Workers' Compensation Claims and the Medicare Secondary Payer Act - - PowerPoint PPT Presentation

Workers' Compensation Claims and the Medicare Secondary Payer Act

Meeting Reporting Requirements, Satisfying Liens, and Establishing Set-Asides in Settlements

Today’s faculty features:

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TUESDAY, SEPTEMBER 10, 2013

Presenting a live 90-minute webinar with interactive Q&A

Bradford Peterson, Partner, Heyl Royster Voelker & Allen, Urbana, Ill. John Cattie, Head, Future Cost of Care Practice, Garretson Group, Charlotte, N.C.

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WORKERS’ COMPENSATION CLAIMS AND MSPA

Brad Peterson Heyl, Royster, Voelker & Allen Urbana, Illinois John V. Cattie, Jr. Garretson Resolution Group Charlotte, NC

CONTRACT LANGUAGE

• Acknowledge Medicare’s interest
• MSA amount
• MSA approved or to be approved
• Terms of self-administered MSA
• Open medical if MSA rejected

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CONTRACT LANGUAGE

• If no MSA explain why
• Record keeping requirements

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SETTLE NOW – NOT LATER

• Settle claim before petitioner reaches 62 ½

years of age

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SETTLE NOW – APPLY LATER

• Petitioner waits to file SSDI claim until after

settlement of workers’ compensation claim

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APPEAL DENIED

• Await settlement until pending SSDI appeal is

denied

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NO FUTURE TREATMENT – NO MSA

• MSA only where future treatment reasonably

anticipated

• Caveat: CMS Memo 4/22/03 ‘and settlement
• nly for past medical expense’

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ZERO ALLOCATION

• Acquire MSA proposal with zero allocation

based upon highly disputed facts and substantial compromise

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SETTLEMENT BELOW MSA THRESHOLDS

• Negotiate settlement below

$25,000/$250,000 thresholds to avoid time and expense of CMS approval

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LIABILITY MSA’S PROPOSED REGULATIONS

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PUBLISHED FEDERAL REGISTER VOLUME 77, NO. 166

Friday, June 15, 2012

• When enacted will codify CMS’s position

requiring liability Set-Asides

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MUST PROTECT MEDICARE FOR FUTURE MEDICAL EXPENSE, if

• Current Medicare beneficiary.
• or,
• Claimants who reasonably anticipate receiving

Medicare covered services for injury after settlement

• Seven options to protect Medicare
• Options 1 through 4 apply to all cases
• Options 5 through 7 apply only to current

Medicare beneficiaries

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OPTION 1

• Beneficiary chooses to pay all future medical

expense until settlement exhausted

• No annual accounting but periodic audits
• Medicare will begin covering injury related

expenses when settlement funds exhausted

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OPTION 2

• Medicare will not pursue future medicals if;

A.)

• Accident, illness or injury occurred 1 year or more

before settlement;

• Claim did not involve chronic illness or major

trauma;

• Claimant does not receive additional settlements

nor workers’ compensation or no fault insurance claim

• or,

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B.)

• Settlement less than defined amount (to be

determined)

• Claimant not current Medicare beneficiary
• Claimant does not expect to become beneficiary within

30 months

• Claim does not involve chronic illness or major trauma
• Beneficiary does not receive additional settlements
• Claimant does not have corresponding workers’

compensation or no fault insurance claim

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• What is chronic illness or major trauma?
• Serious injury to two or more ISS body regions
• or,
• ISS score greater than 15

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• BODY REGIONS:
• Head or neck, face, chest, abdomen,

extremities, external

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ISS = INJURY SEVERITY SCORE.

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CHRONIC ILLNESS

• Is a condition or disease lasting more than

three months.

• Examples: chronic breathing difficulty, cancer,

diabetes, quadriplegia and/or fibrosis.

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OPTION 3

• Before or after settlement, physician attests

that future medical expense not expected

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OPTION 4

• Medicare Set-Aside arrangement prepared

and submitted to CMS for review

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OPTION 5

RECOVERY OPTIONS:

• Settlement $300.00 or less;
• Settlement below $5,000.00 pay 25 percent to

Medicare;

• Settlement $25,000 or less claimant can self

calculate amount to protect Medicare for future medical expense

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OPTION 6

UPFRONT PAYMENT:

• Pay Medicare a lump sum payment to cover

calculated cost of future medical;

• Lump sum payment to Medicare in the

amount of a fixed percentage of settlement amount

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OPTION 7

COMPROMISE OR WAIVER:

• Beneficiary may request CMS compromise or

waive recovery

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DOUBT NO LONGER EXISTS AS TO MEDICARE’S POSITION!

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• PROPOSED REGULATIONS MAY BE

SUBSTANTIALLY ALTERED PRIOR TO ADOPTION

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REGULATIONS TO BE PUBLISHED SEPTEMBER 2013

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Bradford Peterson

Heyl Royster Voelker & Allen Urbana, Ill. 217.344.0060 bpeterson@heylroyster.com

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Ready for Adventure?

The SMART Act and Medicare Set Asides

September 10, 2013

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The SMART Act and Medicare Set Asides

John Cattie

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• Base Camp: Map the Path & Timeline to Resolution
• Climbing the Mountain: SMART Act Overview
• The Treacherous Descent: CMS WCMSA Reference Guide
• Take-Home Climbing Gear

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Base Camp: The Path & Timeline to Resolution

Date of Injury Date of Settlement Distribution of Proceeds

Case Intake/ Retainer Send Demand/ File Lawsuit Negotiations Receipt of Funds

Past Interest Future Interest MMSEA

Up to $1,000 Penalty

per day per claimant for non-compliance

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Additional Gear: The SMART Act

Signed into law by President Obama on January 10, 2013 Impacts 2 of the 3 Medicare Secondary Payer “MSP” components: Repayment & Reporting

“SMART” Act

Strengthening Medicare and Repaying Taxpayers Act

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Additional Gear: The SMART Act

• Intended to improve efficiencies of Medicare’s current

recovery process for conditional payments

• Rewards settling parties who take a proactive approach to

addressing Medicare’s recovery interests in the beginning stages of settlement

• Benefits to planning ahead:
• 1. Ability to make more informed pre-settlement decisions
• 2. Option of a fast-tracked process in identifying and resolving Medicare’s

recovery interests

• 3. Assurance that there will not be any post-settlement complications relating

to MSP conditional payment reimbursement obligations

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SMART Act: Section 201

• Requires the Centers for Medicare and Medicaid Services

(“CMS”) to maintain a secure web portal for settling parties to use as an “early warning system”

– Allows settling parties to notify CMS of an anticipated settlement, judgment, or other payment prior to settlement – You can then efficiently resolve any Medicare repayment claims using the website following a specific process and timeline

• Implementation Timeline: CMS will have 9 months (October

10, 2013) from the date of enactment to issue final regulations to carry out Section 201

– Process is likely to be phased in over a set period of time to allow for implementation changes

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SMART Act: Section 201

Important Note: to take advantage of the fast-tracked resolution process, notification to Medicare must occur within 120 days of settlement, and the entire process must be completed within that timeframe

Process required by Section 201:

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Provision Summary Implementation Timeline Section 202 Reimbursement & Reporting Thresholds

• Settlements/judgments/awards below

the annual threshold amount will not trigger reimbursement or Mandatory Insurer Reporting (“MIR”) obligations

• Does not apply to ingestion, exposure
• r implantation cases
• Applies to years beginning in

2014 thus, the Sec. of HHS has to issue a cap report on

• Nov. 15, 2014

Section 203 MMSEA Reporting Penalties

• The mandatory $1,000 per day penalty

is now a permissive one

• Effective once final

regulations are issued

Section 204 Use of SSNs, HICNs Optional

• Responsible Reporting Entities (RREs)

no longer required to gather or report SSNs or HICNs

• Section 111 rules to be

modified within 18 months of enactment by July 10, 2014, with one year extensions for patient privacy / MSP integrity reasons

Section 205 3 Year Statute of Limitations

• US must file a complaint within 3 years

following notice of a settlement/judgment/award provided as a result of MMSEA reporting

• Applies to all actions brought

and penalties sought on or after 6 months from date of enactment, which would be July 10, 2013

SMART Act: Additional Provisions

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Reaching the Summit?

5-Step Process to Ensure MSP Compliance:

1.

Settlement agreement contains language describing the MSP compliance process (i.e. representations and warranties).

2.

Plaintiff shares evidence that recovery record has been

• pened with Medicare (i.e., results of entitlement search).

3.

Defendant identifies whether and how to report under Section 111.

4.

Parties agree on manner of payment (i.e. holdback, buffer, payment routing).

5.

After final resolution with CMS, plaintiff provides proof of satisfaction back to defendant to document defendant’s file.

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• Certain amount of proceeds to satisfy MSP

statutory requirements

• Covers future injury-related care otherwise

covered by Medicare

• MSAs are a subset of the future medicals

award

• Think insurance deductible …

MSAs: The Basics

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MSAs : Statutory Obligation

According to MSP Act, payment … may not be made … with respect to any item or service to the extent that … payment has been made or can reasonably be expected to be made under a workers’ compensation plan, an automobile or liability insurance plan (including a self-insured plan)

• r under no fault insurance.

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MSAs: Workers’ Compensation Regulations

42 C.F.R. §411.46(d) Lump-sum compromise settlement: Effect on payment for services furnished after the date of settlement

1)Basic Rule. Medicare pays for future injury-related care. 2)Exception. If WC award contains dollars for future medicals,

that amount must be spent down and exhausted before Medicare pays

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MSAs: Workers’ Compensation Regulations

42 C.F.R. §411.47(a) Determining amount of compromise settlement considered as a payment for medical expenses. 1) “If a compromise settlement allocates a portion of the payment for medical expenses and also gives reasonable recognition to the income replacement element, that apportionment may be accepted as a basis for determining Medicare payments.”

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MSP Case Law : Apportionment for Medicals

Benson v. Sebelius, 2011 U.S. Dist. LEXIS 30438 Decided March 24, 2011 “…if a settlement covers both medical and nonmedical costs, CMS’s reimbursement may be apportioned so as to reach only the portion of the settlement allocated to cover medical costs.”

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CMS WCMSA Reference Guide

• Released March 29, 2013
• Consolidates all previous guidance in 88 page guide
• Clarifies certain misconceptions

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CMS says the following about WCMSAs:

§1.0 – About This Reference Guide

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§2.1 – Medicare as Secondary Payer §2.2 – Reporting a WC Case §2.3 – Past and Future Medical Services

CMS distinguishes between “conditional payments” for past medicals and “future medical services” §2.0 – Introduction to Workers’ Comp and Medicare

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CMS says the following about WCMSAs:

§3.0 – What are WCMSAs?

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§4.1 – Considerations and Guidelines

§4.1.1 – Commutation and Compromise §4.1.2 – Outstanding WC Claims

§4.2 – When Establishing a WCMSA is Not Necessary

§4.0 – Should I Consider Submitting A WCMSA Proposal?

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§5.1 – Lump-Sum WCMSAs §5.2 – Structured WCMSAs

§5.0 – WCMSAs Can Be Funded in Two Ways

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§6.0 – Who Can Help with the WCMSA Process?

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§7.0 – How is CMS Approval of a WCMSA Amount Obtained?

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§8.0 – Should CMS Review a WCMSA?

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§8.1 – Thresholds

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§10.0 – Information Needed for WCMSA Submission

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§10.1.2 – Section 10 – Consent to Release Form

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§10.1.5 – Section 25 – Settlement Agreement or Proposed or Court Order

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§11.1 – Electronic Submission Via the WCMSAP

§11.1.1 – Benefits of Using the WCMSAP

§11.2 – Paper Copy/CD Submission Via the Mail

§11.2.1 – Paper Copy §11.2.2 – CD §11.0 – How Do I Submit a WCMSA?

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§12.0 – What Happens after a WCMSA Has Been Submitted?

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§13.0 Sample Submission

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§14.0 Tips for Improving Your WCMSA Review Process

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§16.0 Re-Review

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§18.0 CMS’ Monitoring

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CMS WCMSA Reference Guide: Myth 1

Submitting MSA proposals to CMS for review/approval is voluntary, not mandatory. Section 1.0, page 1, WCMSA Reference Guide v1.3

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CMS WCMSA Reference Guide: Myth 2

MSAs are a Plaintiff Concern, not a Defense Concern Section 3.0, page 3, WCMSA Reference Guide v1.3

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MSA Reaction - American Insurance Association

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MSAs: Ethical Concerns for Plaintiff Attorneys

Plaintiff Attorneys Must Adhere to …

• Rule 1.1 Competence
• Rule 1.3 Diligence
• Rule 1.4 Communication
• Rule 1.15 Safekeeping Client Property

With clear guidance from CMS, noncompliance is not an option.

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Practical MSA Compliance Tips 3 things to start doing today to ensure compliance:

1.Honest Internal Discussion Re: Policy/Procedure on Future Meds

• Formalized Approach Yields Compliant Results

2.Update Case Intake to Capture Relevant Data

• Medicare Enrollment Status (SSDI, Age, ESRD)

3.Seek Help (as needed)

• Build It or Buy It

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MSA Decision Engine: A New Allocation Tool

MSA Decision Engine – Web based “self-service” technology – 24/7 accessibility – GRG’s formalized approach at your fingertips – Ensure Medicare’s future interest is appropriately considered – Free pre-screening checklist – Develops:

• Claimant profile
• Claims/injury profile
• Healthcare profile
• Litigation profile

– Is MSA appropriate based on case specific facts?

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MSA Decision Engine: How to Use

1.

Run Prescreener Within One Week of Case Intake

2.

If “no MSA needed” decision rendered, download free report for file

3.

If “MSA might be needed” decision rendered, step away.

4.

30 days from mediation, reenter, answer additional questions and generate results – charge incurred

5.

At mediation, rerun report (for free) based

• n changed data

6.

Once settlement is final, rerun report (for free) once more and keep in file going forward.

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Additional Resources: GRG Learning & Resource Center

Downloadable client alerts, practice tips, whitepapers, guides, publications and additional resources

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Questions?

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Conclusion

Thank you!

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