medicaid & schip extension act of 2007 (mmsea). history of msp old statute – new teeth...
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MEDICAID & SCHIP EXTENSION ACT OF 2007 (MMSEA)
HISTORY OF MSP
Old Statute – New Teeth
• Medicare first enacted 1965• 1965 – Medicare was the primary payer for
medical even when medical services were covered by other insurance
HISTORY OF MSP
In 1980 – Congress enacted Medicare Secondary Payer (MSP) Legislation
Required Medicare to serve as secondary payer when beneficiary has overlapping coverage
MSP – Medicare will conditionally pay for beneficiary's medical expenses and may then seek reimbursement from primary plan
Primary plans include group health plans, liability, worker’s compensation, automobile or no fault
December 2007, the Medicare, Medicaid & SCHIP Extension Act (Extension Act)
of 2007was signed into law
The Extension Act creates enhanced reporting requirements, not new ones
Section 111 of the Extension Act adds new mandatory reporting obligations to
the MSP (Medicare Secondary Payer Act)
4 Step Process:
Identification Notification Reimbursement Reporting
HISTORY OF MSP
Road Map for MMSEA Section 111
• Identification: Is the Claimant entitled to Medicare benefits?
• Notification: Medicare – we have a claim.
Road Map for MMSEA Section 111
• Reimbursement: How much does Medicare get paid back?
• Reporting: We have settlement or judgment – now what?
IDENTIFICATION – WHO IS ELIGIBLE?
have been entitled to Social Security disability benefits for 24 months receive a disability pension from the Railroad Retirement Board and meet certain conditions receive Social Security disability benefits because of Lou Gehrig’s disease worked long enough in a government job where Medicare taxes were paid and meets the
requirements of the Social Security disability program is the child or widow(er) age 50 or older, including a divorced widow(er), of someone who has
worked long enough in a government job where Medicare taxes were paid and meets the requirements of the Social Security disability program.
have permanent kidney failure and you receive maintenance dialysis or a kidney transplant are eligible for or receive monthly benefits under Social Security or the Railroad Retirement
Board -have worked long enough in a Medicare-covered government job -are the child or spouse (including a divorced spouse) of a worker (living or deceased) who has worked long enough under Social Security or in a Medicare-covered government job.
Who Must Protect Medicare Rights?
• Plaintiff• Plaintiff attorney• Defendant• Defense attorney • RRE• “Any Entity” involved in the settlement
conclusion of the claim is obligated to protect Medicare's interest
MMSEA Applies to Primary Payers
Primary Payers “any entity that is or was required or
responsible to make payment with respect to an item or service (or
any portion thereof) under a primary plan.”
Who Must Contact Medicare?
Primary Payer = Responsible ReportingEntity (RRE)
• Liability Insurance Plan• No Fault Insurer• Workers Compensation Plan• Self-Insurers• Third-Party Administrators• Group Health Plans
• Medicare Priority Right of Reimbursement• Not Ordinary Lien
MSP gives Medicare Direct Right of Action to recover Conditional Payments from any entity who
received a primary payment– Medicare beneficiaries– Attorneys– Physicians & Medical Providers– Suppliers– State Agencies– Private Insurers
IDENTIFICATION
HOW TO HOW TO ACQUIRE THE NECESSARY INFORMATION
AUTHORIZATION FOR RELEASE OF RECORDS
DISCOVERY REQUESTS
Ways to ensure compliance:
Adjuster:• Advise of Medicare Obligations at onset of claim• Obtain CMS Release & HIPPA Release from Claimant /
Insured• Send in CMS Release• Ensure Query system has been used
IDENTIFICATION
CMS QUERY SYSTEM
• Method by which RRE’s can determine claimant’s Medicare entitlement status
• RRE submits claimant’s name, SSN, date of birth & gender
• Confirms entitlement status only – not dates or basis of entitlement
• Written verification of entitlement status provided• Submission of query alone does not satisfy reporting
requirements
Identification
When Query System and Authorization are utilized, notification (not reporting)
obligation is satisfied.are utilized, notification obligation is
satisfied.
CMS QUERY SYSTEM
• RREs can Query 1 x Month• Each Query can have Multiple
Claimants• Query as close to settlement as
possible
Identification
Mail Consent to Release to MSPRC at:
MSPRC Auto/Liability[check address as it changes]
P.O. Box 33828Detroit, MI 48232-0998
Fax: (734) 957-0998
*Note: CMS will combine its Medicare secondary payer recovery contractor (MSPRC) and coordination of benefits contractor (COBC) contracts into a centralized contract called the Medicare Secondary Payer Integration Contractor (MSPIC).
Notification
Send authorization as soon as claim is made
Identification
Ways to ensure compliance:
Attorneys:
1. Pleadings:Brief StatementRule 62 Summary Statement
2. Discovery:Requests for ProductionInterrogatoriesRequests for AdmissionDepositions
Identification
• Insurer (RRE) no longer has to rely on opposing counsel to determine claimant/plaintiff’s Medicare status
• Insurer (RRE) is now directly responsible for determining Medicare eligibility status by submitting inquiry to CMS
What happens next?
• COBC opens a potential recovery case and refers matter to second contractor – the MSP Recovery Contractor (MSPRC)
• CMS will issue “Rights and Responsibilities Letter” to claimant & his/her counsel
Reimbursement
How Much Does Medicare Get Paid Back?• Medicare sends Conditional Payment
Letter (CPL) or Conditional Payment Notice (CPN) within 65 days.
• This is the Initial Demand
Reimbursement
What is a conditional payment?
A conditional payment is a payment that Medicare makes for services where another payer may be responsible. The payment is “conditional” because it must be repaid to Medicare when a settlement, judgment, award or other payment is secured.
Reimbursement
Conditional Payment Letter An initial Conditional Payment Letter will be generated
automatically within 65 days of the issuance of the “Rights and Responsibilities Letter”.
Conditional Payment Letters will go to all authorized parties.
Additional requests for Conditional Payment Letters will not speed up the process.
September 30, 2011:Self-service information feature added to MSPRC’s
customer service line. To call, you need:
(1) Case identification number found on all MSPRC correspondence.
(2) Beneficiary’s date of birth.(3) First five letters of the beneficiary’s last name as it
appears on their Medicare card.(4) Last four digits of beneficiary’s Social Security number or full Medicare number.
Reimbursement
What’s a CPN?A CPN is issued in lieu of Conditional Payment Letter (CPL) in certain circumstances when a settlement, judgment, award or
other payment has already occurred.
1. If the MSPRC is notified of a settlement, judgment, award, or other payment through Section 111 reporting rather than from the beneficiary or their representative.
2. If the MSPRC has been alerted to a settlement, judgment, award, or other payment AFTER settlement has been reached.
Reimbursement
NEGOTIATING THE LIEN:• Identify unrelated treatment (ICD9 Codes)• Provide IME Reports• Procurement Cost• Hardship Waiver• Financial Hardship• Against Equity and Good Conscience• Waiver of Rights
Reimbursement
REDUCTIONS BASED ON:Procurement CostHardship WaiverFinancial HardshipAgainst Equity and Good ConscienceCourt Order on the merits which designates amounts
not related to medical expenses
Self-Calculation Option
• Physical trauma based injury.• Settlement does not relate to ingestion, exposure, or a medical
implant.• Settlement is expected to be and ultimately or • Date of incident must be at least before submission.• Beneficiary must to appeal but retains the right
to pursue waiver.• Causally-related medical and no further
treatment is expected, supported by either:• Make highlights stand out
is $25,000 less
six months
give up the right
treatment is complete
Self-Calculation Option
– A written physician attestation, OR– A written certification provided by the beneficiary
that:• No medical treatment related to the case has occurred for
at least 90 days prior to submitting the self-calculated final conditional payment amount to Medicare, AND
• There is no causally-related future care expected.
New Fixed Percentage Option
New Fixed Percentage Option for Medicare's Recovery Claim: Effective November 7, 2011, the
Centers for Medicare & Medicaid Services has implemented a new and simple fixed percentage
option that is available to beneficiaries who receive certain types of liability insurance (including self-
insurance) settlements of
$5,000 or less
$300 Threshold on Liability Settlements
$300 Threshold on Liability Settlements: Medicare has implemented a threshold for certain Liability Insurance cases. If all of Medicare's criteria are met, the MSPRC will not recover against the beneficiary's settlement, judgment, award or other payment.
$300
READY TO SETTLE?
Before you Settle:
1. Have Current Conditional Payment SummaryMake sure any unrelated items have been challenged and struck so conditional payment amount is as lean as it can be.2. Discuss:• Options for paying settlement proceeds• Options for notifying MSPRC of settlement• Options for paying Medicare’s recovery demand• Any specific terms opponent will require in the Settlement
Agreement/Release, and any “deal-breakers”• How waiver or appeal rights will be managed• How evidence of future accident-related treatment (if any)
will be handled
Reimbursement
Final Recovery Letter
*This is the actual amount of the lien*
“We have determined that you are required to repay the Medicare Program $XXX.xx.”
SETTLEMENT -RELEASE BEST PRACTICES
Non Medicare Settlement Releases:
a. ______ (initial): I did not incur and medical treatment related to any of the aforementioned incidents that were paid for by Medicare and I have acted in good faith and made all reasonable efforts to ensure same. b. ______ (initial): I do not have kidney failure. c. ______ (initial): I was less than 62.5 years old at the time of this accident. d. ______ (initial): I have consulted with a physician and have been advised that I will not need any future medical treatment related to this accident, or that the medical treatment I will receive is not materially different than that which I was receiving prior to this accident. e. ______ (initial): I will not be Medicare eligible within the next thirty months and do not anticipate applying for Social Security benefits during the next thirty months.
SETTLEMENT -RELEASE BEST PRACTICES
Medicare Paid Medical Expenses Medicare Lien No Future Treatment - Treating Physician Certifies in writing
(September 29, 2011 CMS Bulletin)
SETTLEMENT -RELEASE BEST PRACTICES
Lien to be repaid out of settlement funds by defense No future medical care anticipated per doctor Defense to be provided final discharge letter Good faith / reasonable efforts
SETTLEMENT -RELEASE BEST PRACTICES
Medicare Paid Medical Expenses Medicare Lien Treatment Ongoing Future Medical Treatment Expected Plaintiff – No Worker’s Compensation Lien LMSA Applies
SETTLEMENT -RELEASE BEST PRACTICES
Lien to be repaid out of settlement funds by defense “Set-Aside” language (amount, type of account,
restrictions) Defense to be provided discharge letter Good faith / reasonable efforts
SETTLEMENT -RELEASE BEST PRACTICES
Medicare Paid Medical Expenses Medicare Lien Treatment Ongoing Future Medical Treatment Expected Plaintiff Injury and at work – Worker’s
Compensation Lien
Holiday No Holiday
LMSA Required No LMSA
SETTLEMENT -RELEASE BEST PRACTICES
Lien to be repaid out of settlement funds by defense Defense to be provided final discharge letter Good faith / reasonable efforts “Set-Aside” language and worker’s compensation
Holiday directives Superior Court / Labor Department approval
SETTLEMENT -RELEASE BEST PRACTICES
$300 or Less Use Standard General Release
Timing of Payment Issue with Insurance Regs or Statutes
• Delay created by CMS reporting/approval• May conflict with deadlines for payment of
settlements or judgments – Reg 1002• Best Practice- build into settlement agreement
that no payment of any kind until X days after the determination of final lien amount by CMS– Need to allow time for claimant to appeal CMS
determination
Future Medical Expenses:
Section 111 does not specifically require liability carriers to provide for allocations for future Medicare expenses BUT:
“to protect Medicare’s interests in not having to pay for medical expenses (past and future) for which another entity is the primary payer.”
Reasonable EffortsGood Faith
Future Medical Expenses:
Unfortunately, CMS is not in a position to review set asides at this
time.
Reimbursement
CALCULATING AMOUNT OF ALLOCATION• Amount based on reasonable
projection of future medical costs related to injury that would otherwise be covered by Medicare
• Based on amount that Medicare would ordinarily pay (considering deductibles & co-pays)
• Based on life expectancy & rated age of beneficiary
Future Medical Expenses:
ALLOCATION OPTIONS• Self-Administered Accounts
– For small amounts– Plaintiff administers following same accounting rules as a professional
administrator• Custodial Accounts
– Larger Amounts– Administered by a professional custodian for a fee
• Trust– Plaintiff receiving means-tested public benefits (SSDI, Food Stamps,
Veterans Benefits or Section 8 Housing. – A formal trust with a trustee– Formal MSA Trusts are not yet available in liability cases.
• Structured Settlements
Penalties
REIMBURSEMENT TO MEDICARE• Medicare must be reimbursed within 60 days of
receipt of payment by Medicare beneficiary• If a liability insurance settlement is made and
Medicare is not reimbursed, the third party payer must reimburse Medicare even if it has already paid the beneficiary!
• Applies regardless of how amounts are designated in settlement (i.e. pain & suffering)
Reimbursement
FINAL CLOSING LETTER• “We have received check number
XXXX in the amount of $XXX.xx.”• The amount has been applied to
outstanding debt due Medicare. The principal amount of the debt and interest (if applicable) has been reduced to zero and our file is being closed.
Reporting
Reporting – When to Report…“TPOC” = “Payment” = Obligation to repay lien arises
when payment to claimant has been made.• Separate and distinct from the obligation to pay back
the lien and applies regardless of whether there is a lien.
• Reporting requirement is obligated anytime a claimant is entitled to Medicare
Reporting
Reporting RequirementNew Dates:
TPOC Amount TPOC date on or Section 111 Reporting after Required in the
Quarter beginning
TPOC over $100,000 10/1/11 1/1/12TPOC over $50,000 4/1/12 7/1/12TPOC over $25,000 7/1/12 10/1/12TPOC over minimum 10/1/12 1/1/13
report is required to be collected beginning October 1, 2010
Penalties
CMS’ STATUTORY RIGHTS UNDER MSPNoncompliance with reporting = $1,000 per day
For Failing to Pay:• Disruption of Benefits• If not paid within 60 days =• Subrogation rights• Plaintiff can sue• Medicare can sue• Award =
Interest
Double Damages
WHAT IS THE IMPACT ONRESOLVING CLAIMS?
• Indemnification clauses shifting responsibility to plaintiff are no longer sufficient to protect the insurer
• Insurers have an affirmative obligation to report
• Efforts to address Medicare liens must begin at an early stage in litigation
• Claimant’s Medicare status must be determined by liability insurer or worker’s compensation carrier
QUESTIONS?
THANK YOU FOR YOUR PARTICIPATION!
MSPRC website: http://www.msprc.info/ CMS manual: https://www.cms.gov/MandatoryInsRep/Downloads/NGHPGuideV3.3.pdf