CMS Re-Issues Provider Notice Regarding All Types of MSAs- Work Comp, Liability, and No-Fault; Progressive Insurance Settles Medicare Secondary Payer False Claims Act Action for $2 Million Dollars
Heather Sanderson
November 20, 2017

Liability Medicare Set-Asides (LMSAs) and No-Fault MSAs (NFMSAs) Update:

We recently issued a blog that CMS withdrew/rescinded a MedLearn article to medical providers which directed medical providers to bill a LMSA/NFMSA where a Medicare beneficiary has received a Medicare Set-Aside as part of a liability, no-fault or workers’ compensation settlement, judgment or award (instead of Medicare).  While the MedLearn article had a positive intent of explaining to medical providers the secondary nature of billing Medicare where a primary plan or MSA is available, it seemed to only blur the LMSA/NFMSA landscape for primary payers and the Medicare Trust Fund since CMS has not yet initiated guidelines or a review process for LMSAs/NFMSAs. The MARC Coalition was instrumental in having this document rescinded to remove this confusion.

To our surprise, it appears that on November 8th, CMS reissued this MedLearn article to clarify information. The MedLearn can be found here.  The revised MedLearn article now generally references Medicare Set-Asides (MSAs),  however the article does not limit the discussion to WCMSAs, even though a formal review process only exists for WCMSAs. The MedLearn article goes on further to let providers know that Medicare is always secondary to liability, no-fault and workers’ compensation insurance.

Further, on October 28, 2017 CMS issued another alert stating: The Centers for Medicare and Medicaid Services (CMS) continues to consider expanding its voluntary Medicare Set-Aside Arrangements (MSA) review process to include liability insurance (including self-insurance) and no-fault insurance MSA amounts. CMS will work closely with the stakeholder community to identify how best to implement this potential expansion of voluntary MSA reviews. Please continue to monitor this website for updates and announcements of town hall meetings in the near future.

Franco Signor Commentary: The Centers for Medicare and Medicaid Services (CMS) is clearly continuing to take incremental steps toward a formal voluntary LMSA/NFMSA review process. The Workers’ Compensation Review Contractor (WCRC) Request for Proposal (RFP) indicated that the WCRC may begin to review LMSAs and NFMSAs as early as July 1, 2018.

As we approach the end of 2017, LMSAs/NFMSAs will continue to be on the industry and CMS’ mind for 2018. The time is now to implement LMSA Best Practices. We can help.

Further, as CMS reaches out to the industry for feedback on the LMSA/NFMSA review process, we expect CMS to engage with the stakeholder community to ensure that such LMSA/NFMSA review process is reasonable, does not otherwise thwart the sound public policy in promoting settlements and does not unintentionally increase costs to the Medicare Trust Fund.

Progressive Insurance Settles Medicare Secondary Payer False Claims Act Action for $2 Million Dollars

Recall that we had issued a blog last year in March wherein False Claims Act litigation was filed against Progressive Insurance, wherein the whistleblower, a private citizen, asserted that Progressive was not checking Medicare and Medicaid status of its members prior to enrolling them in their health first automobile insurance policies. By not checking the Medicare and Medicaid status, Progressive was alleged to be violating the Medicare Secondary Payer Act by forcing Medicare and Medicaid to pay for items and services which should have been covered by standard no-fault policies. Our prior blog on this litigation can be found here.  

This litigation has now settled and Progressive Insurance will issue out a settlement payment of $2 million dollars. The whistleblower will receive $600,000. More information on the settlement can be found here.

Franco Signor Commentary: CMS has not implemented penalties for against (RREs) for noncompliance with MMSEA Section 111 reporting.  However, that did not stop the U.S. Attorney’s office from prosecuting an action on behalf of a whistleblower that exposed Progressive practices to purportedly avoid it’s Medicare Secondary Payer obligations.   NGHP primary plans must exercise care when in the continued implementation of the reporting law.  Failure to identify Medicare and Medicaid beneficiaries timely can lead to serious consequences as this case can be a testament to.

Until RREs can demonstrate that proactive steps are being taken to adhere to Medicare Secondary Payer regulations by ensuring Medicare remains a secondary payer, there is a potential for both an MSP Private Cause of Action for double damages, as well as a potential for False Claims Act actions for triple damages.

Private citizens, Medicare, and Medicare Advantage Plans and the like have recently increased the use of both the MSP Private Cause of Action and False Claims Act to not only enforce the MSP and protect the Trust Fund, but also to put extra dollars in their pockets. The whistleblower here, a private citizen that just pocketed $600,000 for calling out Progressive on its policies, will unfortunately only likely motivate others to do the same against other primary plans.

We recommend stringent Best Practices to protect against these exposures.