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.

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 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.

Two strategies are routinely sought after in healthcare: positive clinical outcomes for the patient and controlling the costs.  The proper use of generic medications is one way to manage costs. Another way costs can be controlled, while simultaneously achieving positive clinical outcomes, is through the use of Over-the-Counter (OTC) medications.

Controlling Costs with OTC Medications

Because OTC medications do not require visiting a physician or a physician’s prescription, the cost of going to a doctor’s office is eliminated and there is greater and easier access to the medications. Over the last two decades, the notion of “self-care”, a program where the patient can treat conditions they normally would not due to perceived barriers, such as socio-economic factors or the inability to see a physician, has increased. The greater access to OTC medications to treat conditions prevents unnecessary ER or hospital visits, thereby allowing physicians to focus their time and energy on more serious conditions.

A recent study released by the Consumers Healthcare Products Association (CHPA) concluded that for every $1 spent on an OTC medication, a $7 in savings to the overall healthcare system is realized.

Potential Savings Recognized in Workers’ Compensation Cases

In the Workers’ Compensation insurance sector, use of OTC medications is an under utilized standard of care and makes good sense. Factors such as the lack of formulary management allow for the prescription version of OTC medications to continue to be prescribed with the payer ultimately absorbing the costs. As an example, the chart below illustrates the AWP for two common GI medications and the potential savings as measured against the OTC version. We see these medications commonly prescribed in the Workers’ Compensation industry secondary to NSAID usage (Meloxicam, Ibuprofen) or with opioids (Hydrocodone/APAP) to alleviate upset stomach or other GI effects.

*AWP based on 30 day supply. BC/BS Michigan Pharmacy Sheet.

Although this may not seem significant or substantial, use of an OTC medication to take the place of a prescription can yield substantial savings to a Workers’ Compensation Medicare Set-Aside and could make the difference between settling the file or having to keep it open.  Keep in mind, both Omeprazole and Lansoprazole are not indicated to be utilized for chronic periods. Thus, it makes sense to utilize OTC versions of these products once or twice yearly as opposed to funding a Workers’ Compensation Medicare Set-Aside monthly for the prescription versions.

In today’s Workers’ Compensation claims handling setting, each and every dollar must be managed appropriately. OTC medication utilization is one way that Part-D allocations can be significantly reduced and properly funded in a Workers’ Compensation Medicare Set-Aside, providing both positive outcomes while being cost effective as well.

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.

According to the 2011 Annual Report of the Boards of Trustees released in May, 47.5 million people were covered by Medicare in 2010, 17% were disabled, and only 25% had chosen to enroll in Part C private health care plans.  Trust fund income was $486 billion and total expenditures were $523 billion.  While there was some improvement from prior years, there is still work to be done.

The Medicare Secondary Payer (MSP) Statute was passed in 1980 to provide protection to the Medicare Trust Fund by giving the Center for Medicare and Medicaid Services (CMS) authority to recover payments made by Medicare where a primary payer exists and to avoid payment for future care related to an injury or accident.  This protection offered to the Medicare Trust Fund is a crucial part of ensuring the future solvency of the Medicare program.

Education of MSA Administration is Important

As the MSA industry continues to grow and transform, the education of everyone involved throughout the process – from the MSA creation and submission to the funding and administration of the MSA funds – becomes more important.  Post settlement administration of MSA allocations is a very complicated part of the entire process and can be confusing, especially for claimants.

According to the recent contract award (Workers’ Compensation Review Contractor), an estimated 24,000-30,000 reviews of MSAs will be completed in the coming year.  Yet, only a small fraction of those reviews are submitted as Professionally Administered, while the remaining are submitted as ‘allegedly’ Self Administered.  Historically, there has been a high level of suspicion as to the level of compliance of those self administering which is often attributed to laziness or lack of understanding due to the complexity of administration.

Post Settlement Process Considerations

As with any business, there are costs associated with the process.  However, there are cost-efficient and smart alternatives that exist and should be considered as part of the settlement process.  The key is to find a long term solution that meets the individual needs of the claimant over his or her lifetime (while ensuring MSP compliance and solvency of the Trust Fund).  The alternatives range from Self Administration Support Services which includes physician contact, bill review, and annual reporting to full Professional Administration.  Long gone are the days of little choice in this regard and contingencies of the case must dictate the level of support.

There are several complexities and intricacies surrounding post settlement administration of funds including:

• Knowledge of state fee schedules and/or usual and customary rates
• Knowledge of Medicare coverage guidelines (medical care and prescription drugs)
• Understanding when to pay from the MSA funds and when to notify Medicare to pay; depending on the funding arrangement of the MSA
• Handling of the account if it is depleted (temporary or permanent)
• Notifying CMS throughout the life of the claimant
• Handling of interest income and taxes

It is important to consider the details of each case and its post settlement activity on a case by case basis.  While some cases require less attention, it cannot be assumed that this will be the norm.  Beneficiaries have the option to enroll in private health insurance plans that contract with Medicare to provide Part A and B medical services which affect the beneficiary’s access to care post settlement.  The type of service (e.g., inpatient hospital care and physician visits) and other applicable statutory provisions must always be considered when managing funds.

Cost vs. Benefit

When managing claim files, it is reasonable for a claims professional to expect affordable and cost-effective alternatives for post settlement MSA administration products.  Finding innovative new methods of delivering alternatives and achieving better cost efficiencies is imperative, but it is also essential to provide claimant’s with a viable solution that ensures MSP compliance in the long term without compromising quality.

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).