Medicare Updates its Medicare Advantage and Prescription Drug Plan

Medicare has formulated a response to the opioid epidemic by altering the authority and ability of Medicare Advantage Plans and Prescription Drug Plans to implement drug management programs.  This change in the regulations issued by Medicare is the product of the Comprehensive Addiction and Recovery Act of 2016 (CARA) which authorized Medicare prescription plans to establish drug management programs beginning 1/1/2019.  This means as early as 1/1/2019, an MAP or Medicare Prescription Drug Plan will have the ability to identify “at-risk beneficiaries” and implement drug management programs for those individuals.  This also means a prescription provider may reach out to a prescriber or beneficiary regarding such management programs.  It is important that prescribers and beneficiaries are educated that such programs may be used by their Medicare insurance provider in the future.

We will keep you posted as the war on opioids further develops.

MSPA Claims 1 LLC choosing new path for recovery under the Private Cause of Action

An interesting opinion was recently issued by the US District Court for the Southern District of Florida in the Claims v. Bayfront Hma Med. Ctr case.(2018 W.S.Dist.LEXIS 44913). The underlying facts of the claim involve a Medicare Advantage Plan enrollee, D. W., who was involved in a  motor vehicle accident on February 1, 2014. The Medicare Advantage Plan was administered by Florida Healthcare Plus ( “FHCP). D.W received medical treatment from a facility operated by the Defendant, Bayfront.  At the time the treatment was provided, D.W. was covered by a no-fault plan, First Acceptance Insurance Company,  and by the FHCP administered Medicare Advantage Plan. Bayfront billed the no-fault plan for $6,255.96 in charges on April 14, 2014. Partial payment was made in the amount of $3,753.58. Bayfront then billed FCHP the same amount, $6,255.96. A separate partial payment of $691.64 was made by FCHP. MSPA Claims, as an assignee of FCHP,  brought this claim on behalf of itself and a similarly situated class of Florida Medicare Part C plans against the provider, Bayfront. Recovery was being sought under the following theories: 1. MSP private cause of action  42 U.S.C. Section 1395 y(b)(3)(A), 2. Florida Deceptive and Unfair Trade Practices Act ( “FDUTPA”) and 3. an unjust enrichment claim.  Defendant moved to dismiss the action arguing that the MSP claim was barred by the statute of limitations and cannot be brought against a provider. The Plaintiff’s standing to bring suit under the remaining two claims was also challenged.

The Court dismissed the claims brought under the  Florida Deceptive and Unfair Trade Practices Act ( “FDUTPA”) and the unjust enrichment theory finding that the Plaintiff’s assignment from FCHP did not include these types of actions. The private cause of action claim, however, was allowed to stand. In reaching this conclusion, the Court found that the plain language of the private cause of action provision was ambiguous. It could be viewed as both allowing a private cause of action against a primary plan as well as a private cause of action against “any entity” who failed to provide “appropriate reimbursement” to the Government or the Medicare Advantage Plan. The Court also gave deference to CMS’ regulations that give Medicare Advantage Plans the same rights to recover from a primary plan, entity or individual that the Government exercises under the MSP regulations. The Court’s assessment of the multiple statutory provisions also supported their conclusion that the Plaintiff may bring a private cause of action for double damages against the provider Bayfront. The Plaintiff, however, will still be required to prove that the payment made to Bayfront was actually a conditional payment under the Medicare Secondary Payor Act. In considering the statute of limitations argument raised by the defense, the Court found that Section 1395y(b)(2)(B)(vi) language does not require that a suit be filed within three years of the date on which the item or service was furnished. This provision instead pertains to the amount of time the Government has to seek reimbursement.

This action represents a departure from the typical claims filed by MSPA Claims against primary insurers, such as automobile or commercial liability insurers,  for reimbursement of conditional payments made to Medicare Part C enrollees by the Part C plans. As the volume and scope of litigation spreads, parties should be proactive in developing a protocol to address claims involving payments by Medicare Advantage Plans.



New Commercial Repayment Contractor in 2018

Performant Financial Corporation announced on October 5, 2017, that it was awarded the Medicare Secondary Payer Commercial Repayment Center (CRC) contract for identifying and recovering conditional payments in 2018. Performant has significant experience in assisting government organizations in the prevention and recovery of improper payments. Having served as a Recovery Auditor for CMS in the past, we expect a smooth transition between the current contractor, CGI and Performant in January of 2018.  We will keep you advised of further developments.

CMS Delivers Expanded Re-Review Process and Modifies Case Re-Opening Process

CMS issued an updated Workers’ Compensation Medicare Set-Aside Portal (WCMSAP) User Guide, Version 5.1 on July 10, 2017. Section 12.4 of the Guide outlines the new expanded Re-Review process for CMS approved cases , as promised by CMS in its December 21, 2016 Alert. Under this Section, a party may now seek a re-review when the current care projections differ by 10% or $10,000, whichever is greater, from the projections in the CMS determination. The difference may be higher or lower.

In order to seek an “Amended Review”, the following requirements must be met:

  • The original submission must have occurred between one and four years before the date of the Amended Review request.
  • Cannot have a prior request for an Amended Review.
  • The change in treatment must result in the greater of either a 10% or $10,000 change in the prior CMS determination amount.

The portal process for completing the Amended Re-Review request requires a line by line review of the CMS determination projections along with the entry of the new treatment projections and reference to specific supporting documentation. Since parties are still able to seek a re-review when they disagree with the CMS determination, this right will presumably apply to the Amended Review determination.

The updated Guide also revised the case re-opening process for submissions that have been closed by CMS. Section 12.3.5 provides that parties will have to resubmit the entire case, along with all associated documentation, when more than 12 months have passed since the date of the last closeout letter. This is essentially a new CMS submission in the case.
NuQuest offers the “Amended Review Submission Service” upon request. Our Service Coordinators and Settlement Consultants will also work with you to determine the optimal approach for your case. Although the CMS “Amended Review” is a welcome addition, the NuShield Certified MSA may be a better option.

Is the Pot Calling the Kettle Black?

The United States, on behalf of the Department of Health and Human Services (DHHS), Centers for Medicare and Medicaid Services (CMS) division, recently filed a civil fraud action under the False Claims Act (FCA) against various United Health Medicare Advantage Plans (MAPs). (Case 2:09-cv-05013-JFW-JEM Filed 5/1/17, US District Court for the Central Division of California, Western Division). The Government’s Complaint alleged that the UnitedHealth Plans received improper payments under the Medicare Advantage Programs (MA Programs) due to their failure to objectively review enrollee diagnosis code data.

In order to understand the significance of this, a review of the MA Program is in order.  Medicare Part C plans or MAPs are run by private health insurance companies and provide an alternative to the traditional Medicare Part A and B plans available to Medicare beneficiaries.  Medicare pays each Medicare Advantage Organization (MAO), a fixed amount each month, for its enrollees. The amount paid to the MAO is based on the assessment of “risk“ factors tied to the health of each enrollee in the plan. Since higher “risk” factors are associated with higher future care expenditures, MAOs are paid more for enrollees with higher risk factors than for those with lower risk factors. Diagnosis codes, pulled from the enrollees’ medical records, are used to determine the “risk” factor. CMS also requires the MAOs to certify the accuracy of the enrollees’ diagnosis codes in an effort to prevent over reporting of diagnosis codes that would lead to higher payments to the MAOs. Effective compliance programs are required in order to prevent fraud.

The Government’s complaint alleges in part that UnitedHealth used outside coding vendors to direct the chart reviews to identify information leading to a higher risk value, while ignoring information that would lead to a lower risk value. UnitedHealth’s failure to “look both ways” allegedly resulted in a violation of the FCA. In addition, UnitedHealth failed to implement an effective compliance program for internal monitoring and auditing of relevant data. A jury trial has been demanded.

CMS’s frustration with being overcharged is one that is shared by workers’ compensation plans when it comes to conditional payment demands.  A few days after the Government filed the above Complaint, the US District Court for the Central District of California, filed its decision in the case of California Insurance Guarantee Association (CIGA) v Thomas E. Price, Secretary of Health and Human Services. (2017 U.S.Dist. LEXIS 67589, May 3, 2017). This decision was issued after consideration of the parties’ briefs on the relief that should be provided to CIGA, given its motion for partial summary judgment.

Our earlier blog discussed the initial action filed by CIGA, which stemmed from CIGA’s objection to CMS’s three reimbursement demands for payments made on service dates that included both work injury related and non-work injury related treatment charges. Although CMS subsequently dropped the demands, CIGA sought a judicial declaration and permanent injunction barring CMS from calculating conditional payments in this way. CIGA argued that this practice was contrary to the MSP and Medicare’s regulations. CMS argued that the action was moot, since CMS was no longer seeking reimbursement. It also argued that CMS’s practice is based on a reasonable interpretation of the MSP and implementing regulations. The adequacies of CIGA’s pleadings were also challenged as well as their “programmatic attack” on Medicare.

The Court rejected all of CMS’s arguments and granted CIGA’s Motion for Partial Summary Judgment. Briefs outlining the relief that should be provided to CIGA were requested by the Court.

In the instant May 3, 2017 decision, the Court noted that CIGA sought the following relief:  an order vacating CMS’s conditional payment demands in the three claims, a judicial determination that CMS’s conditional payment billing process is unlawful and a permanent injunction that would prohibit CMS from sending future reimbursement demands to CIGA based on this unlawful conditional payment billing process. CMS disputed the appropriateness of the relief being sought.

The Court agreed to issue an order vacating and setting aside CMS’ conditional payment demands in the three underlying claims. It rejected CMS’s argument that the issue was moot, specifically pointing out that CMS may issue new demands based on the same underlying charges.

CIGA was also granted a limited judicial declaration that CMS’s interpretation of the MSP in regards to conditional payment reimbursement is unlawful.  It stated the following: “One ‘item or service’, as used in the Medicare Secondary Payer statute, 42 U.S.C. Section 1395 y(b)(2)(B)(ii), does not as a matter of law, equate to any medical items, devices, supplies, or services that appear under in a single line-item charge on a payment summary form issued by CMS. Rather a statutory ‘item or service’ simply refers to one indivisible medical item, device, medical supply or service, regardless of how it is billed.” It further stated: “Whether a particular line-item charge on a payment summary form contains more than one indivisible medical item, device, medical supply or service is a factual question that must be resolved on a case-by-case basis.” When a single line-item charge on a payment summary form contains multiple diagnosis codes, the presence of one code covered by the insurance policy administered by CIGA, “does not ipso facto make CIGA responsible for reimbursing the full amount of the charge.”  (p. 5) The Court however declined to prohibit CMS from continuing its practice, citing an incomplete record on summary judgment along with a mention of the possible role that HCPCS/CPT codes may play in the various line-item charges.

The Court further denied CIGAs request for permanent injunctive relief, finding that the evidence before it did not meet the four-factor test for it.  The matter was set for bench trial in September of 2017.


Billing and recovery systems that are based on data involving diagnosis codes and HCPCS/CPT codes are only as good as the underlying data. As we can see from the Government’s civil fraud action above, this type of data, is subject to manipulation by Medicare Advantage Organizations. Similarly, physicians involved in the treatment of Medicare patients may also engage in fraud by submitting bills for upcoded treatment. CMS’s practice of seeking conditional payment recovery for treatment for conditions that are unrelated to the underlying workers’ compensation claim is also inappropriate. CMS’s failure to recognize this and to continue to pursue such recovery is a bit akin to the “pot calling the kettle black.”

The judicial declaration issued in the above CIGA case provides parties with another tool to challenge CMS’s improper conditional payment recovery attempts.   As noted in our prior blog, these arguments may also apply to “future conditional payment” projections included in a CMS reviewed Medicare Set-Aside, e.g., payment for a physician’s visit that treats an accepted condition and a denied condition is not an acceptance of both conditions.

We continue to recommend that parties carefully examine the charges listed in CMS’s Statement of Reimbursement.  Since many workers’ compensation laws require parties to secure itemized bills from providers, these bills and supporting medical records should also be used to dispute over-inclusive conditional payment recovery claims. The direct right of appeal process is also available and should be used.

We will keep you advised of further developments.