Presentation on theme: "MEDICARE COMPLIANCE: A Practical Approach to MSAs, Conditional Payments and Mandatory Reporting for WC and Liability Claims Operations September 19, 2012."— Presentation transcript:
MEDICARE COMPLIANCE: A Practical Approach to MSAs, Conditional Payments and Mandatory Reporting for WC and Liability Claims Operations September 19, 2012 PRESENTERS Jon Gunter - Executive VP, MEDVAL Anne Hernandez – Senior Managing Partner, Law Offices of Mullen & Filippi Janet Selby – WC Program Manager, Municipal Pooling Authority Brian T. Moss – Managing Partner, Orange County, Law Offices of Manning & Kass, et. al.
MEDICARE COMPLIANCE: THREE KEY AREAS Mandatory Insurer Reporting MMSEA Section 111 Data Reporting – current Medicare beneficiaries Conditional Payment Recovery CMS Has Statutory Recovery Rights (not a lien) Dispute/Appeal/Pay Medicare Set-Aside Arrangements (MSA) Prevent Future Conditional Payments No Shifting of the Burden (of Future Medical Payments) to Medicare Each area is separate and distinct with its own protocols and workflows.
CMS CONDITIONAL PAYMENTS Online portal open as of 7/2/12 -www.msprc.info for more informationwww.msprc.info Tips for speeding up receipt of information -Beneficiary signs in to www.mymedicare.govwww.mymedicare.gov -Set deposition of MSPRC expert Follow the process – dispute first, appeal only if necessary Interest accrues during appeal process (begins 60 days after letter date) Recovery exposure may be against any party to the settlement [42 USC 1395y(b)(2)(B)(iii)]
A RISK MANAGEMENT APPROACH TO MSAs What does the law say (or not say)? -Medicare may not pay if payment can reasonably be expected to be made under WC, Liability or No Fault [42 USC 1395y(b)(2)] -No mention of “MSA” or “WCMSA” or “LMSA” What does CMS say? -There are no statutory or regulatory provisions requiring a WCMSA be submitted to CMS for review [CMS Memo dated May 11, 2011] -Review thresholds ($25,000 and $250,000) are based on CMS workloads, are subject to change, and are not safe harbors How do we remain in compliance and apply this to our settlements? -Evaluate cases on individual basis v. submit every MSA for review -Consider MSA + Structure + Professional Administration + Language -Goal: Settle without overfunding the exposure
A LOOK AT TERMINOLOGY WCMSA = A future medical allocation prepared and priced with the intent of submitting to CMS for approval in a workers’ compensation settlement. Creation of this allocation type follows all protocols listed in CMS memoranda. LMSA = A future medical allocation prepared for use in conjunction with a liability case settlement. Pricing techniques currently vary – may use Medicare fee schedule, or usual/customary pricing. Depending upon jurisdiction, review/approval of this allocation may or may not be available. MSA = A future medical allocation prepared with the intent of preventing the cost- shifting of any post-settlement future medical care to Medicare. Not intended to pass through the current CMS review process. Pricing technique typically mirrors costs actually being paid in the claim and/or costs the applicant can obtain post- settlement on their own vs. the pricing required for approval of a WCMSA such as AWP, etc.
WORKERS’ COMPENSATION MSA BASICS DO YOU WANT TO SETTLE BY COMPROMISE AND RELEASE IF YOU NEED AN MSA? Consider: 1. Medical Reserves versus WCMSA value 2. Retired employee versus former employee with ongoing employment 3. Cost of WCMSA versus likelihood of settlement 4. One-year delay in finalizing settlement waiting for CMS to review the WCMSA
WORKERS’ COMPENSATION MSA BASICS Recent case law allows for applicant’s attorney’s fees from a settlement to include MSA values More interest in C&R from EE Viale v. Lockheed Martin
WCMSA VALUE IN TYPICAL WORKERS’ COMPENATION CASE EXAMPLE 1 Non-surgical back, 26% permanent disability, non-surgical future medical Conservative Care MSA: $44,300.00 Aggressive Care MSA: $93,000 Includes: Ms Contin, Celebrex
WCMSA VALUE IN TYPICAL WORKERS’ COMPENATION CASE EXAMPLE 2 Non-surgical back with non-surgical FM Typical MSA: $65,000 Includes: Norco, Ambien, Cymbalta
WCMSA VALUE IN TYPICAL WORKERS’ COMPENATION CASE EXAMPLE 3 Wrist, knees Typical MSA: $63,000 Includes: Knee replacement, Norco
WORKERS’ COMPENSATION MSA BASICS There are savings advantages to structuring an MSA v. funding as a lump sum Not recommended for MSAs under $35,000 with today’s rates MSA is set up with an initial deposit and annual payments Life Expectancy based on rated age, not actual age Note: should obtain a rated age for use in all MSAs, whether structured or lump sum
THE EFFECT OF MSP COMPLIANCE IN REAL LIFE Real cases raise questions and consideration for the settling parties such as: -Medicare compliance creates “decision points” for every case -Post-settlement Medicare denials for beneficiaries -Not all treatment is Medicare covered (hearing loss, etc.) -SSDI – on or off, what if SSA records are incorrect? -Chronic pain meds – using a PBM to reduce exposure prior to MSA -Settling with and without CMS Approval
CASE SCENARIO # 1 41 y/o police officer, failed low back surgery, now treating for chronic pain CMS returned query showing he was a beneficiary, likely based on disability status Excess wanted to explore settlement, MSA requested Total MSA $324,000, of which, $292,000 was medications; potentially another $73,000 for a medication that was recently stopped Actual expenses $5000/year, lifetime exposure of $190,000 EE advised no longer a Medicare beneficiary at that point, had received benefits in the past but then denied at some point Decision Point – Do we seek Medicare approval or settle without and note the consideration of Medicare’s interests in the settlement language?
CASE SCENARIO # 2 66 y/o retired police officer, Medicare beneficiary, injuries to low back and heart Employee having trouble with Medicare rejecting bills for unrelated conditions and was also having difficulty finding a physician under WC (living in Texas) MSA requested to use in evaluating Medicare interests as part of C&R negotiation Total value of annuity to cover Medicare exposure was $45,000 for both injuries EE was concerned about what happens if he has a major cardiac event and the entire MSA is used – will Medicare resume covering his heart treatment thereafter? Decision Points – Is there a value on top of the MSA amount, for either uncovered services or as motivation to settle? Will Medicare resume payment in the event of unexpected circumstances that deplete MSA funds? Should we have the MSA professionally administered?
CASE SCENARIO # 3 64 y/o retired police officer, not yet a Medicare beneficiary, hearing loss Medical treatment consisted of hearing aids and periodic hearing testing We approached the employee regarding settlement of his future medical award by C&R Reasonable expectancy that employee will become a Medicare beneficiary within the next year, but Medicare does not cover hearing aids Total value of settlement estimated at $12,000 for hearing aids and related testing Decision Point – Do we need to consider Medicare’s interests when settling with a beneficiary or near beneficiary whose current treatment is not covered by Medicare? If so, how do we do this when no value for Medicare –covered treatment is available?
ITEMS MEDICARE DOES NOT TYPICALLY COVER NOT COVERED BY MEDICARE PARTS A/B Home assistance for laundry, gardening, window cleaning, meal preparation and other maid services Mileage reimbursement Transportation services (taxis, limos, bus passes) Home modifications Most dental and vision care NOT COVERED BY MEDICARE PART D Vitamins, supplements Over-the-Counter medications Benzodiazepines (tranquilizers such as Valium, Xanax) “Off Label Use” drugs (such as Actiq being used to control pain in a non-cancer patient) NOTE: For example purposes only – not an exhaustive list.
MSP COMPLIANCE IN LIABILITY CLAIMS Liability v. Workers’ Compensation: What are the distinctions? Basic Definitions -“Settlement” -“Future Meds” -“Secondary Payer”
NEGOTIATIONS v. SETTLE v. TRIAL Negotiations - Conditional Payment Letter -Final Demand -Threshold v. Comfort Level -Prosecution? Settle -MSA v. Conditional Payment Reimbursement -Negotiating with Medicare Post Settlement -WCMSA in place, but settled for less Jury Trial -Future Medicals -MSA as evidence?
LIABILITY CASE EXAMPLE HIGH EXPOSURE 3 RD PARTY CLAIM WITH UNDERLYING, ONGOING WC CLAIM WC concerns and road blocks Approaches considered: step into WC carries shoes (take over lifetime medicals to remove WC issue from negotiation) Outcome Lessons learned WC liability v. employer liability Causation (real world WC v. liability) Something Else To Consider: - SIU and CMS…how, or do they interact?
MSP COMPLIANCE – LEGISLATION UPDATES CMS 6047 Advance Notice of Proposed Rule Making (ANPRM) -CMS sought industry comment for handling future medicals in liability cases -Comment period ended 8/14/12 -Results will become “rules” (not memos as in WC) S.M.A.R.T. Act -HR 1063 and S 1718 (strong bipartisan support) MSP and WC Settlement Agreements Act -HR 5284 (4 th attempt, 3% chance of passing)
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