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Medicare to implement new Medicare Secondary Payer (MSP) coding process on July 6, 2009

Medicare Set Aside Services — Thu, 02 Jul 2009 15:24:00 GMT

Good news/Bad news

In its continued efforts to reduce the amount of conditional payments expended annually on cases in which Medicare is secondary to Workers' Compensation, Medicare is set to implement a new MSP code next Monday, July 6th. This code will be used in Medicare's claims processing system to specifically identify cases on which the Centers for Medicare and Medicaid Services (CMS) have reviewed a Workers' Compensation Medicare Set-Aside (WCMSA) arrangement. With the advent of this new code, CMS will now have the capability to deny payments that are related to the diagnosis(es) coded in any given WCMSA arrangement. All physicians, providers, and suppliers who bill Medicare contractors (including carriers, DME contractors, regional home health intermediaries, and Part A/B Medicare administrative contractors) will be subject to this new coding procedure. As such, proper coding of the diagnosis(es) in every WCMSA arrangement submitted to CMS is now even more critical. There is no discussion within this new implementation process regarding application of this new MSP code to MSA arrangements on liability or no-fault cases.

The good news for Workers' Compensation insurance professionals is this: there should begin to be a decrease in the amount of conditional payments made on your Workers' Compensation claims. On the other hand, the bad news for Medicare beneficiaries is that they will need to be even more vigilant in administering their WCMSA accounts post-settlement. Medicare will be sending notices of denial directly to beneficiaries for claims received that appear to be related to WCMSA diagnosis(es) advising them that "Your claim has been denied by Medicare because you may have funds set aside from your settlement to pay for your future medical expenses and prescription drug treatment related to your injury(ies)."

One additional point to ponder….How will this new MSP coding procedure, which will identify cases on which CMS has reviewed a WCMSA, intersect with the Mandatory Insurer Reporting requirements which will identify for Medicare all Medicare beneficiaries who have received a settlement, judgment, or award? The days of evading or avoiding MSP issues are quickly coming to an end!

For more information, please see www.cms.hhs.gov/MLNMattersArticles/downloads/MM5371.pdf

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MMSEA SECTION 111 - A LUMP OF COAL FOR CHRISTMAS

Medicare Set Aside Services — Fri, 26 Jun 2009 16:28:00 GMT

While recently trying to find out why there was not more uproar in the insurance industry regarding the Section 111 reporting requirement when the MMSEA of 2007 was proposed to Congress, we found that perhaps it was because no one probably even knew what was coming. Note to would be lobbyists: If you ever want to sneak something through the legislature, do so right before the Christmas break. Take a look at this time line…who says our government can't get anything done?

S.2499
Title: A bill to amend titles XVIII, XIX, and XXI of the Social Security Act to extend provisions under the Medicare, Medicaid, and SCHIP programs, and for other purposes.
Sponsor: Sen Baucus, Max [MT] (introduced 12/18/2007) Cosponsors (1)
Latest Major Action: Became Public Law No: 110-173 [GPO: Text, PDF]

ALL ACTIONS:

12/18/2007:

Introduced in the Senate, read twice, considered, read the third time, and passed without amendment by Unanimous Consent. (consideration: CR S15834-15843; text as passed Senate: CR S15837-15843)

12/18/2007 5:56pm:

Received in the House.

12/18/2007 6:01pm:

Held at the desk.

12/18/2007:

Message on Senate action sent to the House.

12/19/2007 10:38am:

Mr. Pallone moved to suspend the rules and pass the bill.

12/19/2007 10:38am:

Considered under suspension of the rules. (consideration: CR H16842-16855)

12/19/2007 10:38am:

DEBATE - The House proceeded with forty minutes of debate on S. 2499.

12/19/2007 11:31am:

At the conclusion of debate, the Yeas and Nays were demanded and ordered. Pursuant to the provisions of clause 8, rule XX, the Chair announced that further proceedings on the motion would be postponed.

12/19/2007 4:22pm:

Considered as unfinished business. (consideration: CR H16900)

12/19/2007 4:29pm:

On motion to suspend the rules and pass the bill Agreed to by the Yeas and Nays: (2/3 required): 411 - 3

Roll no. 1184). (text: CR H16842-16848)

12/19/2007 4:29pm:

Motion to reconsider laid on the table Agreed to without objection.

12/19/2007:

Cleared for White House.

12/27/2007:

Presented to President.

12/29/2007:

Signed by President.

12/29/2007:

Became Public Law No: 110-173.

Available at: http://thomas.loc.gov/cgi-bin/bdquery/z?d110:SN02499:@@@X

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Reality Check

Medicare Set Aside Services — Mon, 22 Jun 2009 19:03:00 GMT

June 12, 2009

MEDVAL
8860 Columbia 100 Parkway
Suite 213
Columbia, MD 20777

RE: Claimant:
      Employer:
      DOA: 12/21/2004
      Our Claim Number:

Dear MEDVAL:

An initial MSA evaluation was done on this claim on January 7th, 2008 and a revision was completed on December 16th, 2008.

Since that time we have settled the indemnity portion of the claim. This appears to have had an effect on the need for medical treatment sought by the Claimant.

Will you kindly prepare another update so that we can investigate the possibility of settling medicals?

Sincerely,
Client

Note to CMS: This really happens....maybe it might be appropriate to allow for a re-evaluation of a previously approved MSA more often than never?

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June 2, 2009 CMS Memo on Prescriptions

Medicare Set Aside Services — Wed, 03 Jun 2009 15:16:00 GMT

On June 2, 2009, CMS published guidance for WCMSA submitters regarding prescription drug issues under the new independent review procedures effective June 1, 2009. In response to an obvious barrage of inquiries by the WC community since the AWP memo was released on April 3, 2009, CMS has addressed many of the issues that the memo raised. Despite the conciliatory tone, CMS has not really conceded to any of the issues raised.

CMS has stated essentially that it will consider any evidence presented with a WCMSA proposal, however absent a clear and definitive statement from the treating physician (bolded in the publication in case you overlooked it) supporting whatever you are trying to prove, it is not likely to consider your rational for not including a lifetime supply of all current drugs in use priced at AWP.

What CMS did remind us is that the Patel Memo said that WCMSAs are only appropriate after MMI has been reached, which explains a lot about the rationale behind some of its review policies. If at MMI with a permanent impairment, I guess the assumption is that the drug regime is stable, consistent and unchanging. There should be no question of titration or termination of the drugs in question at the time of review. If it were only that easy. This type of naivety toward the insurance settlement process is why there is such a backlash against the WCMSA review process.

CMS continues to ignore the fact that the workers' compensation program is contentious and that very frequently the "medical evidence" that it is basing its opinions on is not truly reflective of the reality of the claimants' medical situation. In statement #3, CMS agrees to consider a tapering program if proposed by the treating physician. If claimant is at MMI with a stable need for his current meds, why is he suddenly able to taper in anticipation of settlement? CMS routinely ignores any evidence that at the time of submission claimant has virtually ceased treatment in anticipation of settlement and will require funding of a WCMSA based upon the past medical record. Accepting the treating physician's recommendations without question is like letting the claimant's attorney set the reserve on a claim or the defense attorney deciding to accept a settlement offer on behalf of the claimant. While you may get an accurate result on occasion, there might just be a little bias built into the process.

Other disappointing points of interest concerned patent expiration, off-label uses and DURs, none of which it appears will be genuinely considered considered despite CMS assurance to the contrary. The only scenario where it might be considered is if the treating physician convincingly makes a statement as to the applicability. We find it unlikely that a treating physician with 15 minutes to see a patient is going to take the time to clearly and concisely advocate for less treatment in the interest of documenting the medical record for MSA purposes.

CMS' stand is that anything can, and may, happen to an individual's pharmaceutical needs, however CMS has elected to err on the side that benefits it most and require the most costly funding scenario. With respect to off-label utilization, CMS correctly makes the point that it is legal to prescribe drugs off -label in the United States. The part they fail to realize is that many off-label uses would NOT be Medicare covered under the Part D program if the drug is not part of a formulary. More on this subject at a later time.

On the bright side, at least CMS answered one question. The MSA industry now knows that it may search through the hundreds of listings in Redbook for any given drug to seek out the least expensive NDC. We wonder if the WCRC will dedicate that much time to the task while it is independently pricing drugs? Should they fail to select the least expensive option, will that decision be subject to reconsideration?

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Important Update for New York Clients

Medicare Set Aside Services — Wed, 20 May 2009 19:09:00 GMT

Below, please find and excellent case law summary by HPM&B regarding subrogation claims in personal injury settlements:

THE POTENTIAL IMPACT OF FASSO V. DOERR ON SETTLEMENT NEGOTIATIONS

Under the recent decision by the Court of Appeals in Fasso v. Doerr, 12 N.Y.3d 80, 903 N.E.2d 1167, 875 N.Y.S.2d 846 (2009), the defense bar must exercise greater caution in negotiating settlements of personal injury actions because the parties do not have an automatic right to extinguish the equitable subrogation claim of a health insurer who paid all or part of the plaintiff's past medical expenses. If a tortfeasor settles with an injured party for less than its total insurance coverage without obtaining a release from the health insurer, it could be exposed to additional liability on the subrogation claim. The New York Legislature is considering a bill that would close the so-called “subrogation gap.”

In Fasso, plaintiff brought an action in Buffalo County, alleging that defendant's malpractice caused plaintiff to undergo two liver transplants. The surgical and medical expenses, totaling $780,000, were paid by her health insurance carrier, Independent Health Association Inc. (IHA). IHA made an unopposed motion to intervene in order to pursue recovery of those expenses from defendant Dr. Doerr, which was granted. IHA asserted a claim for equitable subrogation. The equitable subrogation doctrine allows an insurer to stand in the shoes of the plaintiff and collect from a tortfeasor sums the insurer expended under its policy.

After the trial began, the injured plaintiff and the defendant physician agreed to settle the case for a total sum of $900,000. They also agreed that the defendant physician did not admit wrongdoing and that the subrogation cause of action by IHA was extinguished under the “made whole” rule because the injured plaintiff settled for less than her actual damages. The trial court approved the settlement and dismissed IHA's subrogation claim.

The Court of Appeals reinstated the subrogation claim and remanded the case for further proceedings, rejecting the argument that this claim was extinguished by the settlement. The Court held that it is only when the injured party's recovery by settlement or verdict is greater than the wrongdoer's available insurance coverage and assets that the insurer is barred from sharing in the settlement payment or recovery. Because there was $1.1 million in coverage remaining under the defendant's $2 million malpractice policy following the $900,000 settlement, this provided a potential source of recovery for IHA.

Fasso was decided in a unique procedural posture because neither party opposed IHA's motion to intervene in the proceedings. Indeed, the Court of Appeals invited the Legislature to consider whether it is good policy to allow health insurers to intervene and assert equitable subrogation claims in personal injury actions. It observed that “participation by insurers in settlement negotiations creates conflicts of interest with plaintiffs, who may wish to accept settlements that do not allocate sufficient monies to cover all or part of the medical expenses, and discourages or prevents settlements since insurers will be inclined to object to anything less than full recovery of their expenditures.” Indeed, the New York Legislature is considering a bill that would amend CPLR 4545 to address this issue, providing that “[e]xcept where there is a statutory lien or statutory subrogation right, no defendant entering into such settlement shall be subject to a claim for reimbursement by any person who supplied the collateral source payments.” S.2393; A.2875 (for full text, visit http://public.leginfo.state.ny.us/menugetf.cgi).

While the ramifications of Fasso and the pending legislation are still unclear, a settling defendant must be aware of expenses borne by a health insurer. If a settlement is for less than the defendant's available insurance coverage and less than the full value of the injury, the defendant still may need to contend with a subrogation claim. It should consider opposing the health insurer's motion to intervene as a subrogee or be prepared to include the subrogee in settlement negotiations.

posted with permission of:

Heidell Pittoni Murphy & Bach LLP

99 Park Avenue

New York , NY 10016

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Business 101

Medicare Set Aside Services — Tue, 05 May 2009 15:38:00 GMT

Recently a NAMSAP member posted a question to the membership about how he could start an MSA business and garner the attention of insurance company and attorney clients. I am not sure that this forum was the right place to solicit such information since a group of competitors is probably not the best place to get helpful information. But the question is valid and it reminds me of what has made MEDVAL successful over the years. Here is my advice to this gentleman.

1. Be great at what you do - There is no substitute for experience and professionalism. Take pride in your work, develop the skills needed to do a competent job and always seek to improve your knowledge. The world is full of so called "experts", be the real thing and customers will find you.

2. Deliver exceptional customer service - Most businesses provide good service. But loyal clients are developed by going above and beyond the call of duty. That means answering a phone call after hours, working through the weekend to meet a mediation deadline and always delivering more than you promise or the customer expects.

3. Be a problem solver - Too many people in the world are content to let others figure out problems for them. Don't be one of them. If a client has a problem, YOU figure out how to help them solve it. And most of all, don't become the problem yourself as so many vendors in the MSA industry have historically done to the detriment of their businesses.

4. Never stand still - Business moves at the speed of light. While everyone is playing catch up, you need to deliver industry leading solutions and continually push the envelope of what is possible in your field. Innovation is possible, even in seemingly static industries like Medicare Set-Asides, structured settlements or custodial administration.

5. Develop a reputation for honesty and integrity - Always tell your clients the truth even when they aren't going to like it. A wise lawyer once said the hardest part about practicing law is telling a client something they do not want to hear. And always do what is in the client's interest even if it momentarily conflicts with your own. Successful businesses are built over the long run and clients have very long memories.

6. Be humble - No matter how successful you are there is always someone doing better. Be thankful for whatever business your clients entrust to you and appreciate the small customers as much as the big ones. I am reminded of a structured settlement company that always boasts about how much better they are than their competitors, how they only do the "big" cases, yet financially underperform year after year. Maybe their hubris clouds their judgment about what value the market places on their services.

7. Treat your employees like the invaluable assets they are - Great service businesses are built with great people. Find the best people you can and pay them 10% more than the "market" rate. Great people deliver great results and are worth the extra money. Always appreciate that top performers have other places they can devote their time and energy.

8. Find customers that fit with your business philosophy - No one can be all things to all people so don't try. Decide what you are best at and go from there. For example, we never participated in the "guaranteed MSA" marketing and did not seek out clients that wanted a guarantee. Nor are we aggressively pursuing MMSEA reporting in exchange for a Medicare Set Aside relationship, exclusive or otherwise. That may have cost us some clients but we don't believe our clients best interests are served by these types of programs.

9. Treat your vendors and partners with respect - One thing I have learned over the years is that seemingly "unimportant" people/vendors can have a huge impact on the success of your business. If you treat everyone fairly and with respect, there may come a time when they are in a position to influence a potential customer to do (or not to do) business with you. Even if that is never the case, wouldn't you rather have more friends than enemies?

10. Learn to run a business - You don't need to have an MBA from Harvard but you do need to understand the fundamentals of business. You cannot accomplish Steps 1 - 9 if you can't attract customers or your paychecks always bounce. A fundamental understanding of finance, human resources, marketing, sales and operations is critical no matter what business you are in. Many a business has been done in by an incompetent President or CEO who thinks that their "industry knowledge" is an adequate substitute for sound business practices.

And finally, if you don't love what you do, then become a jewelry designer or hedge fund manager….life is too short.

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