A Practical Approach to MSAs Conditional Payments and Mandatory Reporting for WC and Liability Claims Operations September 19 2012 PRESENTERS Jon Gunter Executive VP MEDVAL Anne Hernandez ID: 449433
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MEDICARE COMPLIANCE:
A Practical Approach to MSAs, Conditional Payments and Mandatory Reporting for WC and Liability Claims Operations
September 19, 2012
PRESENTERS
Jon Gunter
-
Executive VP, MEDVAL
Anne Hernandez
–
Senior Managing Partner, Law Offices of Mullen & Filippi
Janet Selby
–
WC Program Manager, Municipal Pooling Authority
Brian T. Moss
–
Managing Partner, Orange County, Law Offices of Manning & Kass, et. al.Slide2
MEDICARE COMPLIANCE: THREE KEY AREAS
Mandatory Insurer Reporting
MMSEA Section 111
Data Reporting – current Medicare beneficiaries
Conditional Payment Recovery
CMS Has Statutory Recovery Rights (not a lien)
Dispute/Appeal/Pay
Medicare Set-Aside Arrangements (MSA)
Prevent Future Conditional Payments
No Shifting of the Burden (of Future Medical Payments) to Medicare
Each area is separate and distinct with its own protocols and workflows. Slide3
CMS CONDITIONAL PAYMENTS
Online portal open as of 7/2/12
-
www.msprc.info
for more information
Tips for speeding up receipt of information
Beneficiary signs in to
www.mymedicare.gov
Set deposition of MSPRC expert
Follow the process – dispute first, appeal only if necessary
Interest accrues during appeal process (begins 60 days after letter date)
Recovery exposure may be against any party to the settlement
[42 USC 1395y(b)(2)(B)(iii)] Slide4
A RISK MANAGEMENT APPROACH TO MSAs
What does the law say (or not say)?
Medicare may not pay if payment can reasonably be expected to be made under WC, Liability or No Fault [42 USC 1395y(b)(2)]
No mention of “MSA” or “WCMSA” or “LMSA”
What does CMS say?
There are no statutory or regulatory provisions requiring a WCMSA be submitted to CMS for review [CMS Memo dated May 11, 2011]
Review thresholds ($25,000 and $250,000) are based on CMS workloads, are subject to change, and are not safe harbors
How do we remain in compliance and apply this to our settlements?
Evaluate cases on individual basis v. submit every MSA for review
Consider MSA + Structure + Professional Administration + Language
Goal: Settle without overfunding the exposureSlide5Slide6Slide7
A LOOK AT TERMINOLOGY
WCMSA
= A future medical allocation prepared and priced with the intent of submitting to CMS for approval in a workers’ compensation settlement. Creation of this allocation type follows all protocols listed in CMS memoranda.
LMSA
= A future medical allocation prepared for use in conjunction with a liability case settlement. Pricing techniques currently vary – may use Medicare fee schedule, or usual/customary pricing. Depending upon jurisdiction, review/approval of this allocation may or may not be available.
MSA
= A future medical allocation prepared with the intent of preventing the cost-shifting of any post-settlement future medical care to Medicare. Not intended to pass through the current CMS review process. Pricing technique typically mirrors costs actually being paid in the claim and/or costs the applicant can obtain post-settlement on their own vs. the pricing required for approval of a WCMSA such as AWP, etc. Slide8
WORKERS’ COMPENSATION MSA BASICS
DO YOU WANT TO SETTLE BY COMPROMISE AND RELEASE IF YOU NEED AN MSA?
Consider:
1. Medical Reserves versus
WCMSA
value
2. Retired employee versus former employee with ongoing
employment
3. Cost of
WCMSA
versus likelihood of
settlement
4. One-year delay in finalizing settlement waiting for CMS to review the
WCMSASlide9
WORKERS’ COMPENSATION MSA BASICS
Recent case law allows for applicant’s attorney’s fees from a settlement to include MSA
values
More
interest in C&R from EE
Viale
v. Lockheed MartinSlide10
WCMSA
VALUE IN TYPICAL WORKERS’ COMPENATION
CASE
EXAMPLE 1
Non-surgical back, 26% permanent disability, non-surgical future
medical
Conservative
Care
MSA: $44,300.00
Aggressive Care MSA: $
93,000
Includes: Ms
Contin, Celebrex Slide11
WCMSA
VALUE IN TYPICAL WORKERS’ COMPENATION
CASE
EXAMPLE 2
Non-surgical
back with non-surgical FM
Typical MSA: $
65,000
Includes: Norco
, Ambien, CymbaltaSlide12
WCMSA
VALUE IN
TYPICAL
WORKERS
’ COMPENATION
CASE
EXAMPLE 3
Wrist
, knees
Typical MSA:
$63,000
Includes: Knee
replacement, NorcoSlide13
WORKERS’ COMPENSATION MSA BASICS
There are savings advantages
to
structuring
an MSA v. funding as a lump sum
Not recommended for MSAs under $35,000 with today’s rates
MSA is set up with an
initial deposit and annual
payments
Life Expectancy based on rated age, not actual age
Note:
should obtain a rated age for use in all MSAs, whether structured or lump sumSlide14
THE EFFECT OF MSP COMPLIANCE IN REAL LIFE
Real cases raise questions and consideration for the settling parties such as:
Medicare
compliance creates
“decision points” for every case
Post-settlement Medicare denials for beneficiaries
Not all treatment is Medicare covered (hearing loss, etc.)
SSDI – on or off, what if SSA records are incorrect?
Chronic pain meds – using a PBM to reduce exposure prior to MSA
Settling with and without CMS ApprovalSlide15
CASE SCENARIO # 1
41 y/o police officer, failed low back surgery, now treating for chronic pain
CMS returned query showing he was a beneficiary, likely based on disability status
Excess wanted to explore settlement, MSA requested
Total MSA $324,000, of which, $292,000 was medications; potentially another $73,000 for a medication that was recently stopped
Actual expenses $5000/year, lifetime exposure of $190,000
EE advised no longer a Medicare beneficiary at that point, had received benefits in the past but then denied at some point
Decision Point
– Do we seek Medicare approval or settle without and note the consideration of Medicare’s interests in the settlement language?Slide16
CASE SCENARIO # 2
66 y/o retired police officer, Medicare beneficiary, injuries to low back and heart
Employee having trouble with Medicare rejecting bills for unrelated conditions and was also having difficulty finding a physician under WC (living in Texas)
MSA requested to use in evaluating Medicare interests as part of C&R negotiation
Total value of annuity to cover Medicare exposure was $45,000 for both injuries
EE was concerned about what happens if he has a major cardiac event and the entire MSA is used – will Medicare resume covering his heart treatment thereafter?
Decision Points
– Is there a value on top of the MSA amount, for either uncovered services or as motivation to settle? Will Medicare resume payment in the event of unexpected circumstances that deplete MSA funds? Should we have the MSA professionally administered?Slide17
CASE SCENARIO # 3
64 y/o retired police officer, not yet a Medicare beneficiary, hearing loss
Medical treatment consisted of hearing aids and periodic hearing testing
We approached the employee regarding settlement of his future medical award by C&R
Reasonable expectancy that employee will become a Medicare beneficiary within the next year, but Medicare does not cover hearing aids
Total value of settlement estimated at $12,000 for hearing aids and related testing
Decision Point
– Do we need to consider Medicare’s interests when settling with a beneficiary or near beneficiary whose current treatment is not covered by Medicare? If so, how do we do this when no value for Medicare –covered treatment is available?Slide18
ITEMS MEDICARE DOES
NOT
TYPICALLY COVER
NOT COVERED BY MEDICARE PARTS A/B
Home assistance for laundry, gardening, window cleaning, meal preparation and other maid services
Mileage reimbursement
Transportation services (taxis, limos, bus passes)
Home modifications
Most dental and vision care
NOT COVERED BY MEDICARE PART D
Vitamins, supplements
Over-the-Counter medications
Benzodiazepines (tranquilizers such as Valium, Xanax)
“Off Label Use” drugs (such as Actiq being used to control pain in a non-cancer patient)
NOTE: For example purposes only – not an exhaustive list
.Slide19
MSP COMPLIANCE IN LIABILITY CLAIMS
Liability v. Workers’ Compensation: What are the distinctions?
Basic Definitions
“Settlement”
“Future Meds”
“Secondary Payer”Slide20
NEGOTIATIONS v. SETTLE v. TRIAL
Negotiations
- Conditional Payment Letter
- Final Demand
- Threshold v. Comfort Level
- Prosecution
?
Settle
MSA
v. Conditional Payment
Reimbursement
Negotiating with Medicare Post Settlement
WCMSA in place, but settled for less
Jury Trial
Future Medicals
MSA as evidence?Slide21
LIABILITY CASE EXAMPLE
HIGH EXPOSURE 3
RD
PARTY CLAIM WITH UNDERLYING, ONGOING WC CLAIM
WC concerns and road blocks
Approaches considered: step into WC carries shoes (take over lifetime medicals to remove WC issue from negotiation)
Outcome
L
essons
learned
WC liability v. employer liability
Causation (real world WC v. liability)
Something Else To Consider:
- SIU and CMS…how, or do they interact?Slide22
MSP COMPLIANCE – LEGISLATION UPDATES
CMS 6047 Advance Notice of Proposed Rule Making (ANPRM)
CMS sought industry comment for handling future medicals in liability cases
Comment period ended 8/14/12
Results will become “rules” (not memos as in WC)
S.M.A.R.T. Act
HR 1063 and S 1718 (strong bipartisan support)
MSP and WC Settlement Agreements Act
HR 5284 (4
th
attempt, 3% chance of passing)Slide23
RESOURCE LIST
CMS
Policies for Workers’ Compensation MSA Proposals:
http://www.cms.hhs.gov/WorkersCompAgencyServices
/
Medicare Secondary Payer Recovery Contractor:
http://www.msprc.info
/
MMSEA Section 111 Information:
http://www.cms.hhs.gov/mandatoryinsrep
/
https
://www.section111.cms.hhs.gov
/
Medicare Manuals:
http://
www.cms.hhs.gov/manuals/iom/list.aspSlide24
RESOURCE LIST – CONT’D
Medicare
Coverage Database:
http://
www.cms.hhs.gov/mcd/search.asp
MSP Statute:
http://
caselaw.lp.findlaw.com/scripts/ts_search.pl?title=42&sec=1395y
Code of Federal Regulations:
http://
www.gpoaccess.gov/cfr/index.html
MSP General Discussion:
http://www.medicaresetasideblog.com
/Slide25
QUESTIONS?
Jon Gunter, Executive VP, MEDVAL
(949) 203-3082
jgunter@medval.com
Janet Selby, WC Program Manager, Municipal Pooling Authority
(925) 943-1100
jselby@mpa-nc.com
Anne Hernandez, Sr. Managing Partner, Law Offices of Mullen & Filippi
(707) 542-4600
ahernandez@mulfil.com
Brian T. Moss, Managing Partner, Law Offices of Manning & Kass, et. al.
(949) 440-6690
btm@manningllp.com