CMS conducted a Town Hall Teleconference for Mandatory Reporting and Liability Insurance (including Self-Insurance), No-Fault Insurance and Workers’ Compensation on April 9, 2013. The purpose of the call was to address Policy and Technical Support issues with Section 111 reporting; however, callers used the opportunity to enlist substantive CMS responses regarding overall Medicare Secondary Payer Compliance. CMS was cordial in answering such questions, but it was frustrating for these authors to listen to questions that have been previously asked and answered. A number of recurring themes are listed below, and is intended to provide some assistance for the primary plan and applicable plan (RRE) as to its responsibility under the Medicare Secondary Payer Act, which has been law since December 5, 1980.
1. Termination of Medicare Benefits – Beneficiaries are complaining to potential primary plans and applicable plans (Defendant(s)) that their benefits have been terminated by CMS. Health Care Providers are required to inform the Coordination of Benefits Contractor (COBC) of involvement of a Defendant(s) as a possible cause of an injury. As a result of such information the Beneficiary claimants are being told by COBC Call Service Representatives (@ 1-800-MEDICARE) that their treatment, or payments for such treatment, will be in jeopardy because of the open MSP situation. CMS (Barbara Wright, John Albert, Bill Decker and Jeremy Farquhar) acknowledged that these issues are occurring and are being investigated by CMS as they should not occur. They admit it’s difficult to police such process as there are over 3,000 representatives at the COBC call center. CMS asked the group on the call for specific situations to assist in its investigation. A request was made to send clear examples of such situation(s) to the CMS public email box – PL110-173SEC111firstname.lastname@example.org.
- A cause of this issue is the data being reported by providers (hospitals, doctors and/or other care givers). This data is a result of inquiry of the beneficiary who may not be in the best position to give clear answers about who is responsible to pay for their accident. For example, in an automobile accident the beneficiary may know the driver that caused the accident, but not the insurance carrier that ultimately would pay for injuries. The provider enters the driver name as the potential primary plan and this causes the common working file to indicate an open MSP situation. The open MSP situation makes it difficult for the Health Care Provider to treat as CMS requires the provider to bill the primary plan first – and wait 120 days before billing Medicare. The beneficiary is being told he or she does not have Medicare benefits, and results in general confusion. Providers should be allowed to bill Medicare unless the MSP situation is verified. As of today, the only method is for the Defendant to issue a letter to the Provider that the claim is in dispute. However, how does anyone know the MSP situation was properly identified to begin with? . CMS should revisit such training and the effect it is having on the liability industry. Click here for an example of the Provider Training.
- Another common cause is what occurs after settlement, judgment or award. While CMS has not adopted a formal policy on how to treat future medical, we have seen situations where the Beneficiary’s social security retirement or disability payments are being reduced to offset medical treatment related to the claim. The Beneficiary then calls the Defendant to complain, but the Defendant is in no position to deal with the issue, as CMS has no policy in place. Care has to be taken at time of settlement, judgment or award to avoid this situation.
2. ORM and Med Pay Coverage – Barbara Wright again made clear to the callers that that Med Pay is “ORM” and that a Section 111 report must be issued as soon as responsibility is determined to make such payments. ORM does not require payments to be made, the existence of the responsibility is what triggers responsibility to report. There is no threshold to report ORM, if the coverage is applicable, it must be reported. Once reported, it is open until the Defendant reports the termination of benefits. CMS recognizes limited situations in which ORM can be terminated: 1) Policy coverage is exhausted; 2) Operation of law; and 3) Certification by Treating Physician that treatment is complete and no reasonable treatment expected that is related to the claim. An interesting line of questioning directed to t Barbara Wright was the concept of waiting to report a Med Pay portion of a claim, post-settlement, as is done through liability TPOC reporting. Barbara Wright made clear that a TPOC settlement is separate from Med Pay. From CMS perspective there are two claims – No Fault for Med Pay and Liability for the Personal Injury Claim. Each are separate and must be handled independently of the other.
- Our office regularly provides feedback on this very issue. We estimate that most RREs are not timely reporting the Med Pay issue, usually based upon the reasoning that “it’s only $5,000”, or “Medicare will be reimbursed when the liability portion settles”. Do not fall victim to this logic! Get your claims operations used to reporting any and all ORM situations on a timely basis! OR do as at least one client has done: Stop writing Med Pay into your policies…
3. Future Medical & Liability Settlements – Future incident-related care and treatment is anticipated post-settlement of a liability case. What do we do? CMS Responded that the question was outside the scope of the call. The Agency is dealing with the future issue starting last year with the ANPRM requesting information from the Industry on the topic and refused to give any time-line when it will complete any policy or regulations. .
- The liability industry is clearly hungry for guidance in this area. CMS requires Medicare’s interests be protected and how to do this is being left to the Parties to decide on a case by case basis. These authors are of the opinion that unless a valid exception can be found to that would satisfy Medicare’s interest (e.g., Treating Physician Certification – no further treatment), the Parties must protect Medicare. The Defendant does not have any legal authority to unilaterally force the Beneficiary to protect Medicare’s interest, but should do its best to inform all Beneficiaries of current CMS policy. If a Liability Medicare Set Aside (LMSA) is contemplated by the Parties, these authors recommend a third party approval of same, as CMS will not recognize a private allocation between the Parties. In our experience, the Court is willing to hear evidence and enter an Order because of the ambiguity of the present law. See our blog for all the LMSA court approval cases and commentary. Beneficiaries who do not protect Medicare put at risk their future Social Security retirement and disability benefits. Defendants, so long as they act reasonably, are not exposed post-settlement; however, they need to document clearly their efforts to encourage the Beneficiary to protect Medicare.
4. SMART ACT – Prior to any questions being asked about the recent SMART legislation, CMS made clear that it would not answer any questions about it. The Act has built in time-frames for CMS response, and CMS plans to respond accordingly.
- SMART will accomplish the following once implemented:
i. Web Portal Method to download Final Demands for Conditional Payments BEFORE settlement – Regulations to be promulgated no later than October 10, 2013
ii. Defendant’s right of appeal on any determinations. Regulations required, but may not be necessary, for Defendant’s to take action in U.S. District Court, as under 28 U.S.C. §1440(a), Defendants would have no administrative remedies to exhaust (until regulations are developed). See Michigan Academy exception
iii. Modify MSP threshold for all aspects of MSP compliance to be exclude liability claims that would cost more for CMS to recover than it is worth. CMS to publish first threshold on 11/15/2013 to be applied for calendar year 2014.
iv. Exclude use of Social Security Numbers and Health Care Identification Numbers for all aspects of MSP compliance. This part of the law will take at a minimum until 7/10/2014 to implement, but could be extended another year at request of CMS.
v. Three year statute of limitations that is triggered with Section 111 reporting. This part of the law is effective as of 7/10/2013.
vi. Modify Section 111 Penalties, but requiring Safe Harbors. CMS to publish ANPRM requesting industry comment by March 10, 2013, and we have yet to see this move forward, but should be in place PRIOR to any penalties under Section 111 being implemented.
Written by: Jeff Signor and Roy Franco