On Thursday, April 25, 2013 Panelists John P Albert – Acting Director, Division of Medicare Secondary Payer Policy and Operations; Cynthia Gross – Health Insurance Specialist, Division of Medicare Secondary Payer Policy and Operations; Elizabeth V. Poole – Health Insurance Specialist, Division of Medicare Secondary Payer Policy and Operations; and Barbara Jean Wright – Senior Technical Advisor, MSP were welcomed by almost 200 members of the National Alliance of Medicare Set Aside Professionals at its annual conference in Baltimore, Maryland.   During the one hour  presentation, CMS Panelists discussed various changes to the CMS website, the Statement of Work (SOW) for the new WCRC Contractor for completing and returning determinations in a timely manner for newly submitted WCMSAs, the new web-portal for submissions/re-considerations and the recent CMS Town Hall Teleconference. They also responded to attendee’s questions.

Changes to CMS Website

CMS reiterated that over the past several years they have been working diligently to make the CMS website more “user-friendly”  more efficient and easier for the user to find information.  The Coordination of Benefits and Medicare Secondary Payer tabs of the CMS.gov website are undergoing updates.  The first completed phase is the WC Agency Services Section which has been replaced by the WCMSA section.   One of the most significant improvements is a tab for “new information.” All newly released information will be housed and maintained for one year, after which it will be archived but remain accessible.  The URL for direct access is: http://www.cms.gov/Medicare/Coordination-of-Benefits/Workers-Compensation-Medicare-Set-Aside-Arrangements/WCMSA-Overview.html

Established Turnaround Time for WCRC

CMS made it clear that when the new contract was awarded to Provider Resources, Inc. (PRI) it implemented a Statement of Work (SOW) to ensure timely responses to allocations submitted in the established WCMSA process.   For new allocations, the WCRC now has twenty two (22) business days to review a proposal that is “clean.”  In other words, if the WCRC does not need to “develop” or request for additional information, Allocators should receive the CMS determination within twenty two (22) working days after receipt by WCRC.  If the WCRC is required to develop for additional information, there will be an additional 17 days from the date of receipt of the information.  If the correct information is not received, then an additional 17 days will be added.   It is therefore important to submit all information at the time of initial submission and, where additional development requests are made, to provide the requested information in a timely manner in order to shorten the response time.

New Web-Portal

The new web-portal is up and running and CMS expressed extreme satisfaction with the fact that the utilization of the web-portal as compared to paper submissions is greater than what was originally anticipated.  More than 90% of all allocations are submitted through the web-portal which is designed to be the most efficient means for the WCMSA process. Electronic submissions are encouraged over paper submissions.

CMS Townhall Teleconference April 9, 2013

The CMS Panelists reiterated that one of the focuses of the WCRC contract with new Contractor PRI is outreach and education.   To that end, CMS held its first of what it hopes to be many such Town Halls in the coming years.  They expect to have similar Town Hall conferences  twice per year.   The recent teleconference Town Hall was viewed as a great success with Pharmacists, Clinical, and Legal representation from PRI answering very detailed questions and providing key operational information.  CMS expects to publish a transcript of the April 9, 2013 call as soon as it obtains approval to do so.  It is anticipated that there will be about 37 pages of single-spaced typewritten information in the  transcript.   Due to the ongoing confirmation process for the CMS Administrator, the dissemination of the transcript to the public is on hold until the confirmation process is completed and authorization is provided to release the information.   The transcript is expected to be a good resource for individuals who were not able to attend the teleconference.   Ms. Gross did, however, point out that while every attempt was made to clarify and provide accurate information during the call, the written memoranda and policies of the agency always prevail over information provided in an oral forum such as the teleconference.   CMS is also looking to social media to facilitate its reach through the use of Twitter, Facebook and U-Channel.

Denied Claims for Medicare Beneficiaries with Open Workers Compensation Claims

The CMS panel addressed the issue of denied claims for Medicare beneficiaries and stated that the fact that there is an open MSP occurrence or common working file should not result in denial of benefits for Medicare beneficiaries.   The panel believed that the situation is improving and that there is, unfortunately, nothing that vendors can do with this issue.   They reiterated that physicians are required to bill correctly and that the agency has been completing additional edits and are looking at eliminating certain codes to minimize the incidence of denied claims.  However, CMS maintained that most cases were appropriately denied mostly due to the fact that the affected beneficiaries did, in fact, have other insurance that was primary to Medicare.

A few FAQ’s

CMS had a few pre-approved questions that were submitted in advance of the visit.  The  responses were no surprise to the industry and were as follows:

Q:        Since pricing an MSA is not an exact science, why doesn’t CMS accept the allocation as submitted?

A:         The CMS response (which garnered a huge laugh from attendees) essentially indicated that Allocators have their own assessment of future Medicare related expenses and CMS has its own.

Q:        Will CMS ever provide a new determination when the claim does not settle and things have changed?

A:         No.  CMS reiterated that they do not have enough resources to re review submissions and that WCMSA’s should not be requested prior to the point of MMI so that the claimant’s condition is stable and future care can be reasonably evaluated.

As CMS usually anticipates settlement within four months of an approved WCMSA, if the parties are not reasonably expected to the settle, the WCMSA should not be submitted until there is reasonable certainty that a settlement will occur. Once an approval is offered,  absent a mistake or because CMS has misconstrued the evidence, the parties will be unable to obtain a revised allocation.

Q:        What sources does CMS use for Usual and Customary Charges and why are  State Laws not followed in pricing decisions?

A:         There is no direct system that is used for pricing.  The panel reiterated that the WCRC utilizes evidence based treatment guidelines and multiple sources are used.   It is not the Agency’s intent to include services that are not covered by the WC state law.   However, it is up to the parties to address anything that is not covered by the state law and provide the specific information directly in the MSA.  The specific arguments must be outlined.   Ms. Gross further stated that if the state law does not cover unauthorized case, it is not the CMS intent to price care related to unauthorized treatment. All arguments as to authorization must be made specifically within the MSA.

All in all, the visit from CMS was viewed as an overwhelming success by both the CMS panelists and NAMSAP conference attendees.

Gary Patereau, of the Louisiana Association of Self Insured Employers, certainly deserves the thanks of the Alliance and all attendees as does the NAMSAP Board of Directors for orchestrating the very informative CMS visit. Gould & Lamb will continue to keep you advised of any important developments regarding WCRC processes, procedures and news as it is received

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.

We’re a little more than half way through 2012 and thus far we have seen some significant changes in the Mandatory Insurer Reporting landscape.

The Center for Medicare and Medicaid Services (CMS) made long awaited updates to the Medicare Medicaid SCHIP Extension Act (MMSEA) User Guide for Non-Group Health Plans (NGHP).  These may have been the result of CMS listening to Town Hall teleconference attendees, fielding Section 111 e-mail submitter questions  and interacting with industry committees.

The latest version of the User Guide introduced new formatting with sections separated into functional categories. The new NGHP User Guide also includes additional charts and tables affording readers a better understanding of context and work flow.

CMS announced during a recent Town Hall teleconference the merging of functionalities between the Coordination of Benefits Contractor and the Medicare Secondary Payer Contractor. The industry will benefit from the increased efficiency in processing of MIR data and Medicare Secondary Payer identification and handling conditional payment liens.

While some changes have been beneficial, others have not been as effective.

Earlier this year, the Department of Health and Human Services (DHS) issued a Medicare Learning Center ‘News Flash’ advising Medicare fee for service providers on proper procedures for identifying primary payers and making correct and timely billing submissions to Medicare. Despite this notification and training of CMS contractors, there remain widespread reports of injured parties contacting insurers or their agents seeking remedy for affected Medicare treatment and services disrupted by NGHP Section 111 reporting. Along with the administrative burden on the industry, there is frustration over the inability to affect resolution.

The annual Responsible Reporting Entity (RRE) Profile Report confirmation and recertification process has proven to be an arduous task. Many legitimate RRE’s are in a discontinued status and have  become non-compliant. Clearly, improvements to communication and workflow are needed prior to January 2013 to prevent recurrence of the administrative log jam.

Lastly, there are issues which remain unaddressed, such as the reconvening of the Mass Tort group and creation of policy and guidance regarding NGHP Section 111 reporting.

In two quarters, we’ve witnessed increased organizational efficiencies with CMS contractors and much improved documentation.  There has been progress but many significant issues remain unresolved and will likely remain so for the foreseeable future.

(NGHP) User Guide Version 3.4

About the Author: John Miano is the Manager of Reporting Services for Gould & Lamb, LLC. His primary responsibility is directing the implementation of CMS Section 111 reporting programs for our clients. He has over 20 years experience in the Property and Casualty Insurance Industry and is currently an active committee member of the International Association of Industrial Accident Board Committees (IAIABC). He is also a former Executive Board Member of the Association of Workers Compensation Claim Professionals (WCCP) and is a Board Certified Workers Compensation claim adjuster (CWC).

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.

Federal Circuit Court Finds Part C Medicare Advantage Plans Have Same Rights as CMS When Seeking Recovery from Primary Payer

On June 28, 2012, the United States Court of Appeals for the Third Circuit published its decision on Humana Medical Plan and Humana Insurance Company v. GlaxoSmithKline, LLC, concluding that any private party may bring an action under §1395y(b)(3)(A), as it establishes a private cause of action for damages. As a result, the court found that private parties like Humana can bring suit for double damages when a primary plan fails to appropriately reimburse any secondary payer. In addition, since 42 C.F.R. §422.108 stated that a Medicare Advantage organization can exercise the same rights to recover from a primary plan, entity, or individual that the Secretary of HHS exercises under the MSP regulations, the Medicare Act treats MAOs the same way it treats the Medicare Trust Fund for purposes of recovery from any primary payer.

Humana, an authorized Part C Medicare Advantage (MA) plan allows Medicare enrollees to obtain their Medicare benefits through private insurers (MAOs) instead of receiving direct benefits from the government under Parts A and B. § 1395w-21(a). CMS pays an MAO a fixed amount for each enrollee, per capita (a “capitation”). The MAO then administers Medicare benefits for those enrollees and assumes the risk associated with insuring them. MAOs like Humana are thus responsible for paying covered medical expenses for their enrollees.

Glaxo manufactured and distributed Avandia, a Type 2 diabetes drug that has been linked to substantially increased risk of heart attack and stroke. Thousands of Avandia patients alleged various injuries resulting from their use of the drug and Glaxo began entering into agreements to settle these claims. By August 2011, when Appellants filed their brief, Glaxo had paid more than $460 million to settle these claims. As part of the settlement process, where a claimant was insured by Medicare, Glaxo had set aside reserves to reimburse the Medicare Trust Fund for payments it made to cover the costs of treatment for the claimants’ Avandia-related injuries.

Glaxo had not, however, included reimbursement of MA plans in the settlement agreements that it had reached with Avandia claimants enrolled in MA plans, even though MAOs had paid the costs of treatment of Avandia-related injuries for these claimants. Humana filed suit seeking reimbursement from Glaxo for the cost of treating its enrollees’ Avandia-related injuries. Humana sought, on behalf of itself and a class of similarly-situated MAOs: (1) damages under the Medicare Secondary Payer Act (“MSP Act”), which provides a private cause of action, 42 U.S.C. § 1395y(b)(3)(A), allowing double damages for failure to reimburse a secondary payer; and (2) equitable relief in the form of an order compelling Glaxo to identify settling Avandia claimants to the MAOs that cover them.

Glaxo filed a motion to dismiss. The District Court heard oral argument on the motion and, granted it. In dismissing the action, the District Court found there was no clear legislative intent to create a remedy for Humana. The District Court therefore found that no implied private right of action existed. Accordingly, the Court did not defer to the CMS regulation that granted MAOs parity with Medicare recovery from primary payers.

On appeal, the court found that the text of the provision sweeps broadly enough to include MAOs and that, even if it determined the statute to be ambiguous on this point, deference to CMS regulations would require it find that MAOs have the same right to recover as the Medicare Trust Fund does.

The Medicare Statute creates two separate causes of action allowing for recovery of double damages where a primary payer fails to cover the costs of medical treatment. When the Medicare Trust Fund makes a conditional payment and the primary payer does not reimburse it, the United States may bring suit pursuant to §1395y(b)(2)(B)(iii). Additionally, a private cause of action with no particular plaintiff specified exists pursuant to §1395y(b)(3)(A) anytime a primary payer fails to make required payments.

The court found that the plain text of the MSP private cause of action lends itself to Humana’s position that any private party may bring an action under that provision. It establishes “a private cause of action for damages” and places no additional limitations on which private parties may bring suit. § 1395y(b)(3)(A). Accordingly, the court held that the provision is broad and unambiguous, placing no limitations upon which private (i.e., non-governmental) actors can bring suit for double damages when a primary plan fails to appropriately reimburse any secondary payer.

The court indicated that, although the MSP Act was enacted before Part C, which created MAOs, private Medicare risk plans were authorized under 42 U.S.C. § 1395mm in 1972, before the passage of the MSP Act. Act of Oct. 30, 1972, sec. 226(a), Pub. L. 92-603, 86 Stat. 1396. Thus, at the time it enacted the MSP Act, Congress was aware that private Medicare providers existed. Had it intended to prevent them from suing under the private cause of action provision, Congress could have done so explicitly. In short, the court found that there is nothing in the text or legislative history of the MA secondary payer provision that demonstrates a congressional intent to deny MAOs access to the MSP private cause of action.

The court also recognized that Congress’s goal in creating the Medicare Advantage program was to harness the power of private sector competition to stimulate experimentation and innovation that would ultimately create a more efficient and less expensive Medicare system. See, e.g., H.R. Rep. No. 105-217, at 585 (1997) (Conf. Rep.) (stating that MA program was intended to “enable the Medicare program to utilize innovations that have helped the private market contain costs and expand health care delivery options”). It was the belief of Congress that the MA program would “continue to grow and eventually eclipse original fee-for-service Medicare as the predominant form of enrollment under the Medicare program.” Id. at 638. The MA program was thus, like the MSP statute, “designed to curb skyrocketing health costs and preserve the fiscal integrity of the Medicare system.” Fanning v. United States, 346 F.3d 386, 388 (3d Cir. 2003).

The court reasoned that it would be impossible for MAOs to stimulate innovation through competition if they began at a competitive disadvantage, and, as CMS has noted, MAOs compete best when they recover consistently from primary payers. Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs, 75 Fed. Reg. 19678, 19797 (Apr. 15, 2010). When they “faithfully pursue and recover from liable third parties,” MAOs will have lower medical expenses and will therefore be at a disadvantage, unable to exert the same pressure and thus forced to expend more resources collecting from such payers. The court therefore concluded that it was not the intent of Congress to hamstring MAOs in this manner.

The court pointed out that although the legislative history is nowhere explicit that MAOs may bring suit for double damages under the MSP private cause of action or using any other provision, it does make clear that MAOs were intended to enjoy a status parallel to that of traditional Medicare. Under original fee-for-service, the Federal government alone set legislative requirements regarding reimbursement, covered providers, covered benefits and services, and mechanisms for resolving coverage disputes. Therefore, the Conferees intend that the legislation provide a clear statement extending the same treatment to private MA plans providing Medicare benefits to Medicare beneficiaries. H.R. Rep. No. 105-217, at 638. This court saw nothing in the text or legislative history of the statute to imply that Congress did not intend to facilitate recovery for MAOs in the same fashion.

The Supreme Court in Chevron established a two-part test for determining when a federal court ought to defer to the interpretation of a statute embodied in a regulation formally enacted by the federal agency charged with implementing that statute. 467 U.S. at 842-43. First, the court must determine whether Congress’s intent on the issue is clear — if so, it must abide by that intention, regardless of any regulations. If the statute is unclear, that is, “silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.” Id. at 843.

CMS “has the congressional authority to promulgate rules and regulations interpreting and implementing Medicare-related statutes.” Torretti v. Main Line Hosps., Inc., 580 F.3d 168, 174 (3d Cir. 2009); see also 42 U.S.C. §1395hh(a)(1) (“The Secretary shall prescribe such regulations as may be necessary to carry out the administration of the insurance programs under this subchapter.”); 42 U.S.C. § 1395w-26(b)(1) (“The Secretary shall establish by regulation standards for MA organizations and plans consistent with, and to carry out, this part.”). Thus, the court concluded that it must accord Chevron deference to regulations promulgated by CMS.

CMS regulations state that an “MA organization will exercise the same rights to recover from a primary plan, entity, or individual that the Secretary exercises under the MSP regulations in subparts B through D of part 411 of this chapter.” 42 C.F.R. § 422.108. The plain language of this regulation suggests that the Medicare Act treats MAOs the same way it treats the Medicare Trust Fund for purposes of recovery from any primary payer. In this circumstance, the court concludes it is bound to defer to the duly-promulgated regulation of CMS.

A recent memorandum from CMS specifically responded to decisions of the federal courts holding that MAOs were not “able to take private action to collection for MSP services under Federal law because they have been limited to seeking remedy in State court.” Ctrs. for Medicare & Medicaid Svcs., Dep’t of Health and Human Svcs. Memorandum: Medicare Secondary Payment Subrogation Rights (Dec. 5, 2011). This memorandum clarified that CMS itself understood § 422.108 to assign MAOs “the right (and responsibility) to collect” from primary payers using the same procedures available to traditional Medicare.

The court therefore reversed the District Court’s dismissal of the complaint, and remanded it for further proceedings consistent with its opinion.

The decision is the latest in what seems to be an ongoing debate within the industry and amongst litigants regarding the rights of Part C plans when compared to those of traditional Medicare. The case distinguishes recent District Court decisions such as Parra v. PaciCare of Arizona, Inc., Civ. No. 10-008, 2011 WL 1119736 (D. Ariz. Mar. 28, 2011) which sought to define the priority rights of MAOs despite CMS regulation. In the Third Circuit there is now no question that MAOs enjoy the right of reimbursement and the ability to pursue that right through the private cause of action.

Some larger questions are presented by the ruling. With traditional Medicare, information regarding a potential recovery is reported through the Mandatory Insurer reporting mechanism. The Medicare, Medicaid and SCHIP Extension Act of 2007 have mandated electronic reporting be completed by RREs or those responsible for payment. The acceptance of ongoing responsibility for medical benefits and the settlement itself are required to be provided. From that information, Medicare begins its recovery efforts against those who failed to protect its interests. However, without an mandate requiring reporting information to extend to Part C plans, it would appear that MAOs must rely on the beneficiary or their representative to advise that a settlement has occurred.  Will CMS now expand the recipients of Mandatory Insurer Reporting to include Part C plans?

Assuming that MAOs now have the same rights as traditional Medicare and that their recovery rights ripen on the fact of settlement, judgment or award, is it permissible to satisfy the lien before settlement? If so, can this be done by the primary payer or by the beneficiary pursuant to the policy of insurance? Clearly, logistical questions abound. For the time being, the law applies only in the Third Circuit. But, if adopted by the other Circuits it appears that CMS will have yet another technical challenge on its hands. Clearly, mindful MAO organizations will now step up their recovery efforts based upon the case.

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.

Additional Steps are Needed to Improve Program Effectiveness for Non-Group Health Plans

The Government Accountability Office (GAO) Report on Medicare Secondary Payer (MSP) report examines (1) how the initial implementation of mandatory reporting for non-group health plans (NGHPs) has affected the workload of and payments to MSP contractors, and Medicare savings, and (2) key challenges within the process for MSP situations involving NGHPs and the steps the Centers for Medicare & Medicaid Services (CMS) is taking to address those challenges. GAO reviewed relevant MSP-related documents and data on MSP costs, workload, Medicare savings, and contractor performance. GAO also interviewed CMS officials, MSP contractor officials, and NGHP stakeholders.

During the initial implementation of mandatory reporting for NGHP, the workloads of CMS, payments to MSP contractors and Medicare savings, all increased. From 2008 through 2011, the NGHP workloads of all three contractors used by CMS to implement the process for MSP situations—the Coordination of Benefits Contractor (COBC), the Medicare Secondary Payer Recovery Contractor (MSPRC), and the Workers’ Compensation Review Contractor (WCRC)—increased to varying degrees.

Within the process for MSP situations involving NGHPs, GAO identified key challenges related to contractor performance, demand amounts, aspects of mandatory reporting, and CMS guidance and communication. CMS has addressed or is taking steps to address some, but not all, of these challenges.

• Contractor performance. Challenges related to the timeliness of the MSPRC and WCRC were identified, including significant increases in the time required to complete important tasks. CMS reported taking steps to address the challenges with each of these contractors’ performance.

• Demand and recovery issues. Challenges were identified related to the timing of demand amounts, the cost-effectiveness of recovery efforts, and the amounts of Medicare demands from liability settlements. CMS reported taking steps to address some, but not all, of these challenges.

• Mandatory reporting. Key challenges were identified with certain aspects of mandatory reporting: determining whether individuals are Medicare beneficiaries, supplying diagnostic codes related to individuals’ injuries, and reporting all liability settlement amounts. CMS reported taking steps to address some, but not all, of these challenges.

• CMS guidance and communication. Key challenges were identified related to CMS guidance and communication about the MSP process, guidance on Medicare set-aside arrangements, and beneficiary rights and responsibilities. CMS has taken few steps to address these challenges.

While CMS has taken, or reported that it is in the process of taking additional steps to address these key challenges, there are several areas related to the MSP program and process that still need improvement. To improve the MSP program, GAO is making recommendations to improve the cost-effectiveness of recovery, decrease the reporting burden for NGHPs, and improve communications with NGHP stakeholders. The Report indicates that CMS has agreed with these recommendations. The challenge going forward is for CMS to and its contractors to create or implement a more efficient, accountable and predictable system. The GAO report identified the shortcomings of CMS and the limitations of the NGHP system as administered by CMS. Meaningful reform or changes in policy appear to have been left to CMS to solve.

Download the MSP Compliance Protocols user guide today!

About the Author: Rafael Gonzalez is Director of Medicare Compliance & Post-Settlement Administration. He brings over 20 years of experience in the Workers’ Compensation and Liability insurance industries with a specific focus on Medicare Compliance. Rafael has been responsible for all areas of Medicare Set Aside Allocations (MSAs) including the preparation of MSAs and their approval by the Center for Medicare & Medicaid Services.  At Gould & Lamb, Rafael’s duties include assisting clients with Medicare Compliance issues, specifically on Post-Settlement Administration and client education.

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.