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.

General Information

The 67th Annual Workers’ Compensation Educational Conference and the 24th Annual Safety and Health Conference are just around the corner. Set for August 19 through 23, 2012 at the Orlando World Marriott, the conference will again focus on the national workers’ compensation and safety industries, serving as a gathering of national stakeholders to study and be educated on issues of common concern.  For the first time, the Conference program has expanded to a fourth day (Thursday, August 23) with a full 2-day breakout for mediators.

Program

As usual, this year’s program offers creative and innovative speakers from around the country. The hottest issues in workers’ compensation and safety will be discussed. All aspects of workers’ compensation and workplace safety will comprise the topics of discussion with breakouts for risk managers, regulators, safety professionals, health care providers, adjusters, insurance professionals, attorneys, medical case managers, professional employer organizations (employee leasing), temporary staffing, mediators, and medical office administrators.

Medicare Secondary Payer Act Compliance

Sponsored by Gould & Lamb, LLC, this year’s conference will again be the only national conference to feature a full-day breakout on the Medicare Secondary Payer Act and related subjects. One of the most difficult areas in handling workers’ compensation and general liability matters is understanding and dealing with the serious pitfalls that this expanding responsibility creates. The comprehensive breakout will clarify what has become an extremely complicated process that has created enormous issues for the workers’ compensation industry, soon to further expand into the general liability area.

Providing Clarity in a Land of Confusion

Program Moderator, Bret Cade, Executive VP of Sales at Gould & Lamb, LLC will lead the day long seminar. Planned presentations include Medicare Secondary Payer Act 101: The Reader’s Digest Version by Roy Franco, Esq., Principal at Franco Signor, LLC, The Eye in the Sky: Mandatory Insurer Reporting by Scott Huber, Vice President of Information Technology at Gould & Lamb, LLC and Jeff Gurtcheff, VP and General Manager at PMSI, Render Unto Caesar What is Caesar’s: Conditional Payments  Resolution by Wanda Reas, Esq., Partner at Znosko & Reas, P.A. and John Cattie with the Garretson Resolution Group, So Let It Be Written, So Let It Be Done: A Legislative and Case Law Update by Mark Popolizio, Esq., Senior Legal Counsel at Crowe Paradies and Roy Franco, Esq., Principal at Franco Signor, LLC, Seeing the Forest Through the Trees: MSA/LMSA Trends by Rafael Gonzalez, Director of Medicare Compliance & Post Settlement Administration at Gould & Lamb, LLC, Celia Mendez, Esq., Mediator & Attorney at Moreland & Mendez, P.A., and Cynthia Sage, Esq., Corporate Counsel at FCCI Insurance Group. The program will end with MSP Compliance in the Real World: A Roundtable Discussion where all of the previously mentioned speakers will be joined by Skip Brechtel, Chief Technical Officer at CCMSI, Wade McGuffey, Esq., of Goodman, McGuffey, Lindsey & Johnson, LLP, and the Honorable David Langham, Deputy Chief Judge of Workers’ Compensation Claims.

The program will:

• Provide much needed technical information on Mandatory Insurer Reporting, addressing its purpose and expounding on reporting triggers, errors and challenges, as well as the consequences enumerated by Section 111 of the Medicare/Medicaid SCHIP Extension Act of 2007.

• Present a comprehensive overview of the policies and procedures relative to the Medicare Secondary Payer Recovery Contractor (MSPRC), challenges in dealing with the MSPRC and consequences of not handling Conditional Payments appropriately.

• Give attendees with a thorough review of new legislative initiatives and cases decided from around the country on both workers’ compensation and liability claims related to Medicare Set Asides and Conditional Payments.

• Delve into current industry trends in workers’ compensation and liability Medicare Set- Asides, specifically regarding MSA submissions, MSA approvals, MSA pharmacy issues and MSA administration.

• Offer those in attendance the opportunity to listen in on a roundtable discussion bringing legal and claims’ experts together to discuss their trials, tribulations, methods and best practices in complying with CMS’ policies to take Medicare’s interest into consideration when settling past and future medical care.

The June 28, 2012 decision by the United States Supreme Court on the Affordable Care Act may go down as one of those “Where were you when the ruling was announced?” type of moments. As both a self-proclaimed C-SPAN and political junkie, I followed the debate from the beginning, when President Obama signed into law the Patient Protection and Affordability Care Act of 2010 (PPACA) and the Healthcare and Education Reconciliation Act of 2010 (HCERA), including reading the transcripts of the oral arguments made to the U.S. Supreme Court a few months back.

The reason for my interest was a key provision pertaining to prescription drug plans which, if enacted, will have an affect on Medicare Part-D and, therefore, on Workers’ Compensation Medicare Set-Asides (WCMSA). PPACA § 2502 pertains to the elimination of the exclusion of coverage of certain drugs that traditionally have not been compensable under Medicare Part-D.

Now that the healthcare law has been upheld, beginning in 2013 Medicare Part-D will begin to cover Benzodiazepines and barbiturates used for certain conditions such as epilepsy, cancer, or a chronic mental disorder. Currently, these medications are excluded from Medicare Part-D prescription drug plans.

Benzodiazepines are those medications such as Diazepam (Valium), Clonazepam (Klonopin), Alprazolam (Xanax), and barbiturates and include the commonly used medication Phenobarbital. Although we do not see use of Phenobarbital often in the WC arena, Benzodiazepines are utilized for many conditions in WC, such as anxiety, sleep, and muscle relaxation.

Normally, these medications would not generate any concern as they are typically dispensed as generic and are relatively inexpensive. However, the expansion of Medicare to cover them will have a direct impact on WCMSAs in two ways.

First, individuals may request the brand name Benzodiazepines in lieu of a generic at the time of fill. Average Wholesale Price (AWP) of brand name Valium costs about $3 per tablet and averages 15 times higher than the price of the generic equivalent Diazepam.

Second, although Benzodiazepines are abused less than opioids, there is now the potential for an increase in prescriptions for these medications. Benzodiazepines abuse is commonly seen when there is an established pattern of opioid abuse or with an illicit substance. Therefore, the potential for increased rates of abuse may rise. The WC community is already struggling with overuse of opioid medications and, conceivably, the new coverage could compound the problems the workers’ compensation community is seeing with the abuse of opioids.

These changes are certainly something to keep any eye on. They provide a strong argument for both early intervention strategies and prescription management and requires further close scrutiny on how it may affect the bottom line.

Further information on these and other changes can be found at:

http://www.medicareadvocacy.org/InfoByTopic/Reform/10_04.08.MAandPDChanges.htm

About the Author: William F. Bell, Jr. is the Senior Clinical Pharmacy Specialist for Gould & Lamb, LLC. His primary responsibility is the review of a claimant’s pharmacotherapy regimen and the identification of off-label medications in a Medicare Set Aside Allocation. He has given numerous presentations on the subject of medication management and how it relates to Workers’ Compensation and Medicare Set Aside Claims. Bill has also authored two continuing education articles for the Pharmacist’s Letter, a nationally known education resource for practicing pharmacists.

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.

The Code of Federal Regulation (42 CFR Sections 411.46 and 411.47) provides that payment for injury related medical expenses and prescription drug expenses should not be shifted to Medicare from the primary or “responsible” party.  In order to accomplish this goal, a portion of a claimant’s settlement or award can be set aside to pay for future accident related medical services and prescription drug expenses that would otherwise be reimbursable by Medicare.  The bottom line is: Medicare will not pay for any medical expenses or prescription drug expenses for the accident related illness or disease after a settlement or award is received, until the amount allocated (or “set-aside”) for future medical expenses and future prescription drug expenses, that would otherwise be reimbursable by Medicare, are “properly” exhausted.

Medicare Set-Aside Administration Requirements

The key word, of course, is properly. The question becomes: “Is this is being done?”  The complexities surrounding this task can be astonishing.  The following are the basic requirements for ensuring that settlement funds are properly exhausted:

1. Medicare Set-Aside Account – The MSA funds shall be placed in an interest bearing account, which is separate from any personal checking or savings account.  A copy of the documents establishing the MSA account should be sent to CMS at Coordination of Benefits Contractor within 30 days of disbursal of the settlement.

2. Distribution of funds from the Medicare Set-Aside Account – The funds in the MSA account shall be used solely for expenses related to medically necessary services or supplies or prescription drug expenses incurred for those medical needs related to or resulting from the related injury, which would otherwise be reimbursable or paid for by Medicare.  Funds in the MSA account shall not be used to pay for medical services or prescription drug expenses not covered by Medicare.

3. Set-Aside Account Interest – All interest earned on the Medicare Set-Aside account will be allowed to accrue in the account and will be used solely for medical expenses and prescription drug expenses that would otherwise be covered by Medicare and for taxes, banking fees, mailing fees, or document-copying charges related to the account.

4. Reimbursement to Medicare – In the event CMS determines that Medicare has erroneously paid benefits, CMS (or its designated Contractor) shall have the right to seek and receive reimbursement of any such conditional payments or overpayments.

5. Accounting Records – The administrator, whether the claimant or a professional custodian, shall maintain accurate records of the distributions and expenditures from the MSA account.  The records should indicate:

• the date of service;
• the name of the medical provider, supplier or pharmacy;
• the medical diagnosis, procedure, service, or item received;
• the amount paid for the medical expense or prescription drug expense;
• and the date of the payment.

The administrator shall also retain a receipt or other evidence of each and every payment made from the MSA account.

6. Annual & Final Accounting and Delivery of Notices – The administrator shall submit all required annual accounting of the MSA and notices to MSPRC.  The annual accounting shall be submitted no later than 30 days after the close of the annual accounting period (which is the anniversary of the funding of the MSA from the award or settlement).  The administrator shall submit a final accounting within 60 days of the funds being depleted.  The annual and final accounting will include the information set forth in paragraph 5 above.

7. Distributions Following Death of Beneficiary – In the event that the Medicare beneficiary dies before the funds in the MSA are depleted, the account will continue to exist for payments of any outstanding bills for accident related medical expenses and prescription drug expenses. Any remaining monies shall be paid to the beneficiary’s estate or subject to state law.

8. Inappropriate Set-aside Account Expenditures – If, after the MSA account is depleted, the final accounting reveals that funds in the account were used to pay for items other than Medicare allowable expenses related to necessary services, supplies, or prescription drug expenses resulting from the accident related injury, Medicare will not pay for any future injury related medical expenses or prescription drug expenses until the funds have been restored to the account and properly exhausted.

Post-settlement administration programs are designed to accomplish two main goals: provide claimants with support from either an advisement role or an administrative role, and to protect Medicare’s interests. Management of post-settlement funds is crucial to both sides of the equation and, if not properly monitored and allocated, can lead to severe consequences. With the proper attention, both parties’ interests can be protected and further action can be avoided.

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 in the country, serving domestic and international insurance companies, third-party administrators and self-insured entities.