Oregon Court Finds Professional Liability Fund Not A Responsible Reporting Entity

Russell S whittle, Esq VP MSP ComplianceThe 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.

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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.

Medicare Reporting

Medicare Reporting; Revised Timeline for Liability Insurance

Medicare Reporting Revised TimeLineIn Nov 2010, CMS revised the Medicare reporting timeline for Liability claims where there had been a Total Payment Obligation to the Claimant (TPOC) with no involvement of ORM.

Early November of 2010, Centers for Medicare and Medicare Services (CMS) issued a Mandatory Insurer Reporting Alert Update advising as to a revised time line for the Medicare reporting of Liability claims where there had been a TPOC – settlement, judgment, award or other payment with no involvement of on-going responsibility for medical (ORM).

This Alert advised that TPOC’s with dates on or after 10/1/2011 would now require first submission to CMS per the Responsible Reporting Entities (RRE’s) assigned quarterly time period for the first calendar quarter of 2012 but also welcomed and encouraged TPOC reporting  with dates prior to 10/1/2011.

5 Benefits Why RREs Should Voluntarily Report Liability Claims Now

  1. Claims administrators handling multiple lines of business inclusive of No Fault and Workers’ Compensation won’t need to exclude Liability claims from data feeds required for Quarter 1 Medicare reporting.
  2. Claims administrators handling these Liability claims will not require re-training prior to required Medicare reporting Quarter 1 2012.
  3. Liability claim handlers may gain necessary experience in the comprehensive collection of required Mandatory Insurer Reporting data.
  4. Plaintiffs, Plaintiff Counsel and State venues may become acclimated to data requirements and affected time periods for settlement regarding claims involving Medicare Eligible Injured Parties.
  5. Medicare voluntary reporting will not carry penalty exposure for late or delayed reporting.

The greatest benefit of early Medicare reporting is invaluable in terms of observed, anticipated behavior of CMS edits. This experience will to improve data quality when Medicare reporting becomes required and minimize late reporting penalties.

Medicare Compliance

What Do Medicare Compliance and Love Have In Common?

Tom Blackwell, VP Sales & MarketingLove is fickle. Love hits you when you aren’t looking. Love is kind of scary. Love is never the same for everyone. And, like Medicare Compliance, you never know how long it will last.

During this special week of love, we see the similarities between Medicare Compliance and the most celebrated of emotions. So, it’s with a cheek full of tongue and a light heart that I give you seven pieces of advice on handling Medicare compliance and love.

First, don’t panic – just like love, you will find yourself thinking about your Mandatory Insurer Reporting solution (maybe talking to it?) at odd moments. My advice is to not think about it while you talk with your spouse, they’ll know you’re up to something.

Second, it’s alright to get angry about it sometimes. We are at our most vulnerable when we open ourselves to others and share our past. Reporting to Medicare is cleansing and you will grow as a person after sharing.

Third, go with the flow. The processes of love and Medicare Compliance are not always what you thought they would be.

Medicare Compliance LoveFourth, when you fall in love or start complying, you are going to meet the in-laws, the siblings and the vendors. Be sure you have the telephone number of a good friend to talk to (like Gould & Lamb, 866-672-3453)

Fifth, if you’re looking for love or a Mandatory Insurer Reporting solution, don’t rely on the Internet. Meeting a reporting partner or a life partner is best accomplished the old fashioned way, with a personal introduction and a meeting (hint –hint).

Sixth, when you have found that person or process that completes you, don’t mess it up. Love is about communication and trust; Medicare compliance is the same thing. Both parties have to talk and do the right thing for it to work.

Seventh, don’t force it – if you are ready to commit; then commit. If you have any compatibility problems with your current Medicare Compliance Partner, talk with them and then consider the Gould & Lamb solution.

MMSEA Reporting What RREs Need To Know

MMSEA Reporting – What Every RRE Should Be Doing…

National VP Sales, Gould & LambI have been in sales for 20 + years; eight of them spent in the Medicare Compliance industry. Much of what I know about Medicare, Medicaid and the SCHIP Extension Act (MMSEA) Reporting has been learned in the field by helping clients choose the best compliance options for their particular circumstance. I am conservative in my opinions and always try to err on the side of caution, like many of my clients.

It is surprising how Responsible Reporting Entities (RREs) are looking at the exposure represented by  MMSEA reporting and how many are taking huge risks. As the required reporting deadline approached, it was evident that many RREs were not going to be ready in Quarter 1 of 2011 and an extension was a happy coincidence for them. I would not count on another chance like that in the future.

The latest round of MMSEA extensions has placed a good portion of the industry in limbo. Many RREs prepared for reporting were suddenly not required to do so for another year. This problem was compounded by the fact that many have exposure in multiple lines of insurance and were leery of bifurcating their reporting program. What are the options for reporting data for these RREs that are ready? What should you be doing as an RRE if you are not ready?

You’ve Missed the First Two MMSEA Boats; Don’t Miss This One

MMSEA reporting solutions were cheap to the market in 2009 and 2010; Mandatory Insurer Reporting (MIR) providers learned that they, for the most part, had “given” their most valuable product away and now are raising prices. The average MIR reporting solution in 2009 would have cost a client about $12,000 including the implementation fee. In 2011, you can double that cost. The point; if you have contracted for MMSEA reporting services, you are currently enjoying the lowest cost. If you are not contracted for reporting services; you should address the issue as pricing will continue to rise. Locking in your cost now will bring benefits in the future.

For those RREs that are currently prepared to report- what you are waiting for? Instead of dividing your reporting program, what valid reasons are there for not sending data to Medicare now? Common concerns brought to my attention are:

  • Telling Medicare Too Much; Too soon

This will not be a concern in claims that are not settled; Medicare Secondary Payer (MSP) rights ripen at settlement and only are addressed if the claim closes through Settlement, Judgment or Award. If the claim stays open, the reporting will not affect the outcome negatively. If you report the claim early and settle, Ongoing Responsibility for Medicals (ORM) is terminated but the Total Payment Obligation to the Claimant (TPOC) amount is not reported unless you choose to send the information voluntarily.

  • Medicare will come after us

If Medicare can, it will engage in rights of recovery for conditional payments but, that process cannot begin until the settlement or award is effectuated.

  • Will there be penalties if we report early? What if we miss something?

Medicare has stated they will accept early reporting from all lines of insurance and that penalties will not be assessed on liability claims with No Ongoing Responsibility for Medical until 10/1/2011. So, if the RRE is reporting voluntarily and misses a claim, there is no potential for penalty, according to CMS.

If I Voluntarily Report Claims Data to Medicare Now, What Will That Mean for My Program?

What RREs Need to Know on MMSEA ReportingGenerally, early MMSEA reporting will not create any new exposure for an RRE. It allows the RRE to learn the data gathering process and integrate the reporting steps into their daily claims handling processes. There are many required steps to timely reporting that effect claims handling. Introducing these steps into your program now will create a learning environment without penalty. This opportunity to submit Mandatory Insurer Reporting data to Medicare with no potential for penalty has been presented to the industry for the last time in the form of this extension. How will you take advantage of this extension?

The required submissions for the first period for Workers Compensation and No Fault Insurance are going well for many RREs. If an RRE is not prepared or has not sent data to Medicare, the window to send that input file is closing quickly. If the reporting solution the RRE has chosen has failed or is not ready to submit, contact your EDI Representative to explain your situation.  There are things that can be done to help reduce your potential exposure under MMSEA Section 111 if they are addressed early.

For Liability RREs, the MMSEA extension isn’t a favor. Medicare was unprepared to deal with several issues related to Tort claims. The extension gives time for Medicare to prepare a solution to address these issues and should allow for greater scrutiny of claims reported in 2012. Many RREs are ready to submit data and intend to do so to avoid exposure.

There is no “right” answer to the question whether to report now or wait until later. The RREs that are reporting early will have a distinct advantage over their competition. They will be able to inform their potential clients that their reporting solution works and can show that live data has transferred between the reporting agency and Medicare.

RREs that decide to wait to report are going to pay more in implementation fees and contracted reporting costs. A time crunch awaits RREs that delay their MMSEA reporting and, in all likelihood, Medicare will have penalty assessment protocols in place for those who fail to take advantage of the extension.

Gould and Lamb eCodes

Section 111 Mandatory Insurer Reporting

Time Is Running Out on Section 111 Mandatory Insurer Reporting

Please join us on Monday, December 6th at 3:00pm EST for an important webinar concerning the changes to Medicare Mandatory Insurer Reporting Compliance requirements. After our December 6th webinar, there will only be  25 days left until the MMSEA Section 111 Mandatory Insurer Reporting (MIR) requirements go into effect on January 1, 2011.

If you are not prepared or you do not understand the stringent Medicare Mandatory Insurer Reporting MSP Webinarcompliance requirements… you could be liable for substantial fines and penalties…$1000 per day per claim.

Are you ready? Do you fully understand the legal implications of MIR compliance? Even if you THINK you are ready… register now for our Mandatory Secondary Payer (MSP) Reporting webinar scheduled for December 6th at 3:00 pm EST. John Miano, Manager of Gould and Lamb Client Services and nationally recognized MSP expert, Tom Blackwell will be available to address your questions and concerns following the webinar. Register now to have the opportunity to confirm that your processes are in place.

Section 111 Mandatory Insurer Reporting Attendees will receive:

•    Overview of the Section 111 Mandatory Insurer Reporting (MIR) process
•    Overview of testing with Gould & Lamb and CMS
•    Legal implications of MIR compliance
•    Legal implications of MSP compliance
•    Discussion of upcoming changes in settlements
•    Questions & Answers Session

Do not delay…space is limited. Click to Register Now and join John Miano and Tom Blackwell in this crucial and informative webinar. If you have questions or need additional information about this webinar, please contact us at 866-672-3453 ext 2020 or email us at clientservices@gouldandlamb.com.  Time is running out, please join us!