Presentation on theme: "MEDICAID & SCHIP EXTENSION ACT OF 2007 (MMSEA). HISTORY OF MSP Old Statute – New Teeth Medicare first enacted 1965 1965 – Medicare was the primary payer."— Presentation transcript:
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, workers 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?
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 Reporting Entity (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 RREs can determine claimants Medicare entitlement status RRE submits claimants 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 33828 Detroit, 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 Statement Rule 62 Summary Statement 2. Discovery: Requests for Production Interrogatories Requests for Admission Depositions
Identification Insurer (RRE) no longer has to rely on opposing counsel to determine claimant/plaintiffs 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 MSPRCs customer service line. To call, you need: (1) Case identification number found on all MSPRC correspondence. (2) Beneficiarys date of birth. (3) First five letters of the beneficiarys last name as it appears on their Medicare card. (4) Last four digits of beneficiarys Social Security number or full Medicare number.
Reimbursement Whats 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 Cost Hardship Waiver Financial Hardship Against Equity and Good Conscience Court 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 $25,000less 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 Summary Make 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 Medicares 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 Workers 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
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 workers 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 Medicares interests in not having to pay for medical expenses (past and future) for which another entity is the primary payer. Reasonable Efforts Good 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 Requirement New Dates: TPOC AmountTPOC date on orSection 111 Reporting after Required in the Quarter beginning TPOC over $100,00010/1/111/1/12 TPOC over $50,0004/1/127/1/12 TPOC over $25,0007/1/12 10/1/12 TPOC over minimum10/1/121/1/13 report is required to be collected beginning October 1, 2010
Penalties CMS STATUTORY RIGHTS UNDER MSP Noncompliance 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 ON RESOLVING 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 Claimants Medicare status must be determined by liability insurer or workers compensation carrier
QUESTIONS? THANK YOU FOR YOUR PARTICIPATION! MSPRC website: http://www.msprc.info/http://www.msprc.info/ CMS manual: https://www.cms.gov/MandatoryInsRep/Downloads/NGHPGuideV3.3.pdfhttps://www.cms.gov/MandatoryInsRep/Downloads/NGHPGuideV3.3.pdf