CMS Publishes Final Rule on Section 111 Civil Monetary Penalties

By on October 11, 2023

On October 11, 2023, the Federal Register published the long-awaited Final Rule regarding Section 111 Civil Monetary Penalties.  This rule has an effective date of December 11, 2023, and an applicability date on or after October 11, 2024.

The Rule’s salient points can be summarized as follows, with key differences between the requirements for group health plans (GHP) and non-group health plans (NGHP).

Method of Penalty Assessment:  CMS will audit a possible 1000 records per calendar year across all RRE submissions (250 beneficiary records per quarter) and will evaluate a proportionate number of GHP and NGHP records.  At the end of each calendar quarter, CMS will randomly select the indicated number of records and analyze each to determine if it is in compliance with reporting requirements.

Grounds for Penalty:  The final rule removes any basis other than timeliness from the penalties considered in the proposed rule.  All references to “contradictory reporting” and “exceeding error tolerance” have been removed; timeliness is the sole basis for CMP per the Final Rule.

What is timeliness?  Timely is defined as reporting to CMS within one year of

  • the date GHP coverage became effective;
  • the date a settlement, judgment, award, or other payment determination was made (or the funding of a settlement, judgment, award, or other payment, if delayed); OR
  • the date when an entity’s ORM (ongoing responsibility for medicals) became effective

Penalties for GHP: For any selected record that is more than 1 year (365) calendar days late, a penalty of $1,000 per day as adjusted of noncompliance will be imposed

Penalties for NGHP:  For any audited record where the NGHP RRE submitted the information more than one year after the date of settlement, judgment/award, or other payment (including the effective date of the assumption of ORM), the penalty will be:

  • $250  as adjusted annually under 45 CFR part 102 for each calendar day of noncompliance where the record was reported on year or more but less than two years after the required reporting date
  • $500 for each calendar day of noncompliance where the record was reported two years or more but less than three years after the required reporting date
  • $1,000 for each calendar day of noncompliance where the record was reported three years or more after the required reporting date

Penalty Calculation Method:  CMS will multiply the number of audited records found to be noncompliant by the number of days that each record was late (in excess of 365 days).  That product will be multiplied by the appropriate penalty amount.

Penalty Cap: Total penalty for any one instance of noncompliance for a given record will be no greater than $365

Inflation: Penalties may be adjusted for inflation.

Penalty exceptions for GHP: Penalties will not be assessed for GHP in the following instances

  • Where noncompliance is associated with a specific reporting policy or procedural change on the part of CMS that has been in effect for less than 6 months following the implementation of the policy change (or for a year, should CMS be unable to provide a minimum of 6 months’ notice prior to implementing change)
  • The entity complies with any reporting thresholds or other reporting exclusions

Penalty exceptions for NGHP: The GHP exceptions are applicable for NGHP with the following addition

  • Where an NGHP fails to report required information as a result of the plan’s inability to obtain the individual’s first or last name, date of birth, gender, Medicare beneficiary number (MBI), SSN, or last five digits of the SSN and the plan has made good faith effort to obtain this info as follows:
  • The plan has communicated the need for the info to the individual and his or her attorney or other representative, if applicable, or both
  • The plan has requested the info from the individual and his/her attorney/other representative at least 3 times (once in writing, including email; at least once more by mail; at least once more by phone or other means)
  • The plan has not received a response or has received a response clearly indicating the individual refuses to provide the needed info
  • The plan has documented its efforts to obtain the info.  This documentation, including written rejection correspondence, must be retained for a minimum of 5 years

Relief:   CMPs imposed in accordance with the final rule are subject to a formal appeals process.  Parties subject to CMPs will receive formal written notice at the time the penalty is proposed and may request a hearing with an ALJ within sixty (60) calendar days of receipt.  An ALJ decision may be appealed to the Departmental Appeals Board (DAB) within 30 days, with DAB decision binding sixty (60) days thereafter absent petition for judicial review.

Given the audit structure, the rule specifies that smaller entities are much less likely to have their records audited.  The rule also confirms that it imposes no new information collection requirements—e.g. reporting, record-keeping or third-party disclosure requirements.  We anticipate that CMS will host webinars and town halls in the future to discuss the new rule and will keep abreast of same.

Disclaimer: Please note, this article is intended to be a high-level summary of the proposed regulation and is not intended to be an exhaustive review of every detail and requirement contained within the text of the proposed regulation. We will be providing updates as the program unrolls from CMS.

Given the timeframes of the rule, RREs have time to ensure that their reporting is compliant.  Let us know if you want to schedule a meeting to discuss how your program can ensure compliance with the formal rule.

Please feel free to reach out to one of our team members:

Travis Smith – twsmith@grsm.com

Kimberly Young – kyoung@grsm.com

Melanie Schafer – mschafer@grsm.com

Rachel Maldonado – rmaldonado@grsm.com

Heather Eversole – heversole@grsm.com

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Civil Monetary Penalties draft rule published! We will keep you posted on developing events!

By on October 10, 2023

ALERT  

Medicare Secondary Payer and Certain Civil Money Penalties:
Notice of Final Rule

Summary

CMS has finalized its rule specifying how and when CMS will calculate and impose civil money penalties (CMPs) when group health plan (GHP) and non-group health plan (NGHP) responsible reporting entities (RREs) fail to meet their Medicare Secondary Payer (MSP) reporting obligations. The text of the final rule can be found and reviewed in its entirety in the Federal Register, which can be found at https://www.federalregister.gov.

Effective Dates

Please note that this rule is effective as of 60 days following the date of publication (December 11, 2023), but is only applicable one year after publication (October 10, 2024). RREs are expected to be compliant with their Section 111 Mandatory Insurer Reporting requirements no later than October 10, 2024, or they may be eligible for a CMP.

Additional Information

RREs should review the published rule and take time to evaluate their reporting processes to ensure the RRE is compliant with all reporting requirements before the rule goes into effect. If RREs have any questions or concerns about their reporting, they should contact their EDI representative.

We know that CMPs are of great interest to RREs, and CMS is in the process of developing and publishing additional written guidance related to CMPs. Questions should be directed to the new CMS Section 111 Civil Money Penalties mailbox at Sec111CMP@cms.hhs.gov. Please be aware that responses should not be anticipated at this time; CMS will use these questions and comments to help inform outreach and educational materials (including webinar presentations). RREs should continue to monitor the Mandatory Insurer Reporting pages on CMS.gov where additional guidance and updates, including information about CMP-related webinars, will be posted.

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Workers’ Compensation Medicare Set-Aside Reference Guide Update, Summer 2023

By on May 15, 2023

On May 15, 2023, the Centers for Medicare and Medicaid Services (CMS) released an updated Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide, found here: WCMSA Reference Guide v3.9, May 15, 2023 (off-release).  The changes included in this version of the guide are as follows:

  • Letters signed with CMS’ Director of Financial Services Group name and signature image have been updated with current contact information
  • CMS Regional Offices are no longer responsible for approving initial determinations.  MSAs are first reviewed for completeness through a computerized system—when and only when a full package of evidence is received by the agency will the file be forwarded to the WCRC for review
  • Clarification has been provided regarding intrathecal pump, SCS, and PNS replacement
  • The maximum time limit for eligibility has been removed from the Amended Review process
  • Zip code 94585 has been added to the major medical center appendix
  • The CDC Life Table link was updated

Of note, CMS has lifted the six (6) year limit on Amended Review—meaning legacy claims with previous approvals too old formerly for reconsideration may now be eligible for reduction, assuming the other parameters of the program are met.  This may allow for complete closure of open claims, with additional potential to reduce conditional payment obligations by facilitating final, legal closure of medical and thereby tolling the statue of limitations on conditional payments.

Additionally, CMS has clarified the replacement frequency for IT pumps, SCS, and PNS units.  The new calculation will consider the unit’s implantation date and will presume implantation within the year for units not yet implanted. The number of replacements is calculated by subtracting the number of years since implantation (using 1 if the unit has not been implanted) and dividing the remaining life expectancy by the implantation frequency.  If the unit has not yet been implanted, the allocation would need to include an initial placement at year one and the number of replacements warranted by the new formula.

For instance, pain pumps have a replacement frequency of seven (7) years.  Assuming a 22 year life expectancy, CMS would calculate the frequency of replacements as follows:

  • If the unit has not been implanted, CMS will include the initial placement plus 3 replacements (e.g. Initial replacement + ((22-1)/7), for a total of four (4) units
  • If the unit was implanted three years prior to submission, CMS will exclude an initial placement as it has already been done and calculate the number of replacements as follows: ((22-4)/7), or 2 replacements.

Where no unit has yet been placed, this can (but will not always) result in a greater funding obligation than previous.

  • E.g. previously, the calculation for total number of units was the life expectancy divided by the funding frequency, which would have resulted in only three (3) pumps in the above scenario.

Of additional note, CMS has clarified that revisions for spinal cord stimulators involve only the lead implantation up to the number of leads related to the associated code; revision surgeries should be used only where a historical pattern of a need to relocate leads exists.  By its plain language, this provision suggests that revision SCS should be less expensive than previous, though it remains to be seen whether or not CMS will continue to include revision laminectomy coding in its SCS revision pricing decisions.

CMS has retained the distinction between rechargeable and non-rechargeable SCS units, with additional distinction for the number of leads.  If the nature of the SCS is unknown, CMS will default to a non-rechargeable, single-lead system, despite rechargeable units being the medical standard of care.  CMS has also allowed for inpatient vs outpatient pricing on SCS units and has reiterated its long-standing policy of reviewing itemized pricing proposals when issuing its opinion of value.

The Gordon and Rees Medicare Group will continue to follow this issue closely and will update you as soon as additional information is available.

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Commercial Repayment Center Address Change – Effective March 15, 2023

By on March 3, 2023

We want to provide you with an update we have recently received in relation to an address change for the Commercial Repayment Center (NGHP). As of March 15, 2023, the new address to send correspondence as well as payments is as follows:

Medicare Commercial Repayment Center – NGHP
P.O. Box 1610
Lathrop, CA 95330

We advise that you please update your records accordingly to be sure correspondence and maybe more importantly, payments are being sent to the correct address. As previously, please be sure when you remit correspondence and/or payment, include the CRC Case ID to which you are referring.

The CRC has asked that nothing be sent to the updated address until March 15, 2023; however as of that date, please be sure to utilize the above address.

Should you have any questions in relation to this update, please do not hesitate to contact us. We are here as your partner to assist in all of your Medicare Compliance issues.

Thank you!
Gordon & Rees Scully Mansukhani Medicare Compliance Department

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Workers’ Compensation Medicare Set-Aside Reference Guide Issued for Spring

By on April 27, 2021
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Today CMS issued an announcement that they have released Version 3.3 of the Workers’ Compensation Medicare Set-Aside Arrangement Reference Guide (Reference Guide), which can be found here.  Per the new version, the changes included in this version of the guide are as follows:

  • The CDC Life Table link was updated (Section 10.3).
  • Language around surgeries to be covered by seed money in a structured settlement was clarified, and a disclaimer was added to the proposal review reference tools list in Appendix 4, along with the Conduent Strataware® tool (Sections 5.2 and 9.4.4,
  • Appendix 4).
  • Miscellaneous clarifications were added as follows (Sections 9.4.5, 10.2, 16.2, and 19.4):
    • On pricing: include refills when pricing intrathecal pumps.
    • On documentation: clarification was added on Consent to Release signatures.
    • On WCMSA Portal case access: clarification was added on case access for Professional Administrators who are not the original submitter.
  • The Major Medical Centers table was updated for a Missouri entry (Appendix 7).

The most noteworthy changes are those in regards to the seed money in a structured settlement, pricing regarding intrathecal pain pumps, allowance of an electric signature for consent to releases, and access to the portal for non-original submitters.

In regards to the seed money, CMS specifically included in this version that “In a structured WCMSA, an initial deposit is required to cover the first surgery or procedure for each body part, and/or replacement and the first two years of annual payments.” Furthermore, CMS goes on to note that “The seed includes the cost of the first surgery/procedure for each body part, including all costs such as prescription drugs, physician fees, anesthesia fees, and facility fees. If the surgery is preceded by an associated trial, i.e., trial SCS or trial intrathecal (IT) pump, the cost of the trial is also included since it is considered part of the same procedure. If there are no surgeries, the first procedure (if any, such as injections) is included. Series of spinal injections are not included, but series of knee viscosupplementation are included if three are anticipated to be accomplished as a series of three weekly injections.”

This differs from the current standards as in the past the most expensive procedure is what is utilized for the seed money. However, this seems to differ in that if there are procedures for several different body parts, all of those must be included in the seed amount and if said procedures include atrial and/or are administered in a series (i.e. specifically viscosupplementation injections which are traditionally given in a series of three) are to be included in the seed as well. This is interesting as annuities are commonly utilized to reduce the cost of MSAs will be less effective if larger seed amounts are required.

Additionally, CMS has expressly indicated that “Pricing includes necessary pump refills over the claimant’s life expectancy.”

In a change to enable easier submission of Consent to Releases, CMS has announced that they will now accept electronic signatures. As many may recall, the difficulty in getting a hand signature from Claimants with inadequate technology was a struggle, especially during the past year. However, in a loosening of requirements, CMS will now allow for individuals to sign via computer/electronic signature.

Finally, in regards to vendors that have taken over a submission and are not the original submitter of record, CMS has indicated “If there is a change in submitters, CMS requires a written release from services by the original submitter and a new signed Consent to Release form authorizing the new submitter. Both must be provided in order to continue the WCMSA review process. Professional Administrators whose EIN does not match the EIN of the original submitter, contact BCRC to gain access to the case via the WCMSA Portal; otherwise you must submit by mail. Submitter changes will not be accepted after settlement, and does not constitute a reason for a re-review (See Section 16.0 for re-review requirements). CMS will not provide copies of existing documentation to the new submitter. Any documentation must be obtained from the incumbent submitter or insurer.

CMS has previously required a signed withdrawal/release from the previous vendor and new authorization for the new submitter to go forward. However, CMS has interestingly now expressly stated that a change of submitter post settlement is not allowable and will not be a reason for re-review. Additionally, CMS has also indicated that it will not provide any copies of existing documentation to the new submitter. While this has been CMS’s historical practice, CMS has now expressly warned new submitters with this updated language.

The Gordon and Rees Medicare group will continue to follow this issue closely and will update you as soon as additional information is available.

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Are Liability and No-Fault MSAs finally here?

By on July 7, 2022
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CMS recently published a proposed rule regarding liability insurance and the future medicals associated with such cases.  Per the proposed rule:

This proposed rule would clarify existing Medicare Secondary Payer (MSP) obligations associated with future medical items services related to liability insurance (including self-insurance), no fault insurance, and worker’s compensation settlements, judgments, awards, or other payments. This proposed rule would also remove obsolete regulations.

This proposed rule will also give “Economically Significant” Priority which, per the Office of Information and Regulatory Affairs means:

These regulatory actions are a subset of those designated by OIRA as significant. A regulatory action is determined to be “economically significant” if OIRA determines that it is likely to have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.

What this information means for those who work in the world of liability and compliance is that the government is potentially making way for submission of liability and no-fault MSAs in the upcoming year. However, how this program will be implemented and address several legal and practical issues is unclear. This has been a recurring question when liability and no fault MSAs are discussed as many of these claims are governed by state laws which dictate future medical awards and coverage.

The Gordon and Rees Medicare Group will continue to follow this issue closely and will update you as soon as additional information is available.

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Civil Monetary Penalty Proposed Regulations Are Here

By on February 14, 2020
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The Medicare Secondary Payer law rendering a potential $1,000 per day penalty for noncompliance against primary payers has finally been demystified to some extent. The proposed regulation issuing guidance about Medicare Secondary Payer Civil Monetary Penalties relative to Section 111 reporting was unofficially disseminated on February 13, 2020, and the full text can be found here. The official document is scheduled to be published in the Federal Register on 2/18/2020 and available online at https://federalregister.gov/d/2020-03069.

By way of history, this rule has been in progress since 2013, pursuant to the Strengthening Medicare and Repaying Taxpayers Act (SMART Act) of 2012, which amended the Medicare, Medicaid and SCHIP Extension Act of 2007. The 2007 law rocked the industry by calling for mandatory penalties against NGHP primary payers of $1,000 per day per claimant for failure to properly report Section 111 data to Medicare. The SMART Act softened this, making the penalty discretionary rather than mandatory. The details of what would constitute a full penalty, diminished penalty and/or safe harbor from Civil Monetary Penalties have not been promulgated by the Agency until now. As of this date, no penalties have been assessed against NGHP primary payers. Having a rule in place could change this.

With 44 pages in all, there is a great deal of content within the proposed rule, the highlights of which are summarized below. As always, the Gordon & Rees Medicare Compliance Group will issue an Official Comment to this proposed rule. We will accept client feedback regarding this rule, through April 15, 2020, as Official Comments which must be received no later than 60 days from the date of official publication.

If more information is needed and/or you have questions about how this may impact your business please contact us at Section111 Reporting Section111Reporting@grsm.com.

Highlights:

• The regulation outlines proposed specific criteria for when CMPs would not be imposed, in circumstances when a NGHP entity fails to comply (either on its own or through a reporting agent) with Section 111 reporting guidelines.
• CMPs will be levied in addition to any MSP conditional payment reimbursement obligations.
• The rule is prospective and CMS will evaluate compliance based only upon files submitted by the RRE on or after the effective date of the final rule.
• There will be a formal appeal process for RREs if they disagree with the CMPs assessed against them.

CMS generally identified three categories of CMPs:

  • Failure to report
  • Submitting responses to recovery efforts contradicting reporting
  • Submitting records with errors that exceed CMS’s error tolerance threshold
    Statute of Limitations:
  • CMS may only impose a CMP within 5 years from the date when the non-compliance was identified by CMS. The regulation outlines specifically how this will be calculated for each of the three proposed types of CMPs.
    • If an RRE fails to report within the required timeframe (no more than 1 year from the TPOC date), the penalty would be calculated on a daily basis, based on the actual number of individual beneficiaries’ records that the entity submitted untimely.
    TPOC Reporting:
  • Penalty would be up to $1,000 (as adjusted annually for inflation based on 42 CFR part 102) for each calendar day of noncompliance for each individual, as counted from the day after the last day of the RRE’s assigned reporting window where the information should have been submitted, through the day that CMS received the information, up to a maximum penalty of $365K per individual per year.
    ORM Reporting:
  • If an RRE fails to report an ORM termination date, the penalty would be calculated based on the number of calendar days that the entity failed to report updates to the record. The penalty would be up to $1,000 (as adjusted annually for inflation) per calendar day of noncompliance for each individual, for a max annual penalty of $365K per year.
  • Please note, while most of the penalties listed are prospective, the ORM termination reporting is retroactive if not terminated properly.
    CMPs Will be Imposed for the Following Errors:
  • If the RRE exceeds any error tolerance(s) threshold in any 4 out of 8 consecutive reporting periods.
  • The initial and maximum error tolerance threshold would be 20% (representing errors that prevent 20% or more of the beneficiary records from being processed).
  • CMS intends for this tolerance to be applied as an absolute percentage of the records submitted in a given reporting cycle.
  • CMS will maintain current notification process where RREs receive notice via response file and direct outreach (email and, in more serious cases, telephone calls) when there are errors with their file submissions.
  • An RRE is out of compliance for the entire reporting period when the RRE exceeds the error tolerance threshold. (90 calendar days equals one reporting quarter)
  • CMS is proposing a maximum 20 percent per file submission error tolerance. The errors that would be used to determine whether the error tolerance is met shall be defined by CMS 6 months prior to imposition of any CMPs.
  • CMPs would be imposed on a tiered approach if the RRE exceeded the error tolerance(s) in the entity’s fourth above-tolerance submission. Penalties and calculation percentages are outlined in detail within the regulation; however, we have included the chart below directly from the regulation that summarizes the tiered penalty approach CMS is proposing. For a more detailed discussion of this, please reference the proposed regulation itself.
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• No CMP will be imposed in the following circumstances where all applicable conditions are met:

  1. If you report a claim timely; and
  2. Comply with TPOC reporting thresholds and any other reporting exclusions; and
  3. Don’t exceed any error tolerances in any 4 out of 8 consecutive reporting periods; and
  4. If the RRE fails to report required information because they were unable to obtain the necessary information from the beneficiary following a good faith effort to obtain this information which is defined in the regulation as communicating the need for the information twice by mail and at least once by phone or electronic communication. The RRE should maintain these records for a period of 5 years.

Disclaimer: Please note, this article is intended to be a high-level summary of the proposed regulation and is not intended to be an exhaustive review of every detail and requirement contained within the text of the proposed regulation. We will be providing a Webinar Series to discuss the fine details, business implications and best practices surrounding Section 111 Mandatory Insurer Reporting for NGHPs.

Let us know if you want to schedule a meeting to discuss in detail how this rule impacts your business.

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How does CMS interpret the three-year Statute of Limitations?

By on January 16, 2020
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On Tuesday, January 14, 2020, the CRC had a Town Hall conference in relation to NGHP recovery. The big news coming out of today’s question and answer segment was how does the three-year statute of limitations apply to recovery efforts by the CRC and BCRC?

According to Tuesday’s Town Hall, it does not apply to CMS contractors recovering on their behalf as this recovery is considered an “administrative” task. CMS’s interpretation of the statute is that the three-year statute of limitations only applies to legal actions brought by CMS (i.e. CMS pursing double damages). Operating under this interpretation of the statute, the CRC and/or BCRC can recovery conditional payments indefinitely.

This is drastically different from the previous stance, as arguments based upon statute of limitations was historically accepted by CMS. Under this interpretation, the CRC or BCRC could potentially attempt to collect on claims that have been closed for more than three (3) years. From a practice standpoint, this could be especially frustrating as Claimants no longer have an incentive to cooperate in the process.

The other aspects of Tuesday’s call revolved around Pre-CPN worksheets and Open Debt reports. While this information is highly beneficial to Responsible Reporting Entities (RREs) the access to these reports is still only available to an RRE’s MSPRP Account Manager. Therefore, one must be the RRE on file in order to access this specific information. To date, this information is not even available to the RRE’s assigned Recovery Agent. Thus, in order for an RRE to obtain this information, you will need to have an account on the MSPRP.

It appears while bringing the portal up to the technologic times, CMS is still restricting access to much of the beneficial information the portal offers and is requiring strict standards in accessing this data.

Another point of interest is what CMS didn’t say about penalties regarding Section 111 reporting. Although it has continually been hinted at being implemented, CMS did not discuss this topic at the Town Hall Meeting. This, however, does not mean that they may not make an announcement in the near future about this issue.

The slides and transcript from Tuesday’s Town Hall should be posted on the CMS website within a few weeks for those that would like to see the entirety of the presentation.

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Long Awaited Regulations Pushed Back, Again

By on November 22, 2019
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Rulemaking for Civil Monetary Penalties and regulations believed to promulgate formality to Liability and No-Fault Medicare Set-Asides has been pushed back to December 2019 and February 2020, respectively.

Rules clarifying when and how penalties may be issued for Section 111 Medicare Mandatory Insurer Reporting noncompliance could possibly be issued by year’s end. The industry has been anticipating this rule since the initial $1,000 per day per claim penalty was softened into a discretionary penalty per the SMART Act of 2012, enacted in 2013. The updated notice can be viewed here.

Rulemaking for an LMSA or NFMSA policy no longer appears to be imminent. The last date published was October of 2019, which is now delayed another three months, at least. CMS approached such policymaking in 2012, redacting it in 2014 only to revisit it again in 2016. The industry remains in a holding pattern, which will continue through the first several months of 2020, if not longer. https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201910&RIN=0938-AT85

The Office of Information and Regulatory Affairs’ (OIRA) Office of Management and Budget (OMB) page shows some changes to the Miscellaneous Medicare Secondary Payer Clarifications and Updates proposed rule. Of note is the priority for this rule, which has been shifted from Economically Significant to Other Significant.

According to the OIRA/OMB Frequently Asked Questions, page, a proposed rule that is Economically Significant can be defined as follows:

“A regulatory action is determined to be “economically significant” if OIRA determines that it is likely to have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. For all “economically significant” regulations, the Executive Order directs agencies to provide (among other things) a more detailed assessment of the likely benefits and costs of the regulatory action, including a quantification of those effects, as well as a similar analysis of potentially effective and reasonably feasible alternatives.”

The term “Significant” is also defined on the OIRA page, and it can be distinguished from Economically Significant status as the proposed rule could:

  • Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
  • Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or
  • Raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in this Executive order.

The OIRA page further distinguishes “Significant” status as follows:

The Executive Order requires that significant regulatory actions be reviewed by OIRA before they are published in the Federal Register or otherwise issued to the public. The Executive Order also requires agencies to provide an explanation of the need for the regulatory action and an assessment of potential costs and benefits. OIRA generally designates between 500-700 regulatory actions as significant each year.

Of interest is the bit about the proposed rule raising novel legal or policy issues arising out of legal mandates. Of further interest is the removal of some of the abstract language on the OIRA agenda page, which removes the following part of the rule’s description,

“Currently, Medicare does not provide its beneficiaries with guidance to help them make choices regarding their future medical care expenses when they receive automobile and liability insurance (including self-insurance), no fault insurance, and workers’ compensation settlements, judgments, awards, or payments, and need to satisfy their Medicare Secondary Payer (MSP) obligations.”

This leaves only the following description of the rule in the Abstract: “This proposed rule would ensure that beneficiaries are making the best healthcare choices possible by providing them and their representatives with the opportunity to select an option for meeting future medical obligations that fits their individual circumstances, while also protecting the Medicare Trust Fund.” Essentially, Medicare is no longer indicating that the Beneficiaries do not have guidance about future medical. This could possibly correlate to the prior Medicare Learning Network publications the Agency had disseminated to medical providers, suppliers and facilities. These publications suggested that Medicare Beneficiaries could be billed directly for services if Section 111 reporting was filed, demonstrating a primary payment plan’s availability, with Medicare as a Secondary Payer. The removal of language that there has been no guidance by Medicare could indicate positioning for greater accountability about Medicare Set-Aside usage. This is consistent with recent changes in the Workers’ Compensation Medicare Set-Aside Reference Guide (WCMSA) Version 3.0, which requires a Beneficiary’s acknowledgement of MSA content, intent, submission processes and associated administration within the Consent Form, as of April 1, 2020. See our article on this here.

What has not changed in the Abstract is Medicare’s suggestion that any proposed rule will be voluntary in nature, although the change to “Significant” status broaches the possibility that there could be a policy concern or legal mandate involved.

GRSM’s Medicare Compliance Group will continue to monitor the status of any forthcoming rulemaking.

Filed under CMS, Legislation, Medicare, Medicare Secondary Payer, Medicare Set Aside

WCMSA REFERENCE GUIDE 3.0 EMPHASIZES ADMINISTRATION

By on October 30, 2019
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Several changes regarding administration details have been made in Version 3.0. The biggest changes include new Consent Form language for WCMSA submissions requiring the Beneficiary acknowledge his or her understanding of administration, references to Medicare Part D coverage guidelines for Frequently Abused Drugs, and a link for professional administrators to upload account transactions and view account details. Also, among these significant changes are the extension of Amended Review timeframes and hospital fee clarifications.

It must be the end of October, as the Medicare Secondary Payer industry is seeing new program changes, with plenty more in sight. Today the Centers for Medicare and Medicaid Services disseminated the updated Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide version 3.0, dated October 10, 2019. The 3.0 Reference Guide is geared toward greater emphasis on Medicare Set-Aside administration, from several different fronts. Proper administration of CMS-approved Medicare Set-Asides ensures the preservation of post-account exhaustion Medicare entitlements. So is this emphasis on administration a warning signal of Medicare benefit jeopardization and/or increased vigilance in monitoring accounts on Medicare’s part?

CONSENT FORMS

In Section 10.2, Consent to Release Note, Version 3.0 adds the following language:

“As of April 1, 2020, all consent-to-release notes must include language indicating that the beneficiary reviewed the submission package and understands the WCMSA intent, submission process, and associated administration. This section of the consent form must include at least the beneficiary’s initials to indicate their validation.”

It has been independently confirmed by CMS that current Consent Forms do not require this content prior to April 1, 2020. Figure 10-2: Example Consent to Release with Instructions, illustrates the location of the initial line and provides the necessary language to pass muster with CMS. Such language brings to mind the Medicare Learning Network literature of the last several years, which directed medical providers, suppliers and facilities to direct bill Beneficiaries with Medicare Set-Aside accounts, so that Medicare would not be billed when a case reached settlement, judgment, award or other payment. Including this new language in the Consent Form documents the Beneficiary’s awareness of, and agreement with, a Medicare Set-Aside and its content, as well as the intent, process and administration of an MSA, all prior to submission. While Beneficiaries and their attorneys have always had access to the contents of a submitted Medicare Set-Aside and supporting documentation, this adds a new layer of accountability for the Beneficiary in the Medicare Set-Aside process.

FREQUENTLY ABUSED DRUGS

Version 3.0 includes a new provision in Section 17.1 Administrators, which explains account administration. New language states, “CMS highly recommends professional administration where a claimant is taking controlled substances that CMS determines are ‘frequently abused drugs’ according to CMS’ Part D Drug Utilization Review (DUR) policy. That policy and supporting information are available on the web at:
https://cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/RxUtilization.html

Further, Section 17.3 Use of the Account, also includes new language reinforcing the latter provision: “CMS expects that WCMSA funds be competently administered in accordance with all Medicare coverage guidelines, including but not limited to CMS’ Part D Drug Utilization Review (DUR) policy. As a result, all WCMSA administration programs should institute Drug Management Programs (DMPs) (as described at: https://www.gpo.gov/fdsys/pkg/FR-2018-04-16/pdf/2018-07179.pdf) for claimants at risk for abuse or misuse of ‘frequently abused drugs’.”

This aspect of the Reference Guide reflects Medicare’s new prescription drug policy that had started January 1, 2019 in which Part D plan sponsors could adopt drug management programs concerning beneficiary use of frequently abused drugs in an effort to combat opioid overuse as per the Comprehensive Addiction and Recovery Act (CARA).

ADMINISTRATION LINKS

In Version 2.9, Beneficiaries could review all documents submitted to CMS via http://www.mymedicare.gov. A physical address for also existed for beneficiaries or their representatives to mail exhaustion documentation. Version 3.0 maintains this option in item 17.7, but adds to Section 17.6 Electronic Attestation, options for electronic submissions of annual and final attestations, usable for either self-administered or professionally administered accounts respectively:

For more information about how to submit an attestation electronically, please see the WCMSAP User Guide, at https://www.cob.cms.hhs.gov/WCMSA/assets/wcmsa/userManual/WCMSAUserManual.pdf.

For more information on Professional Administrator accounts, please see the WCMSAP User Guide, at https://www.cob.cms.hhs.gov/WCMSA/assets/wcmsa/userManual/WCMSAUserManual.pdf.

The new links come on the heels of other CMS efforts concerning MSA account administration. On October 17, 2019, disseminated CMS updated its Self-Administration Toolkit for WCMSAs to Version 1.3, dated October 10, 2019, the same date as Version 3.0 of the WCMSA Reference Guide. The Toolkit Version 1.3 can be found here: https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/Downloads/Self-Administration-Toolkit-for-WCMSAs-Version-1_3.pdf

Additionally, Medicare disseminated information about two new webinars focused on WCMSA Electronic Attestation Enhancements. The first was to be held today for Medicare Beneficiaries and their representatives. https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/Downloads/WCMSA-Electronic-Attestation-Enhancement-Webinar-October-30-2019.pdf

The second is to be held November 6, 2019 and is for professional administrators. https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/Downloads/WCMSA-Electronic-Attestation-Enhancement-for-Professional-Administrators-Webinar-November-6-2019.pdf

AMENDED REVIEW TIMEFRAME EXTENDED

In its own new Section 16.2 Amended Review, Medicare pushes the timeframe in which an Amended Review will be considered from 12-48 months from the date of the original approval letter to 12-72 months from the original approval. This is a welcome expansion to the workload threshold as many cases more than four years past the original approval date have still not settled. Additional language in Section 16.2 fleshes out details surrounding some of the parameters for Amended Review. With regard to a change in treatment, the new version states that changes in treatment plans won’t be considered without supporting medical documentation. Also, Version 3.0 offers a link for details on electronic submission:

See the WCMSAP User Guide at: https://www.cob.cms.hhs.gov/WCMSA/assets/wcmsa/userManual/WCMSAUserManual. Pdf

HOSPITAL FEE SCHEDULES

The new Reference Guide offers much-needed specificity to the sources of hospital pricing for surgical procedures. In the previous version, Reference Guide 2.9 stated within Section 9.4.3 WCRC Review Considerations, “Currently the WCRC prices WCMSAs according to the correct region for the state of venue. Hospital fee schedules are currently determined using the Diagnosis-Related Groups (DRG) payment for a Major Medical Center within the state, and this fee is applied to all locations within the state.” Changes to this Section in the 3.0 version are that the hospital fee schedules are determined using DRG payments for the “median” Major Medical Center within the “appropriate fee jurisdiction for the ZIP code, unless otherwise identified by state law.” (Emphasis added).

ADDITIONAL CHANGES:

• Section 2.2 Reporting a WC Case now includes an address change to:

Medicare – Medicare Secondary Payer
Medicare Secondary Payer Claims Investigation Project
P.O. Box 138897
Oklahoma City, OK 73113-8897

• Section 17.5 Annual Attestation and Record-Keeping has clarified the following address for submitting yearly attestation material:

NGHP
P.O. Box 138832
Oklahoma City, OK 73113

• Section 10.3 Rated Age Information and Life Expectancy has been updated to reflect the most recent life table link:

“CMS will project the cost of the claimant’s future treatment over the claimant’s life expectancy, using the Centers for Disease Control (CDC) Tables. https://www.cdc.gov/nchs/data/nvsr/nvsr68/nvsr68_04-508.pdf

NOT IN THE REFERENCE GUIDE, BUT ON THE HORIZON

• Rulemakings! Civil Monetary Penalties for Section 111 Medicare Mandatory Insurer Reporting have not yet been issued. According to the OIRA office, rulemaking should be issued in October of 2019. Similarly situated is possible rulemaking for Liability and No-Fault Medicare Set-Asides, also slated for this month. Both of these items have been collecting dust for years and were scheduled for action in September, which gave way to October. Will what little remaining of October bring the proposed regulations? Or will these rulemakings be pushed into November or beyond?

• Speaking of November, we are only a few weeks away from the annual announcement of the low dollar recovery threshold. Will this amount increase for 2020?

Future updates regarding Medicare Secondary Payer laws will be monitored by the Gordon & Rees Medicare Compliance Team. Please stay tuned for more information as it becomes available!

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