘ Medicare Secondary Payer Compliance ’ Category

US Court of Appeals Provides Opinion on Michigan Spine and Brain Surgeons v. State Farm

Russell S whittle, Esq VP MSP ComplianceThe United States Court of Appeals for the Sixth Circuit published its opinion in Michigan Spine and Brain Surgeons, PLLC v. State Farm Mutual Automobile Insurance Company on July 16, 2014.  The long awaited decision addresses the Circuit’s view regarding the Medicare Secondary Payer (MSP) Act’s private cause of action provision. At its core, the parties asked the court to determine whether a health care provider that had treated a Medicare beneficiary following an automobile accident could pursue the insurance carrier under the (MSP) where the carrier had denied liability for the accident.

State Farm argued that it was not a “primary plan” under the MSP Act, nor was it a group health plan. Because State Farm was a non group health plan, the MSP action could not proceed, they asserted. The District Court had previously ruled in favor of State Farm on the issue, construing the admittedly confusing MSP Act to require denial of coverage based upon the Medicare eligibility of the injured plaintiff. Michigan Spine and Brain Surgeons argued that the MSP, when read in conjunction with the clear intent of Congress to ensure the fiscal health of Medicare, operated to make State Farm a primary plan and thus a target for recovery from Michigan Spine despite the ambiguity in the statute concerning the MSP application to group versus non-group health plans.

The Sixth Circuit declined to read the MSP statute narrowly, finding that the intent of the MSP statute was to allow providers to recover from liability insurance carriers that make primary payment on behalf of a Medicare beneficiary despite arguments that the insurance companies should not be considered group health plans, subject to the provider’s private cause of action.

The decision, as noted, broadly construes the MSP statute making recovery actions by providers against insurance companies that deny liability more likely, at least in the Sixth Circuit (Kentucky, Michigan, Ohio and Tennessee). It underscores the importance of determining Medicare eligibility and the extent to which an injured party received medical care that may formulate the basis of a private cause from a provider seeking reimbursement for Medicare related expenses following an accident involving no-fault coverage. The case is sure to formulate the basis of reimbursement actions from providers going forward. It is vitally important in the handling of these cases to recognize the potential for MSP actions and to address those issues during the discovery and resolution stages of claims and to ensure that a settled case remains closed.


Click Here to Download the MSP Compliance Protocols User Guide from Gould and Lamb

Download the MSP Compliance User Guide!


About the Author: Russell S. Whittle, Esq., is the Vice President of MSP Compliance for ExamWorks Clinical Solutions (formerly Gould & Lamb). In his twenty plus years of practice prior to joining the company, 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.

CMS Amends the Workers Compensation Reference Guide

Russell S whittle, Esq VP MSP ComplianceOn May 29, 2014, the Centers for Medicare and Medicaid Services (CMS) amended the recently released Workers’ Compensation Reference Guide published in February 2014. The changes affect medical review, treating physician reports, pharmacy records and Merit Orders, among others.

Section 4.1.4, “Hearing on the Merits of a Case,” is particularly noteworthy. With the publishing of the February Guide, no language specifically addressed evidentiary orders from the finder of fact. Presumably, and based upon longstanding CMS and WCRC procedure, evidentiary orders were given deference regarding the nature and extent of future medical care and whether Medicare had been adequately protected. The omission of any guidance regarding how merits orders would be utilized in the review process may have suggested that those orders would not be subject to scrutiny. This notion was further bolstered by CMS’ recent discussions with many stakeholders regarding their newly expressed desire to consider state statutory requirements as critical to the future medical component of a claim despite a finding that could be contrary to Medicare’s interests.

Taken directly from the CMS website, the entire WCMSA Reference Guide can be found here, including the added sections.

4.1.4      Hearing on the Merits of a Case

When a state WC judge approves a WC settlement after a hearing on the merits, Medicare generally will accept the terms of the settlement, unless the settlement does not adequately address Medicare’s interests. If Medicare’s interests were not reasonably considered, Medicare will refuse to pay for services related to the WC injury (and otherwise reimbursable by Medicare) until such expenses have exhausted the dollar amount of the entire WC settlement. Medicare will also assert a recovery claim if appropriate.

  • If a court or other adjudicator of the merits (e.g., a state WC board or  commission) specifically designates funds to a portion of a settlement that is not related to medical services (e.g., lost wages), then Medicare will accept that designation.

On its face, the amended language allows the reviewing entity the exclusive power to determine whether Medicare’s interests were adequately protected despite an evidentiary finding to the contrary. Accordingly, even where state adjudicators determine that a Medicare Set Aside is appropriate and its rationale sound, the review contractor will be the final voice with respect to Medicare’s protection. An order on the merits, then, is not truly dispositive of a WC case until Medicare has agreed and accepted it.

The bulleted portion of the added language does clarify, however, that where a portion of a WC settlement is designated for non-medical damages, Medicare will accept the reasoning of the court. As a practical matter, if the majority of a settlement includes a large non-medical award, Medicare would be restricted from requiring that funds be placed in a Medicare Set Aside account exceeding the amount that the court determined as appropriate for the case.

For interested stakeholders, carriers, third party administrators, and litigants, the amendment raises some practical concerns. First, what will CMS consider a hearing on the merits? Presumably, the added language would exclude WC settlements that are not preceded by a true evidentiary hearing including presentation of witnesses, documents, and legal argument. Second, will the determination as to whether Medicare’s interests were adequately protected require review of the evidentiary proceedings leading to added time and expense for the submitting party?  Further, what does the language “Medicare will also assert a recovery claim if appropriate” mean? Does it signal a readiness for Medicare to actually proceed against parties that fail to consider its interests by setting funds aside for Medicare-covered expenses related to the accident? These questions will hopefully be addressed as parties utilize the new procedures and guidelines provided by the new Reference Guide.

Section 9.4.4, “Medical Review” establishes that, where multiple dates of injury are being settled, all body parts must be supported by medical records. Consistent with current policy, medical records for the previous two (2) years must be included in an MSA submissions package.

Section 9.4.6.2 , “Pharmacy Guidelines and Conditions” was added to clarify the CMS position on drug weaning and tapering and also removed any reference to Drug Tables for physician dispensed medication. As to weaning and tapering, all evidence supporting a reduction in medication will be considered as well as any position taken by treating doctors as to medication usage. However, the added section requires that a statement by a treating physician regarding the reduction must be supported by actual evidence that a certain drug’s  usage has been, or will be, reduced. A statement unsupported by pharmacy records showing decreased frequency of use may be unacceptable to CMS.

Section 10.7, Section 35 also addresses medical records. Where a settlement addresses compensable (related) body parts and no treatment has been provided or received within two (2) years, all treating doctors must complete a statement that no treatment was received and that no treatment for the body part is necessary. It must also include the last date of treatment.

Finally, Section 10.8, Section 40 clarifies the need for Payment Histories. Submissions packages must contain an entire payment record for all conditions, including those that were denied. Explanations as to why a pay history does not exist may be acceptable in certain instances such as where no printable history exists because no payments were made and a reserve was never established on the claim.

Other additions were made to the guide, but those listed above are certain to impact the review and approval process. In all, it appears that CMS will begin to accept reasonable explanations for excluding unrelated body parts from an MSA and may be softening somewhat on the necessity of collecting medical records and pay histories where they do not exist or are outside the reach of the submitting party. However, evidence of weaning and tapering must be clear and current documentation must show that drug regimens have been altered in a meaningful way.

Gould & Lamb will work within the amended guidelines for review and submission and will incorporate the recent changes into its processes to ensure timely and accurate CMS and WCRC review and approval. Some of the additions may require changes to evidence gathering and presentation, including the physician certification provision where no treatment has been received. However, with the newly published amendments to the Reference Guide, we hope that the process itself will be more transparent resulting in more seamless solutions to Medicare compliance in workers’ compensation cases.

Click Here to Download the MSP Compliance Protocols User Guide from Gould and Lamb

Download the MSP Compliance User Guide!


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.

Workers Compensation Review Center (WCRC) Changes Position on Development Letters

As a result of Gould & Lamb’s continued advocacy with CMS Central Office, WCRC, and Regional Offices, Workers’ Compensation Medicare Set Aside submitters will see a light at the end of the tunnel.  Based on direct conversations, we anticipate a turn-around in what has been an arduous approval process with repeated development requests that were neither germane nor reasonable.  The WCRC is starting to address the back log that has accumulated since November 2013, has restated their commitment to abide by state specific statutes, and to refrain from seeking unnecessary, and unrelated medical records as part of its review process.   The WCRC has expressed its commitment to expedite review of the backlog for all affected submitters.

Since the publication of CMS’ WCMSA Reference Guide in November 2013, there has been a marked increase in the number of development requests from the WCRC for medical records purportedly to enable the reviewers to accurately price future Medicare costs over a claimant’s life expectancy.  To submitters and other stakeholders, the WCMSA Reference Guide, originally intended to herald a new era of transparency and accountability, , resulted in the WCRC increasing the issuance of development letters seeking medical records dated within six months of the submission or the reopen date — whichever is was later.

No Federal Preemption

The WCRC justification for its expanded request for medical records and the authority on which it relied is the November 2013 WCMSA Reference Guide and its subsequent update.  The assumptions made by the WCRC were:

  • The MSP preempts the state WC law.
  • Even if the claimant treats outside the WC system and the carrier has no obligation to pay for the treatment Medicare is not primary.
  • Even if the claimant is no longer entitled to medical benefits by operation of law, Medicare is still not the primary payer and the employer/carrier should bear the associated costs.

Moreover, the WCRC has asserted that it is doing “an investigation” and is not limited only to the records for treatment of the WC injury but to the claimant’s family doctor medical records, if there are no current records from the WC provider.  This was a firm position until recently and accounted for countless delays in the determination process.  Through Gould & Lamb’s advocacy, we successfully established that CMS and the WCRC must give deference to state specific statutes because there is no federal preemption.   The MSP is a secondary payer law and where there is not otherwise a primary payer, Medicare is absolutely the primary payer.   We continue to advocate with CMS to adopt clear and unambiguous polices so that there is no confusion on the part of the WCRC –the Agency charged with following CMS policies and reviewing submitters Life Care/Future Treatment Plans.  We urge CMS and the WCRC to adopt policies that comport with the public policy of the MSP and the opinions of various U.S. Federal Courts that Medicare stands in the same shoes of the beneficiary and where the state does not require the carrier to pay, then Medicare has no right of recovery or subrogation under any theory of law.

We are pleased to see that the pace of approvals has picked up dramatically and the number of development requests has abated.   We are committed to continuing to work with the CMS, the WCRC, and the Regional Offices to ensure a fair and transparent review/approval process.

For more information or if you have questions, please contact your Gould & Lamb Regional Claims Consultant at 1.866.MSA.FILE (672.3453).

House Passes Measure to Delay ICD-10 Transition

STOP THE PRESSES… Possible Delay in ICD-10 Transition

By voice vote on Thursday, March 27, the House approved another temporary (one-year) fix to prevent steep cuts in Medicare’s physician reimbursement scheduled to take effect March 31. It now moves to the Senate which is expected to take action within the next few days. The draft legislation does not address the problems with the Workers’ Compensation Medicare Set-Aside approval process. However, there is language that speaks to a possible delay in the ICD-9 to ICD-10 transition, which could impact the MMSEA Section 111 mandate for reporting ICD-10s.  Other key inclusions include a two year delay in the provision overturning two U.S. Supreme Court decisions that prevented state Medicaid agencies from recovering 100 percent of their medical payments from the proceeds of liability settlements involving Medicaid beneficiaries and at least a one-year delay Medicaid mandated that providers move from ICD-9 coding to much more complex ICD-10 coding which will have a significant impact on insurers data reporting and bill payment functions.

CMS Issued Alert

It was only on this past Tuesday, March 25, 2014, that the Centers for Medicare and Medicaid Services (CMS) published an Alert regarding ICD-10 Diagnosis Codes, which further tightens the list of acceptable codes for Mandatory Insurer Reporting (MIR) purposes.

ICD-10 codes beginning with the letter “Z” are related to factors influencing health status and contact with health services, and are considered invalid for MIR.  This includes all 19 Diagnosis Code fields as well as the Alleged Cause of Injury, Incident or Illness field.

MIR ICD-9 Codes for Free

The Alert also clarifies the use of ICD-10 codes beginning with the letters V, W, X and Y.  These codes are related to external causes of morbidity and mortality, and may only be populated in the Alleged Cause of Injury, Incident or Illness field, as long as they are not on the list of excluded codes in the NGHP User Guide.  Additionally, these V, W, X and Y codes are invalid for use in the 19 ICD-10 Diagnosis Code fields.

Gould and Lamb has applied the appropriate quality audits, alerts, and metrics to ensure our customers are compliant with the transition.  Should you have any questions regarding this or any other topic related to MIR, please contact your MMSEA Compliance Manager or our Reporting Services Department at mirservice.support@gouldandlamb.com or 866-672-3453 ext. 1122.

Additional details on the bill can be found here.

CMS Clarifies Its February Alerts Regarding Section 111, MMSEA Reporting

Russell S whittle, Esq VP MSP ComplianceOn February 28, 2014 the Centers for Medicare and Medicaid Services (CMS) published its formal notice of the change in the reporting threshold for liability (including self insurance) settlements, judgments, awards or other payments.  The notice follows the recent publication of two Alerts of February 18.   Those Alerts announced a potential change in the Mandatory Insurer Reporting obligations of Responsible Reporting Entities pursuant to the changes instituted by the Strengthening Medicare and Repaying Taxpayers (SMART) Act.

In the new notice, CMS has advised that an updated Non-Group Health Plan User Guide, Version 4.2 Chapters I – V, can now be downloaded to incorporate the change in the Medicare, Medicaid and SCHIP Extension Act (MMSEA) necessitated by its February 18 changes and the SMART Act requirements.

CMS has now determined that, for certain liability insurance settlements, judgments, awards or other payments:

  • The Current mandatory reporting threshold for liability insurance (including self-insurance) Total Payment Obligation to Claimants is $2000 for settlements, judgments, awards or other payments occurring on or after October 1, 2013.
  • For settlements, judgments, awards or other payments exceeding $1000 on or after October 1, 2014, reporting is required no later than the first quarter of January, 2015.  This is a change from the previously published threshold amount of $300.
  • Error Code CJ07 – where Ongoing Responsibility for Medical has not been accepted and where the settlement, award or judgment amount does not meet the reporting threshold – will still occur on claims submitted with a cumulative TPOC Amount less than $300.  It is expected to be changed to coincide with the new $1000 reporting threshold later this year.

As had been discussed in the wake of the February 18 Alerts, questions had been raised regarding the effective date of the changes and the ability of CMS, from a technical standpoint, to implement them. The notice now puts a clear timeframe on the applicability of the change, the settlements to which they apply and the anticipated technical Error Code update.

Gould & Lamb will incorporate the new changes into its Mandatory Insurer Reporting Services program for all settlements that are effected by the change and will also add the appropriate logic to ensure Error Coding is consistent with any CMS update.