LMSA Rules by September?

Once again the possibility of regulations from the Department of Health and Human Services regarding Liability Medicare Set-Asides (LMSA) and No-Fault Medicare Set-Asides (NFMSA) has been brought into the spotlight.  In recent days, the Office of Information and Regulatory Affairs’ Office of Management and Budget published a notice of proposed rulemaking to provide guidance to Medicare beneficiaries and to protect the Medicare Trust Fund.  The full notice can be found here.  Per the abstract:

“This proposed rule would ensure that beneficiaries are making the best health care 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. 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.”

Interestingly, this proposed rule in regards to Liability Medicare Set-Asides (LMSAs) is noted to have “economically significant” priority. According to the Office of Management and Budgets, “significant” regulatory actions are defined in an executive order as those that: ‘Significant regulatory actions are defined in the Executive Order as those that 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; 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.”[1] Furthermore, a Notice of Proposed Rulemaking (NPRM) is expected to be decided upon in September 2019. Although the actual proposed rule was unavailable for review, to those of us that are familiar with the industry, rules for LMSA and NFMSA have been anticipated for some time.  However, this is the first indication of movement outside the Department of Health and Human Services.

This posting by the Office of Management and Budget is the first step to development of regulation and is not yet a proposed rule. This publication is simply notification that CMS is currently in the process of putting together a proposed rule.  Once the draft is prepared it will be published in the Federal Register and after publication any interested parties in the rule will be provided 60 days to comment.  Once the period for comment closes, CMS will decide whether to proceed with development of the regulation.

It is unclear as to whether CMS will seek ongoing feedback from interested stakeholders. As of this date, no Town Hall has been scheduled.

Gordon & Rees has previously written official comments for prior notices of proposed rulemaking and is equipped to do so on behalf of interested stakeholders. If you are interested in this service, please contact us. As this process develops Gordon & Rees will continue to keep you apprised of the progress.

[1] Department of Management and Budget FAQs. https://www.reginfo.gov/public/jsp/Utilities/faq.myjsp

New Conditional Payment Portal Functionality Expected in January

Long awaited improvements to the Medicare conditional payment reimbursement process may be available at the start of the new year, according to a November 19 alert from The Centers for Medicare and Medicaid Services (CMS). Back in August, CMS announced the Medicare Secondary Payment Recovery Portal (MSPRP) would offer enhanced functionality in 2019, including the ability for authorized Non-Group Health Plan (NCHP) users to self-report leads on liability, auto, no-fault or workers’ compensation cases. According to the alert, this functionality will be effective on January 7, 2019.  CMS is hosting a webinar regarding this enhancement on December 18th, 2018 at 1:00PM EST. A link to register for this webinar can be found here>>CMS 12.18.18 Webinar Registration

The ability to self-report leads will generate Medicare Conditional Payment information that authorized parties can review and/or dispute in accord with their reimbursement obligations under the Medicare Secondary Payer laws. Such enhanced portal functionality should eliminate several weeks of wait time per claim in obtaining Medicare conditional payment information.

This enhancement was initially introduced as a possible improvement for 2019 during a webinar CMS conducted on August 16. A second enhancement allowing online payment of Medicare conditional payments to the MSPRP was also referenced at that time as a possible improvement for 2019. The November 19 CMS alert makes reference to online payment.

Stay tuned to the Gordon & Rees MSPulse for a summary of the December webinar. In the meantime, please contact us should you have any questions.

CMS Low Dollar Recovery Threshold Remains $750 for 2019

There will be no change in the low dollar threshold for Medicare conditional payment reimbursement in 2019. The SMART (Strengthening Medicare And Repaying Taxpayers) Act of 2012 serves to avoid governmental waste by setting an annual amount in which the costs associated with reimbursement outweigh the benefits. The SMART Act provides that the Secretary must calculate and publish not later than November 15th a low dollar threshold amount applicable in the following year for settlements, judgments, awards or other payments in which Medicare Conditional Payment reimbursement need not be reimbursed given the costs associated with recovery. This threshold corresponds also to the $750 threshold for Medicare Mandatory Insurer Section 111 reporting requirement.

On Friday, November 15th, The Centers for Medicare and Medicaid Services released their updated Computation of Annual Recovery Thresholds for Non-Group Health Plans.  Below are the Agency’s findings:

  • The 2019 reporting threshold remains $750 for no-fault, workers’ compensation and liability cases.
  • The estimated cost to process any individual case is $297
  • The average Medicare conditional payment demand amount for settlements of $500 is $368 (74%)
  • The average Medicare conditional payment demand amount for settlements around $750 is $518 (69%)

These metrics once again demonstrate exceedingly high percentages of cost versus recovery for low dollar settlements. The SMART Act applies a common sense approach to recovery efforts, given such costs associated with reimbursement and the interest of avoiding wasteful spending of government money,. The complete notice can be found in the link here>> CMS Computation-of-Annual-Recovery-Thresholds-for-NGHP–2019.pd

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.

 

Potential Medicare Legislation and its Impact on The Medicare Approval Process

The path from submission of a Medicare Set-Aside (MSA) to final approval can be riddled with many twists, turns and roadblocks along the way. Legislation has been introduced in the last several years to reform this process, but has failed to gain necessary momentum in both the House and Senate for passage. On June 18, 2018, a revised version of this legislation was introduced in the Senate by prior sponsors, Senators Portman (R-OH) and Nelson (D-FL). Senate Bill 3079, Medicare Secondary Payer and Workers’ Compensation Settlement Agreements Act of 2018, amends title XVIII of the Social Security Act to include Medicare Set-Aside provisions and guidance for the Medicare approval process.

Bill Highlights

The revised version of this legislation contains many key provisions that would impact Workers’ Compensation Medicare Set-Asides. Some highlights of this Bill are as follows:

  • The Bill allows for an optional proportional adjustment to the MSA in certain circumstances. Specifically, a party to the settlement may elect to calculate a percentage reduction in the MSA “for the total settlement amount that could have been payable under the applicable workers’ compensation law…had the denied… portion of the claim not been subject to a compromised agreement.” Calculation of the MSA reduction is equal to the denied percentage of the settlement. It is unclear how this would actually be argued and implemented to reduce the MSA. Further, this option is only available if the party requesting this reduction has written consent to do so from the other party to the settlement.
  • Submission of a formal MSA proposal is still a voluntary process. In the event of submission, the Secretary of Health and Human Services has sixty (60) days from receipt of the submission to issue a decision approving or denying the MSA. If the MSA amount is denied, the reasons for denial must be clearly outlined in the denial letter.
  • The Bill also offers a formalized appeal process with the potential for judicial intervention. Specifically, subsequent to a request for reconsideration, the parties can request a hearing before an administrative law judge and judicial review of the Secretary’s final determination after the hearing.
  • Rather than self administer or have the MSA professionally administered the MSA fund can be sent directly to CMS. This is an option that could help relieve the financial stress which is currently on the Medicare Trust Fund. All parties must agree to elect this option. The legislation is silent on what would happen if the MSA funds were not depleted by the claimant.
  • In addition, the legislation provides that State Workers’ Compensation Laws should be final and conclusive as to any and all matters within the jurisdiction of the State in determining the reasonableness of settlement value; allocation of settlement funds; the projection of future indemnity or medical benefits expected to be paid under the State Workers’ Compensation Law; and the total amount that could have been payable for a claim in the event of a compromised agreement.

If passed, this legislation would become effective on January 1, 2019. Currently the legislation has been referred to the Committee on Finance.

Follow Up Thoughts:

The legislation is a step forward in defining and implementing a more consistent and clearer Medicare approval process. There are still issues however that remain outstanding including transparency in how the exact amount of the MSA should be calculated, how to create a more realistic approach to controlling prescription drug costs in Medicare Set-Aside allocations, and how these provisions will actually be implemented by CMS. This legislation is an attempt to formalize a more defined MSA process and may make the path to Medicare Set-Aside approval much less thorny and in the end, hopefully, much more rosy.

 

CMS Issues Opioid Roadmap

On June 11, 2018, CMS issued a purported roadmap in the future handling of opioid medications. Appearing to build off the proposed processes announced in February of this year, CMS has detailed a three-pronged approach to combating the opioid crisis. This three-pronged approach consists of:

  • Prevention of new cases of opioid use disorder (OUD)
  • Treatment of patients who have already become dependent on or addicted to opioids
  • Utilization of data from across the country to target prevention and treatment activities

Furthermore, CMS reported that they have been working on communications with beneficiaries to explain the risk of prescription opioids. Another strategy, reported by CMS is to endeavor to work with individual states to tailor programs to their populations. Citing work with seven states, which were not expressly identified, CMS argues such a strategy could aid unique state populations and their individual issues with the opioid issue.

CMS admits this roadmap is only a start and the plans and programs will continue to evolve. We at Gordon & Rees will continue to monitor these proposed processes and will report any updates as they develop.

Social Security Releases 2018 Trustee Report: Expect More Aggressive Measures from CMS.

On June 5, 2018, the Social Security Board of Trustees released it’s annual report on the long-term financial status of the Social Security Trust Funds.  Per this report, the Old—Age and Survivors Insurance and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2034 and Medicare by 2026. This projection remained the same from the previous year. More importantly, while the assets of the combined OASI Trust Funds increased by $44 billion in 2017, the total annual cost of the program is projected to exceed total annual income in 2018 for the first time since 1982, and remain higher throughout the 75-year projection period.

These figures are especially worrisome for those of us in the industry as Medicare has become increasingly more aggressive in recovery of payments, denial of payments, and garnishment of benefits. As the total annual cost of the program is expected to exceed the annual income, it is reasonable to conclude that more forceful tactics by the agency will be implemented to protect the Fund. Furthermore, civil penalties and other previously under utilized measures may be on the horizon. We at Gordon & Rees are committed to bringing you the most up to date information regarding this matter and will continue to report as new developments occur.