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.

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.

Frequently, my colleagues and I are asked to define what the Centers for Medicare and Medicaid Services (CMS) consider ‘late reporting’ under the Medicare Medicaid State Children’s Health Insurance Program Extension Act (MMSEA) Section 111. Neither CMS or the Coordination of Benefits Contractor (COBC) has specified when, how or by whom the late filing penalties specified by Section 111 will be applied.

However, in reviewing the question, it becomes evident that the following terms, often used interchangeably, become confused: compliance, timeliness and late reporting.

The February 24, 2010 CMS Alert defines compliance as “punctual submission of quarterly claim input files which after the initial reporting cycle, are of sufficient quality which consistently follows CMS data submission protocols producing data that can be adequately processed and used.” In other words, the RRE must submit Claim Input files on their assigned quarterly submission date in a format acceptable to the Secretary for more than one consecutive quarter.

Timeliness of reporting is specified in the Non-Group Health Plan (NGHP) User Guide version 3.3 in Section 11.10.2.  Total Payment Obligation to the Claimant (TPOC) settlements, judgments, awards or other payments are reportable when the injured party to (or on whose behalf) payment will be made has been identified and the TPOC amount for that individual has been identified. Should these criteria not be met as of the TPOC date, documentation should be retained evidencing when they had been met and the corresponding date reported in the ‘Funding Delayed Beyond the TPOC Start Date’ field which is contained within a record submitted in a Claim Input file during the RRE’s assigned quarterly submission period.

If an RRE has accepted ongoing responsibility for medicals (ORM) on a claim two events must be reported. The first is the assumption of ORM and the second is the corresponding end date reflected in the ORM Termination Date.

Section 12.4 of the NGHP User Guide advises that a claim record submitted to, and accepted by CMS as an ‘Add’ record may be indicated as “late” in the Claim Response via a ‘Compliance Flag’ code. Unlike error codes which indicate rejection, Compliance Flags mean that the record had been processed but non-compliant with Section 111 reporting requirements.

A Compliance Flag 01 indicates that the most recent TPOC Date on an ‘Add’ record received in a quarterly claim file submission is late if the TPOC Date is more than 135 days older than the start date of that same file submission period.

A Compliance Flag 03 indicates that the accepted ‘Add’ record received in a quarterly claim file submission is late if the ORM Termination Date is more than 135 days older than the start date of that same file submission period.

It’s important to note that Compliance Flag codes are only applied to records with an ‘Add’ Action Type which receive a 01 (accepted with ORM) or 02 (accepted no ORM) Disposition code in the Claim Response and do not apply to accepted ‘Update’ or ‘Delete’ Action Type records.

Therefore, “compliance” refers to the RRE’s overall conformity to Section 111 filing requirements, “timeliness” refers specified timeframes regarding reporting of ‘Add’ records and Compliance Flags act as notifications to the RRE of non-compliant (late) records  which are tracked by COBC.

The May 1, 2012 CMS Alert ‘Restrictions on Additional File Submissions Lifted’, now removes the ‘Multiple files submitted’ Threshold Error. Previously, this Threshold error suspended the processing of additional Claim Inputs, if more than one were submitted during the RRE’s assigned submission period. Although intended to expedite electronic reporting of ORM Termination Dates, lifting of this threshold is not restricted solely to this purpose.

Allowance of multiple claim file submissions without restriction as to transaction type will inevitably lead to further confusion and may likely result in reassessment by CMS regarding specification and application of late reporting penalties.

Gould and Lamb is the global leader in MSP compliance offering first in class mandatory insurer reporting services. For questions or more information, please contact: Reporting Services Department at: 866.672.3453 x1122  or mirservice.support@gouldandlamb.com.

(NGHP) User Guide Version 3.3

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.

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.