Cliff Connor, Vice President of Medicare Compliance, Gallagher Bassett Roy Franco, Chief Client Officer, Franco Signor Barry Dillard, Director, Claims Management, Walt Disney World Resort Introduction of Presenters

Agenda Medicare Background and Highlights Update on Current Medicare Landscape  Commercial Repayment Center (CRC)  CMS Issued RFP Related to Liability MSAs Medicare Part D Primer and History Introduction of SPARC Legislation Why SPARC? Support for SPARC and Future Viability Questions and Discussion

Overview of Medicare Compliance Laws/Regulations Medicare Highlights and Updates

The Commercial Repayment Center (CRC) manages recovery cases where the Responsible Reporting Entity (RRE) has reported Ongoing Responsibility for Medical (ORM), ORM Termination or Total Payment Obligation to Claimant (TPOC) via Section 111 reporting and CMS has identified the primary debtor as the RRE. Conditional Payment Notices (CPNs) are issued by the CRC as of October 25, 2015 from Section 111 data that is processed on or after October 5, If a case is reported manually to the Benefits Coordination and Recovery Center (BCRC) prior to Section 111 data being sent, the BCRC will handle the recovery. BCRC will always handle the recovery where the primary identified debtor is the Medicare beneficiary. This would be typical for liability claims. Current Landscape The Commercial Repayment Center

Current Landscape The Commercial Repayment Center (cont.) The major change is for no-fault and workers’ compensation claims, which will be handled by the CRC because the primary debtor is the RRE/Primary Plan. The CRC will issue Conditional Payment Notices (CPNs) based on the Section 111 data. A settlement, judgment, or award is no longer the applicable trigger. ORM without a TPOC or ORM Termination Date will result in a CPN, and if such notice is not acted upon a Demand for Payment will issue 30 days from CPN Notice date. BCRC will continue to issue a Conditional Payment Letter (CPL), unless they are made aware of a settlement, award or judgment before a CPL has issued, in that case a Demand would issue. Interest accrues from the first day of a Demand letter; but will not be assessed if the debt is paid within 60 days.

New WCRC to Review LMSAs CMS has issued an RFP for a new contractor Award date- July 27, 2016 New WCRC to begin on November 7, 2016 SOW states the WCRC will review “other” NGHP set-aside arrangements

New WCRC to Review LMSAs (cont.) CMS issued an Alert on June 9, 2016  Considering expansion of MSA Review process  Would review LMSAs and No-Fault MSAs CMS plans to work with stakeholders on this process Plans to hold Town Hall conferences to address comments/concerns

The Impact: Primary Plans, Applicable Plans and Responsible Reporting Entities ORM only cases are now subject to CMS recovery claims for reimbursement Workers’ compensation and no-fault payers are impacted Any administratively closed WC or no-fault claim after January 1, 2010 that has not been subject to ongoing query for Medicare is also potentially exposed to CPNs Reporting agents must properly conduct Medicare queries to avoid significant contingent liabilities Medicare query does not end when a file is administratively closed and the CRC will likely compare data of RREs for anomalies. Insurers should be particularly concerned about the impact of conditional payment recoveries on files that have reported ORM and have not reported an ORM termination

Part D Primer Established by Medicare Modernization Act of 2003 Leveraged definition of Prescription Drug Plan from Medicaid Law Extended recovery rights of Part C Plans to Part D under MSP MSP recovery rights for Part C plans for "items and services" Gap exists between what are items and services versus prescription drugs

Clarifies what is subrogation Limits recovery to Prescription Drug Plans Prohibits Medicare from pursuing claims on behalf of Part D Leverages MMSEA Section 111 data to improve coordination No subrogation exists after settlement SPARC Legislative Solution

Allows private Medicare to manage subrogation without intervention by Government Saves money because improves coordination for prescriptions by enhancing the delivery of MMSEA data to Part D Plans Saves money for Medicare. No unlimited reimbursement for recovery costs. These costs are now borne by Part D. Avoids costly False Claims Act losses as prescriptions related to workers' compensation, no-fault and liability are a challenge as difficult to say that pain medicine is forever related to a settlement of a knee injury. Why SPARC is Viable

Benefits of SPARC No Medicare intervention for recoveries and allocations Predictable methods of recovery when the case is resolved close in time to the medications being used related to the alleged injuries Allows WC and No-Fault cases to pay first with improved MMSEA Section 111 Dara coordination. Allows the Part D Plan to waive when recovery doesn't make sense. Really, spend money to recover Gabapentin at 2 cents a pill for 100mg doses?

Join MARC  Who are they?  What have they done?  Is this even possible? Ask Your Association to Support Ask Your Congressional Representative to support HR#--- Spread the word, find financial supporters How to help SPARC?

# of allocations last twelve months, add up the prescription costs and remove. Isn't this worth your time and money? One MSA prescription costs more than enough to cover a year of membership SPARC Savings - Typical Self Insured

SPARC Chances This Year Introductory year to get message out Like it's cousin SMART, next legislative cycle looks good It's a SAVER!

Election and Congressional Update Washington Update Information

Questions and Answers