The Casualty Actuarial Society (CAS) Committee on Health Care Issues recently analyzed ten cases to estimate the future impact of Medicare Secondary Payer reporting requirements to the P&C industry. The CAS study was published in an article in Claims Journal. The cases studied involved insurance in various lines of business: workers’ compensation, private passenger automobile and homeowners insurance. The study found that the Medicare reporting requirements resulted in a modest cost increase to each line of business.
Let’s explore where these modest cost increases associated with Section 111 Reporting may be coming from. While the front line adjuster is tasked with securing more data due to Section 111 reporting requirements, a streamlined process for gathering and storing such data is needed. Workers’ compensation claims that involve Medicare beneficiaries, or reasonably expected Medicare beneficiaries, cannot settle if there are significant AOE/COE (arising out of the course and scope of employment) or medical causation issues. The Centers for Medicare & Medicaid Services (CMS) recommended Workers’ Compensation Medicare Set Aside review program cannot manage cases in which the parties must reach a compromise. It is only designed to work for those workers’ compensation matters that can be commutated (no AOE/COE or medical causation involved). This results in significant open cases that cannot settle, ultimately resulting in increased costs to the insurance carriers.
In regards to automobile cases that involve PIP, Medicare will launch the Commercial Repayment Center (CRC) on 10/1/2015. For the first time CMS will use Section 111 data to auto generate Conditional Payment Notices (CPNs) for cases that do not involve a settlement, judgment or award. This will increase payments beyond what PIP plans currently experience. Finally, claims adjusters handling homeowner’s insurance claims, with a bodily injury component, have had to grapple with being responsible for conditional payment management instead of leaving it to the claimant to handle. This has occurred out of fear of paying again to Medicare and/or double damages to Medicare Advantage Plans. As the study articulates, the pressure on costs will rise. The study does not even touch upon costs associated with changing over to ICD-10 codes, and the real fact that will later identify to Providers, many years down the road, a workers’ compensation medical only claim or PIP or other no-fault claim is possibly responsible for current treatment.
Franco Signor is invested in Medicare Secondary Payer compliance solutions that mitigate exposures for today and tomorrow. Our integrated MSP Compliance 360 programs makes certain that all of your data from Section 111, to conditional payment management to the preparation of Medicare Set Asides, are consistently applied. Accurate data reduces risk and clearing conditional payments (removing those pieces of treatment that are not related to the claim) removes unnecessary and unintended exposure. Call us today to help you improve your program.
To read the claims journal article, click this link: http://www.claimsjournal.com/news/national/2015/09/01/265476.htm
Roy A. Franco