Presentation on theme: "Solutions to New Medicare Compliance Rules: A Presentation to the National Council of Self-Insurers National Coverage."— Presentation transcript:
Solutions to New Medicare Compliance Rules: A Presentation to the National Council of Self-Insurers National Coverage
Medicare Crisis Medicare is now paying out more than it takes in. Healthcare costs continue to rise. Life expectancy continues to increase. Starting in 2011, the first of some 78 million “Baby Boomers” will be Medicare eligible. By 2017 the Medicare trust fund that pays for hospital benefits will be depleted. 2
Workers Compensation MSA Review Thresholds Thresholds: CMS will review and approve MSAs that meet the following thresholds: – The claimant is Medicare eligible at the time of settlement and the total settlement payout value, is greater than $25,000. – The claimant is reasonably expected to become Medicare eligible within 30 months of the settlement date and the total settlement payout value is greater than $250,000. 4
Thresholds are not a “safe harbor” Medicare has advised that these thresholds are workload review thresholds, not a “safe harbor.” Options to demonstrate consideration of Medicare’s interests in future medical without CMS approval: – Obtain an MSA, even if unapproved. – Obtain report from treating physician stating no need for future medical treatment and/or prescription medication. – Include language in settlement terms detailing disputed treatment, disallowed body parts, non-authorized providers, etc. 5
Legal Zero Dollar MSA Cases What cases qualify?: CMS will approve zero dollar set- asides for cases meeting the following qualifications: – Liability has been denied from the outset of the case. – No medical has been paid (IMEs do not count as they are for defense purposes). – No indemnity has been paid. – Case meets review thresholds. Non-threshold cases: A zero dollar MSA can also be placed on a case that does not meet thresholds, however, it will not be approved by CMS 6
Prescription Drug MSAs Medicare Part D – Prescription drug plan January 1, 2006 – All MSA’s must include separate set-aside for prescription drugs if indicated. – Only reviewed for necessity of drug MSA. – No independent pricing by CMS. – Discounts utilized. – Time limits on prescription drug use. 7
Prescription Drug MSAs June 1, 2009 – CMS begins to independently price drug MSAs. – Calculated and priced based upon average wholesale price (AWP). – “Will not use or recognize any other pricing, discounting, or calculation methods.” – Review of prescription drugs will now be similar to medical treatment. Has dramatically increased cost of MSAs 8
CMS Prescription Drug Guidelines Use of “Red Book” to determine sufficiency of prescription drug component. Treating physician will be given most weight. Utilization review in some cases. Generic unless brand prescribed. Off-label use allowed. Tapering of medications. 9
Reality of CMS Pricing of Prescription Medications CMS’s position: “We get to play God” Two Years of Records Reviewed: CMS will review the last two years of medical records and identify any medications within them. CMS Defaults to Pricing for Life: If the treating physician has not specifically stated medications have ended, changed or are being tapered, CMS will price them for claimant’s life expectancy. 10
Reality of CMS Pricing of Prescription Medications - continued CMS Requires Rx Printout or Report from Physician: If medications are identified in the medical records, CMS will require a pharmacy printout and/or a statement from the treating physician(s) for all prescribed drugs, dosing and frequency for the last two years of medical treatment. No Acceptance of Letters from Carriers/Limited Acceptance from Claimants: CMS will not accept letters concerning end dates for medical treatment unless there was no medical treatment related or unrelated to the work injury since that date in which case a letter from the claimant is acceptable. 11
Reality of CMS Pricing of Prescription Medications - continued Updated/Recent Statement from Physician: If treatment, authorized or non-authorized, did not end recently, CMS may require a statement from the last treating physician or, more likely, a recent treating physician in regard to prescription medication use. If Listed as a Brand Name, then Priced as a Brand Name: If the treating physicians reports and/or the prescription history lists the medication as a brand name, even if a generic is available, pricing for the brand name will be used by CMS. 12
Reducing Prescription Medications in MSAs Identify prescription medications – Review the same records CMS will review: Review the last two years of medical records, prescription printouts, and any more recent medical records even if for unauthorized or disputed medical treatment. – Review these records as if this is the only information you have available: In other words, if you know for one reason or another that the claimant is no longer taking a certain medication, but that is not stated in the medical records, then assume CMS will include it in the MSA. – Use MedAllocators’ Future Medication Worksheet to itemize medications listed in records. 13
Reducing Prescription Medications in MSAs Tools to reduce prescription medications – Medical Case Management (MCM): Whether it is through MedAllocators’ parent company, Ability Services Network, or another provider, the most important tool in limiting future medication and major medical treatment is MCM. Proper MCM throughout the case can address recommendations for medical treatment, open-ended medications and limiting of medications during the pendency of treatment rather than at the end – MedAllocators’ Focused On-Site Nurse Review: If so requested and permitted under law, MedAllocators will set up an RN visit with the treating physician to meet face-to-face in developing an outline of future medical treatment and prescription medications. 14
Tips to Reducing Prescription Medications in MSAs Tools to reduce prescription medications – Inquiry from adjuster to physician: If permitted under law, the adjuster can request clarification of claimant’s future prescription drug use and major medical treatment from the treating physician. – Inquiry from claimant’s attorney to physician: The claimant’s attorney can request clarification of claimant’s future prescription drug use and major medical treatment from the treating physician – MedAllocators Sample Letter to Physician: Upon request, MedAllocators can provide a sample letter to be addressed to the treating physician requesting information on prescription medication. 15
Example of cost savings by obtaining revised opinion from physician Obtaining the treating physician’s agreement to change one medication such as a muscle relaxant like Skelaxin with no generic, to a similar medication such as Flexeril with a generic, can yield significant cost savings over a claimant’s lifetime, consider: Skelaxin 800mg three times a day Annual Cost: $ 3,401.68 Cost Over 25 Year Life Expectancy: $ 85,041.90 Cyclobenzaprine (Flexeril generic) 10mg three times a day Annual Cost: $ 1,363.50 Cost Over 25 Year Life Expectancy: $ 34,087.50 Cost Savings Over Life Expectancy: $ 50,954.40 16
What will also work with CMS to Reduce MSA Judicial Decision: Unlike a consent or an agreed order CMS will accept a Judicial Decision after a hearing on the merits. – Example: Claim of injury to a leg and arm, but the court finds that only the arm is causally related to the accident. Report Limiting Future Medical Treatment: Besides prescription medications, recommendations for major medical treatments should be addressed with treating physician – Use MedAllocators’ Future Major Treatment Worksheet to itemize treatment recommendations listed in the records, i.e. spinal cord stimulator. – Request treating physician issue a report stating the treatment is no longer recommended. 17
What will not work with CMS to Reduce MSA If claim is accepted and later disputed, saying the carrier has no responsibility for future medical. Medicare applies a “you paid for it, you bought it philosophy.” Exception is if a state statute requires payment. IME’s, unless the IME is order by the judge or pursuant to state statute. Must demonstrate IME was not hired by either party. Stating the claimant has other primary insurance and will not use Medicare. Questionnaires to doctors which only leave room for limited responses by the doctor, i.e. yes or no. Claimant indicating he or she will not have the procedure that is recommended by the treating physician. Consent or Agreed Orders between the settling parties. 18
Submitting to CMS prior to settlement Submitting Early: If the case meets CMS review threshold requirements, we recommend submitting the matter early to CMS. – Provides parties with the approved MSA amount prior to settlement. – Can expedite settlement of case. – Once CMS approves the MSA, the approval letter does not expire. Cost of Waiting: Additional costs including ongoing medical and indemnity or settling a case without knowing the final CMS approved MSA amount. 19
No Formal Right to Appeal MSA Determination No right to appeal, only limited reconsideration: Except for a judicial decision or mathematical error Medicare will rarely reconsider its decision. Recommendations: – Make sure any MSA allocation report is less than 6 months old and review the MSA thoroughly to make sure you are in agreement with what is included before it is submitted. – Submit to CMS when the claimant is medically stable. – Address limiting medications and treatment prior to submission. 20
Date of Settlement MSA Date of Injury Conditional Payment MedAllocators, Inc. 2009
Medicare Lien Evaluation and Resolution Report case to Coordination of Benefits Contractor (COBC) CMS states a conditional payment itemization will automatically be generated and sent to claimant and insurance carrier Alternative #1: Insurance carrier can directly contact MSPRC and request itemization Alternative #2: A vendor such as MedAllocators can request the itemization with an Authorization to Represent form signed by client. Upon receipt of itemization of conditional payments review to determine whether there are any entries unrelated to the injury. If necessary, submit challenge to MSPRC of unrelated entries.* If MSPRC agrees, it will respond with a revised itemization. 23 *A challenge of the itemizations or a request for a compromise or waiver may require a completed Proof of Representation form be submitted to MSPRC.
Medicare Lien Evaluation and Resolution If possible, request pre- settlement compromise of Medicare conditional payments Upon settlement, notify MSPRC and request final demand letter Pay Medicare lien within 60 days of final demand letter If possible, request post-settlement compromise or waiver of Medicare lien If CMS agrees to the compromise or waiver the amount paid on the lien will be refunded 24 MedAllocators Medicare Lien Evaluation MedAllocators can investigate and review a conditional payment itemization with a completed Authorization to Represent from the client. MedAllocators can further challenge conditional payments or seek compromises and waivers with a completed Proof of Representation signed by the claimant and our client.
Consequences of Failing to Consider Medicare in Settlement Medicare seeks reimbursement from primary payer, such as insurer or self-insurer. – Can seek double damages if suit is brought Medicare seeks reimbursement from entities receiving funds from settlement such as claimant or claimant’s attorney. Nothing, if no conditional payments were made and the claimant never again seeks treatment related to the injured body part. Medicare denies future injury-related treatment to the claimant. 25
27 Mandatory Reporting Overview Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA Section 111). The law requires that claims involving Medicare beneficiaries must be reported to Medicare. This applies to workers’ compensation, general liability, and no fault cases. Purpose: Prevent Medicare from making payments for treatment that should be paid by a primary payer and to enforce Medicare liens.
28 Mandatory Reporting Overview Responsibility for reporting: This rests with what Medicare terms Responsible Reporting Entities (RREs). – Generally the RRE is a self-insured company or subsidiary or the insurance company. It is not a third party administrator (TPA). Who does the reporting?: The RRE can do it in-house, assign to a TPA or assign to a vendor. Penalty: $1,000 per day, per claimant penalty for not properly reporting. MSAs: Section 111 reporting requirement does not discuss Medicare Set-Asides.
29 Mandatory Reporting Timeline - Updated RREs must register by 9/30/09. By 12/31/2009 the RRE must have a system in place to report files. Between 1/1/2010 and 3/31/2010: Mandatory testing period for files. (Has now been continued until the end of 2010). Between 4/1/2010 and 6/30/2010: First actual submissions made based upon a schedule determined by Medicare. (Has now been continued until 1/1/2011 – 3/31/2011). Subsequent reports will be made on a quarterly basis.
Reporting Trigger: Ongoing Responsibility for Medical (ORM) - Updated All cases in which there was an ongoing responsibility (ORM) for medical on July 1, 2009 (changed to January 1, 2010) or later must be reported. Exclusion: Workers compensation cases meeting all the following criteria are excluded from reporting through December 31, 2010 (changed to December 31, 2011) – Medicals only – Lost time of no more than 7 days – All payments made directly to medical provider. – Total payment does not exceed $750.00. 30
Reporting Trigger: Total Payment Obligation to the Claimant (TPOC) Total payment obligations to the claimant, TPOCs, (defined as settlements, judgments, awards or other payments) involving Medicare beneficiaries from January 1, 2010 onward must be reported. (changed to October 1, 2010) Temporary exceptions to reporting: – TPOC of $5,000 or less through 12/31/2011 – TPOC of $2,000 or less through 12/31/2012 – TPOC of $600 or less through 12/31/2013 – No low dollar threshold after 1/1/2014 31
32 Strategies for complying with Medicare 1) Identify claims with Medicare and/or SSDI beneficiaries 2) Formulate a plan to consider future medical under the MSP: 1) Put practices in place to limit future treatment and Rx 2) Does the claim meet review thresholds? 3) Obtain MSA prior to settlement and review and discuss it 4) Submit and obtain approved MSA prior to final settlement. 3) Formulate a plan to investigate and resolve Medicare liens: 1) Challenge conditional payments unrelated to injury. 4) Formulate a plan for complying with Section 111 reporting: 1) How is information to be gathered from claimants? 2) Who is to transmit this information to Medicare?