CMS Finishes New Medicare Card Distribution Initiative

The Centers for Medicare & Medicaid Services (CMS) has recently published a press release stating that it has completed its initiative of issuing new Medicare cards to all beneficiaries with new Medicare identification numbers as of January 16, 2019. The purpose of this initiative was to replace all Social Security number based HICNs with the new Medicare ID number, the Medicare Beneficiary Identifier (MBI) which is a randomly generated series of letters and numbers, as opposed to being based on an individual’s Social Security number, in turn adding a layer of security against identity theft and fraud and abuse. Specifically, the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 requires CMS to remove Social Security Numbers (SSNs) from all Medicare cards and to reissue new non-Social Security number based Medicare identification numbers by April 2019. The issuing of this bulletin indicates that CMS has completed this project of replacing all existing Medicare cards three months ahead of schedule. The full press release can be found here.

CMS states that the current administration is “committed to modernizing Medicare and has expedited this process to ensure the protection of Medicare beneficiaries and taxpayer dollars from the potential for fraud and abuse due to personal information that existed on the old cards.” CMS further asserts that more than half of the healthcare claims that it is now processing now contain an MBI.

CMS has previously outlined that it has exempted all Medicare Secondary Payer (MSP) Processes from exclusive use of MBI for the time being. That is, for Section 111 reporting Responsible Reporting Entities (RREs) may continue to perform Section 111 reporting processes using an individual’s full SSN, HICN, or MBI. The Section 111 User Guide states that if a HICN is reported, and the individual has been assigned an MBI, the MBI will be returned on the response file. Further, CMS has also previously stated that all Benefits Coordination and Recovery Center (BCRC) and Commercial Repayment Center (CRC) issued correspondence will use the most recent Medicare identifier that the RRE has provided when creating or updating a Medicare Secondary Payer record. In short, while the use of the HICN will continue to decrease until only the MBI is in use, CMS will not yet have any issue processing claims using an individual’s HICN (if one was previously issued to the individual).

As increasing personal security was the purpose of replacing the previous Medicare cards, CMS recommends that all beneficiaries destroy their old Medicare cards, begin using the new Medicare card immediately, and to protect your Medicare card just like a credit card. Further, in the event that a Medicare beneficiary has not received his or her new Medicare card, CMS recommends contacting 1-800-Medicare or logging in to the beneficiary’s mymedicare.gov account to ensure that their contact and mailing information is accurate.

Gordon & Rees remains committed to bringing you the most up to date information regarding all things Medicare Secondary Payer. Accordingly, we will continue to provide any updates regarding the use of MBIs as they are released. Should you have any questions regarding the above or need any Medicare compliance assistance, please do not hesitate to contact Gordon & Rees Medicare Compliance Group at mstockdale@grsm.com or 412-588-2277

CMS Issues updated Section 111 NGHP User Guide

As of January 4, 2019, CMS has issued an updated version of the MMSEA Section 111 NGHP User Guide. While version 5.5 of the User Guide has few changes, there are some noteworthy additions. The changes made to the latest version of the User Guide are as follows:

– Ch. III of the User Guide now clarifies that beginning January 1, 2019, the threshold for liability insurance settlements, judgments, awards, or other payments will remain at $750. CMS will also maintain the $750 threshold for no-fault insurance and workers’ compensation settlements, where the no-fault insurer or workers’ compensation entity does not otherwise have ongoing responsibly for medicals. This is outlined in Section 6.4 of Ch. III and in short, simply restates the fact that the TPOC dollar thresholds remain at $750 for liability, no-fault, and workers’ compensation insurance.

– The definition of the ‘Funding Delayed Beyond TPOC Start Date 1’ data field has been updated. This definition can be found in line 82 of Table A-3 and states “If funding is determined after the settlement date (TPOC Date), provide actual or estimated date of funding determination.” The previous definition simply stated “If funding for the TPOC Amount is delayed, provide actual or estimated date of funding.” The same verbiage has been added to lines 95, 98, 101, and 104 of Table A-5 Auxiliary Record, updating the definition of this field for all possible additional TPOCs (TPOCs 2 – 5).

– Ch. IV of the User Guide also provides updated versions of the excluded ICD-9 and ICD-10 tables in order to match the excluded lists that are available through the Section 111 MRA application (https://www.cob.cms.hhs.gov/Section111). These tables can be found in Appendices I and J.

– Lastly, version 5.5 of the User Guide has been updated to only include information from the last four User Guide releases in order to reduce the number of version and revision history pages.

Each chapter of the Section 111 NGHP User Guide, version 5.5 can be downloaded here.

Should you have any questions regarding the above or need any Medicare compliance assistance, please do not hesitate to contact Gordon & Rees Medicare Compliance Group at mstockdale@grsm.com or 412-588-2277

CMS Issues New WCMSA Reference Guide and Section 111 NGHP User Guide

As of October 1, 2018, CMS has issued updated versions of both the WCMSA Reference Guide and the Section 111 NGHP User Guide.

 WCMSA Reference Guide Version 2.8:

The updates found in version 2.8 of the Workers’ Compensation Medicare Set-Aside Reference Guide are as follows:

– As a part of an ongoing process, CMS must discontinue use of Social Security Number-based Medicare identifiers and distribute new randomly selected Medicare identification numbers to all beneficiaries, referred to as Medicare Beneficiary Identifiers (MBIs). Accordingly, all fields formerly labeled HICN are now labeled “Medicare ID” and will accept either an individual’s HICN or MBI (if assigned)

– The link to the CDC Life Expectancy Table has been updated. This link can be found at bullet #7 of Chapter 10.3 of the Reference Guide.

– The Verifying Jurisdiction and Calculation Method for medical reviews has been updated. This information can be found in Tables 9-1 and 9-2 in Chapter 9.4.4 of the Reference Guide.

– Version 2.8 of the WCMSA Reference Guide can be found here.

NGHP Section 111 User Guide Version 5.4:

The updates found in version 5.4 of the Section 111 Non-Group Health Plan User Guide are as follows:

– To meet Section 111 requirements, a Paperwork Reduction Act (PRA) disclosure statement has been added to this guide. This disclosure can be found on page iii of the User Guide.

– The contact protocol for the Section 111 data exchange escalation process has been updated. This escalation process can be found in Sect. 8.2 of the User Guide and in short, provides the contact information for the newly appointed EDI Director.

– In order to ensure updates are applied to recovery cases appropriately, RREs are asked to submit the policy number uniformly with a consistent format. When reporting updates enter the policy number exactly as it is entered on the original submission whether blank, zeros, or a full policy number. This requirement is discussed in greater detail in Sect. 6.6.5 of the User Guide

The excluded and no-fault excluded ICD-10 diagnosis codes have been updated for 2019. These codes can be found in Table I-1 and J-1 of Chapter V of the User Guide.

– The placement of the decimal point in the excluded ICD-10 “Y codes” of table I-1 has been corrected. For example, in version 5.3 of the User Guide these codes were written as Y921.10 whereas it should be written Y92.110. These codes are now written correctly.

Each chapter of the Section 111 NGHP User Guide, version 5.4 can be found here.

Gordon & Rees remains committed to bringing you the most up to date information regarding all things Medicare Secondary Payer related. Please do not hesitate to contact us should you have any questions about the newest versions of these reference guides.

 

Busy Southern District of Florida dismisses one MSP Recovery case; allows another to proceed, for now…

The United States District Court for the Southern District of Florida has been busy lately reviewing more litigation in front of them, courtesy of MSP Recovery LLC. Recently, the Court granted a motion to dismiss with prejudice another claim brought by not MSP Recovery LLC directly, but instead a subsidiary of MSP Recovery LLC, complicating the assignment relationships and ultimately leading to a dismissal for lack of subject matter jurisdiction.

As we recently reported, MSP Recovery LLC has had two pending claims either dismissed or sent back for amendment due to issues with subject matter jurisdiction. In both of these previous cases, there were questions surrounding who the original assignor of the recovery benefits was and/or if a valid assignment of those rights was made.

On July 31, 2018, the case of MSPA Claims 1, LLC v. Liberty Mutual Fire Insurance Company was dismissed due to the same issues recounted above.

In MSPA Claims v. Liberty Mutual, the Defendant Liberty Mutual brought motion to dismiss Plaintiff’s third amended complaint for lack of subject matter jurisdiction and failure to state a claim. As similarly discussed in Recovery v. State Farm, which was issued just last month, the Court again noted that standing must be present when the lawsuit was filed and cannot amend to add new plaintiffs.

The background is similar to the most recently reported cases including MSP Recovery, and the Plaintiff’s allege that they are the assignee of FHCP, HFAP, and IMCG and representatives that were Medicare beneficiaries who were enrolled in plans managed by FHCP, HFAP, and IMCG. Plaintiff’s further alleged that the Assignors paid for the Beneficiaries’ medical expenses which should have been paid by Defendant, the primary payer.

However, the Court in MSPA Claims v. Liberty Mutual specifically notes that Plaintiffs are not MAOs, Medicare beneficiaries or direct health care providers. Rather, they have obtained claims for reimbursement via assignments from the Assignors. Notably, the documentation reportedly showing this assignment was provided with the third amendment of the complaint. As such, Defendants argued that the case should be dismissed because Plaintiff lacked standing at the time the lawsuit was filed. Ultimately, the Court agreed with the Defendant and that Plaintiff lacked standing when the suit was originally filed and thus, cannot amend in an attempt to confer standing and failed to allege facts sufficient to show that any of the alleged Assignors have standing under the MSPA. Quoting various other courts rulings on the issue of FHCP and standing, the Court based its rationale on the cases that came before the one at hand.

In summary, the facts and findings of this case are almost identical to the two previous claims that have recently been reported upon. Lack of subject matter jurisdiction seems to continue to be found by courts involving these claims.

Just three days later another, less damaging order was entered in the Southern District of Florida, this time, in favor of MSP Recovery. On August 3, 2018, the court here entered an order granting MSP Recovery’s motion for leave to file a third amended complaint and denied plaintiff’s motion to dismiss. In this advancement in the case of MSP Recovery Claims, Series LLC v. Hanover Ins. Co. we see the court permitting MSP Recovery to amend its second amended complaint in order to change the named defendant from Hanover Insurance to it subsidiary which underwrites the insurance policy that is at the heart of this case. See generally MSP Recovery Claims, Series LLC v. Hanover Ins. Co., 2018 U.S. Dist. Lexis 131211. Hanover argues that MSP Recovery’s motion should not be granted based on futility and lateness, stating that the amendment would be futile because the plaintiff did not have standing at the commencement of the lawsuit and therefore could not correct this mistake without filing a new suit, and further, that MSP Recovery has provided no legitimate reason for the delay in correcting this mistake and therefore should not be provided the opportunity for leave to amend. Id. at 3. However, the court in citing to MSP Recovery Claims, Series LLC v. United Services Automobile Assoc., states that there appears to be a legitimate disagreement as to standing, and therefore amending the complaint would not be futile, and further, that MSP Recovery has provided appropriate reasoning for the delay in naming the correct defendant in arguing that the delay is due to Hanover’s failure to properly disclose the proper underwriter of the policy in question.

Thoughts: Two specific facts are interesting about these cases. First, in MSPA Claims I, the Court specifically acknowledges that this is the Plaintiff’s third attempt at amending the Claimant to meet the requirements for standing, in almost the same fashion that we see in Hanover. Secondly, the Court also makes a point to cite several previous cases in which standing was found to be lacking and even noted that “Plaintiff’s attempts to characterize HFAP as an MAO are disingenuous.” From these statements, it can be garnered that the courts are now aware of MSP Recovery’s tactics and the issues surrounding their filings and will be taking a much closer look at these cases going forward.

Gordon & Rees will continue to monitor these cases and provide updates.  Should you have any questions regarding the above or need any Medicare compliance assistance, please do not hesitate to contact Gordon & Rees Medicare Compliance Group at mstockdale@grsm.com or 412-588-2277

MSP Recovery v. Travelers

On June 21, 2018, the U.S. District Court for the Southern District of Florida granted with prejudice, Travelers’ motion to dismiss MSP Recovery’s claim against it for recovery under the Medicare Secondary Payer Act (MSP). This motion was granted, and the case dismissed, based on lack of subject matter jurisdiction. In MSP Recovery Claims v. Travelers Cas. & Sur Co., the court was faced with deciding whether MSP Recovery had standing under the private cause of action provision of the MSP to bring suit against Travelers for recovery of medical payments made to Medicare beneficiaries. See generally MSP Recovery Claims v. Travelers Cas. & Sur. Co., 2018 U.S. Dist. Lexis 105078.

As a brief background, MSP Recovery, LLC is an entity whose business model is relatively simple- it sets out to obtain assignments from Medicare Advantage Organizations (MAOs) in order to attempt to sue and recover for payments made by the MAO for medical treatment of a Medicare beneficiary that allegedly should have been made by a different insurer, or primary payer. This case is similar to a multitude of cases that MSP Recovery and its subsidiaries have filed against insurers across the country, alleging recovery on behalf of an MAO under the MSP. Gordon & Rees has previously covered, and will continue to provide updates on similar cases such as Recovery v. State Farm Mut. Auto. Ins. Co

In the case at hand, the court did not have to decide whether MSP Recovery’s arguments for recovery here were valid, as it must first determine whether MSP Recovery had standing to bring the case in the first place. MSP Recovery argues that has received an executed assignment from Health First Administrative Plans, Inc. (HFAP), and therefore should be permitted to bring this case under the MSP. While MSP Recovery may have very well received such an assignment, it has been made very clear in several cases now that HFAP is not an MAO, and therefore does not have standing to bring a cause of action against Travelers under the Medicare Secondary Payer Act. The court here agrees with and relies on the reasoning of other district courts in other similar cases, including MSP Recovery Claims, Series LLC v. Auto-Owners Insurance Co. and Recovery v. State Farm Mut. Auto. Ins. C., in holding that HFAP is in fact not an MAO, and at most, the administrative arm of another company that may have an MAO. Given that HFAP, and therefore MSP Recovery, is not an MAO it has not suffered an injury and further, lacks standing under the MSP, this case was dismissed based on lack of subject matter jurisdiction.

While this case represents an unsuccessful attempt by MSP Recovery, LLC to bring a case on behalf of a Medicare Advantage Organization under the MSP, the landscape surrounding MAO recovery rights continues to grow and change. Gordon & Rees will continue to provide the most up to date information as these cases develop.