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.

Hadden Files Certiorari in US Supreme Court

On November 21, 2011, the US 6th Circuit Court of Appeals rendered its much anticipated ruling on Hadden v. United States, finding that despite receiving only a percentage of his damages, the Medicare Secondary Payer Act required Hadden to reimburse Medicare to the full extent that the government had requested and therefore affirmed the judgment of the District Court, which had previously ruled that Hadden owed $62,338.07 in conditional payments out of the $125,000 settlement he had received from the tortfeasor.

On March 30, 2012, Hadden filed his Petition for Writ of Certiorari with the United States Supreme Court. Hadden challenges the government’s argument that Medicare is entitled to 100% of its outlay, regardless of whether the beneficiary receives a reduced recovery by settling his tort claim for only a portion of his undifferentiated damages, is legally incorrect. Therefore the question presented for the Court whether the government is entitled to full reimbursement under the Act when a beneficiary compromises a tort or other claim and recovers a reduced amount, as the 6th Circuit Court of Appeals held, or whether the government, like its beneficiary, is entitled to only a proportionate recovery, as the 11th Circuit Court has held.

Hadden argues that the Court should grant the petition and hear the case as there are now conflicting Medicare Secondary Payer Act (MSPA) Circuit opinions, Bradley v. Sebelius, out of the 11th Circuit, and Hadden v. United States, out of the 6th Circuit.

Bradley v. Sebelius

On September 29, 2010, the 11th Circuit Court published its opinion on Bradley v. Sebelius, concluding that the district court erred in upholding the decision of the Secretary because it was unsupported by substantial evidence in the record taken as a whole. It therefore reversed, finding Medicare entitled to the sum of $787.50, as determined by the allocations of the state probate court.

In Bradley, the Secretary refused to accept the probate court’s determination that Medicare should only recover $787.50. Therefore, the estate paid Medicare under protest, perfected its administrative appeal, and exhausted its administrative remedies. The case proceeded as an appeal to the district court from a final decision of the Secretary, wherein the surviving children filed their brief in opposition to the Secretary’s decision, the Secretary filed her brief in support of her final decision, and the case became ripe for district court review.

The district court, adopting the report and recommendation of the magistrate judge, held that the Secretary’s interpretation of the MSP, 42 U.S.C. § 1395y(b)(2)(B)(ii)(2006), and its attending regulations, 42 C.F.R. §§ 411.37(c)(1), (c)(2), (c)(3)(2004), was reasonable. Accordingly, the district court held that Medicare was entitled to reimbursement in the amount of $22,480.89, not $787.50, for conditional medical expense payments paid on behalf of the Decedent. Burke then appealed to the 11th Circuit.

The 11th Circuit Court concluded however that the Secretary’s position was unsupported by the statutory language of the MSP and its attending regulations. The Secretary’s ipse dixit contained in the field manual does not control the law. The district court also erred in relying upon the advisory language contained in a field manual as the rationale for its opinion upholding the actions of the Secretary.

Hadden v. United States

In comparison, on November 21, 2011, the US 6th Circuit Court of Appeals rendered its ruling on Hadden v. United States, finding that the Medicare statute required Hadden to reimburse Medicare to the full extent and therefore affirmed the judgment of the District Court, which had previously ruled that Hadden owed $62,338.07 in conditional payments out of the $125,000 settlement he had received from the tortfeasor.

In Hadden, an administrative law judge found that the plain language of the Medicare statute required Hadden to reimburse Medicare the full amount that Medicare had demanded. The ALJ also found that the reimbursement was not against “equity and good conscience.” The Medicare Appeals Council agreed with each of those findings. Hadden appealed that decision to the district court, which remanded the case back to the Appeals Council. The Appeals Council issued an amended decision in which it again agreed with the ALJ’s findings. The district court agreed with them as well, resulting in Hadden’s appeal to the 6th Circuit Court.

In its opinion, the 6th Circuit Court made it clear that it is undisputed that defendant is a “primary plan” and that Hadden is an “entity that received payment from a primary plan” within the meaning of 42 U.S.C. § 1395y. It is also undisputed that Medicare paid for $82,036.17 of medical services rendered to Hadden. Thus, Hadden “shall reimburse” Medicare to the same extent that defendant “had a responsibility to make payment” with respect to those services.

The court pointed out that in 2003, Congress amended § 1395y(b)(2)(B)(ii), making it clear that a primary plan’s responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon the recipient’s compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan’s insured, or by other means. As a result, a beneficiary cannot claim that a third party is responsible for all of his medical expenses on the one hand, and later argue to Medicare that the same party was responsible for only 10% of them, on the other. In his claim against defendant, Hadden did not demand that it pay for only 10% of the medical expenses that he incurred as a result of his accident; he demanded that it pay for all of them. That choice, the court said, has consequences—one of which is that Hadden must reimburse Medicare for those same expenses.

Hadden’s Arguments

In his Petition for Writ of Certiorari, Hadden argues the 6th Circuit Court of Appeals decision is erroneous on several counts, as it essentially rewrites the MSPA leading to absurd results. Hadden further argues that the majority’s holding contravenes the legislative history and the government’s interpretation of the MSPA. Hadden also argues the Court of Appeals made reversible error by attempting to avoid Ahlborn, the US Supreme Court’s landmark decision limiting a state’s right to reimbursement when claiming a Medicaid lien, by manufacturing a distinction between responsibility and liability. In addition, Hadden further argues that the Court of Appeals’ holding ignores the well-established policy of favoring settlement of disputes, as compared to prolonged and protracted litigation. Last, Hadden argues the MSP Manual is not entitled to deference, as it is not statutory law or regulatory provisions.

In addition to these arguments, Hadden points out that the question presented is one of exceptional importance and therefore one that the Court must hear. Because of the split in the 6th and 11th Circuits, Medicare, a uniform federal program, is now being implemented disparately. As a result, Hadden argues the Court must intervene to provide consistency for all Circuits to appropriately administer such reimbursement claims. In addition, Hadden argues that given the number of baby boomers coming into the Medicare program over the next several years, this question will recur frequently. Consequently, this case will provide the Court with an opportunity to clarify the erroneous public policy Court of Appeals’ decision.

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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.