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.

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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.

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 or 866-672-3453 ext. 1122.

Additional details on the bill can be found here.

MSAs for Liability Cases? – CMS Publishes Timeline for Rulemaking

The Centers for Medicare and Medicaid Services recently published RIN: 0938-AR43 in follow-up to its Advanced Notice of Proposed Rulemaking, originally released on June 15, 2012 (read here). The original ANPRM solicited public comment on a proposed rule regarding  standardized options that CMS was considering making available to beneficiaries and their representatives to clarify how beneficiaries could “meet their obligations to protect Medicare’s interest with respect to Medicare Secondary Payer (MSP) claims involving automobile and liability insurance (including self-insurance), no-fault insurance, and workers’ compensation when future medical care is claimed or the settlement, judgment, award, or other payment releases (or has the effect of releasing) claims for future medical care.” The document provided seven options for satisfying Medicare’s interest when settling future medical benefits as a result of an injury or accident.

According to the Federal Register, 107 comments were received. Considering the importance and far-reaching ramifications of a potential rule to codify and require the parties to consider Medicare in all insurance cases, the number of comments was startlingly low. In fact, the lack of CMS activity with regard to the rule making may signal that the issue was not pressing enough for immediate action. In fact, no response to the comments were addressed or made by CMS until the publication of the RIN. In several public appearances since June of last year, CMS officials refused to discuss the issue, advising that they were “under rulemaking.” While their position is technically incorrect as the rule was simply a proposed notice, CMS nonetheless gave many the impression that activity around the issue was not a priority.

With the release of the RIN, CMS seems to signal that they are prepared to publish a Notice of Proposed Rulemaking which would include liability insurance cases. The deadline for action, however, is listed as “9/00/2013.” Accordingly, we may be able to expect something substantive in the very near future. Presumably, CMS has digested the comments provided by those that bothered to respond. By and large, those comments either questioned the statutory authority of CMS to implement such a rule, or lamented the broken, sometimes incomprehensible workers’ compensation MSA review and approval process.

While the RIN suggests a timeline for action by CMS, it must be remembered that the suggested timeline will not be enforced by any entity other than CMS itself or the Department of Health and Human Services. Considering the slow response that CMS and HHS have exhibited in formulating and releasing Congressionally-mandated regulations to implement the newly enacted Strengthening Medicare and Repaying Taxpayers (SMART) Act, it would not be unusual to see the September deadline come and go without a proposed rule.

Certainly, CMS action on these issues and implementation of a rule requiring injured plaintiffs/claimants to formally consider Medicare’s future interests in any injury or accident case, could fundamentally alter the way claims will be evaluated, litigated and resolved particularly with respect to liability insurance claims. Gould & Lamb will continue to monitor the situation and will provide updates or comment as the situation is further defined. If you would like to discuss these issues, contact your G&L representative or call our corporate office and an executive team member will be glad to assist you.

Why You Need to Align Yourself with the Right Reporting Agent

Quite possibly the single largest incentive to comply with the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) was the verbiage, “An entity… shall be subject to a civil money penalty of $1,000 for each day of noncompliance for each individual…”  The fear of an absolute penalty at the rate of $1,000 per claim per day is very persuasive.  The Strengthening Medicare and Repaying Taxpayers (SMART) Act, signed into law in early January 2013, softened the language in the statute such that an entity may be subject to a penalty of up to $1,000 per claim per day.  With the passing of the SMART Act, CMS was to provide further clarification as to what constitutes a lack of compliance with the MMSEA, including any safe harbors.  That verbiage has not yet been provided, so now is the critical time to ensure that you are properly aligned with a Reporting Agent that is fully committed to making you succeed in complying with the MMSEA.

Your claims should be properly vetted to determine which ones qualify for reporting and data deficiencies should be identified in advance of reporting to ensure acceptance by CMS.  While the Non-Group Health Plan (NGHP) User Guide (now in version 3.6) defines each field and the applicable error codes, there are many idiosyncrasies that go undocumented.  It is only when partnering with a Reporting Agent whom continuously reviews their own as well as CMS’ data validations that you can rest assured compliance with the MMSEA is fulfilled.  Your Reporting Agent must also provide you with a team of dedicated subject matter experts.  These SMEs are your lifeline with CMS EDI Representatives and management.  Without the proper people on your side, compliance with the MMSEA is extremely difficult.

If you are not fully comfortable with your current MMSEA Compliance Program, then I urge you to contact us today.

NGHP Section 111 Reporting Mid Year Review

John MianoWe’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 Mandatory Insurer Reporting User Guide(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.