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.

The California WCAB Considers the Administration of a WCMSA in Muniz Villalpando Case

The administration of a Workers’ Compensation Medicare Set Aside (WCMSA) was considered in a recent California Workers’ Compensation Appeals Board (WCAB) decision.  In the Muniz Villalpando v Doherty Brothers; Martin Dusters; State Compensation Fund  case,  ( 2017 Cal. Wrk. Comp.P.D.Lexis ADJ599176, 2396484, 795039),  the applicant sought reconsideration of the workers’ compensation law judge’s (WCJ) denial of his request to change the administration of his WCMSA funds from a professionally administered account to one that was self-administered . The WCAB returned the matter to the trial level so that the WCJ may review the terms of the professional administration contract that address a change in administration.

By way of background, applicant Muniz Villalpando settled his claims in August of 2011. The settlement terms included the funding of the CMS determined WCMSA and the parties’ agreement that the WCMSA be professionally administered through Bridge Pointe. In December of 2016, Muniz Villalpando filed a pro se Petition for Reconsideration before WCJ Ortega. The issues addressed in the hearing involved the appropriateness of the administration, the WCAB’s jurisdiction to set aside the MSA and the appropriateness of self-administration of the WCMSA.

During the hearing, the defense presented testimony from a Bridgepointe /NuQuest witness regarding the types of payments that may be properly made from a WCMSA fund. Since the payments may only be for injury related and Medicare covered services and drugs, services that did not meet this two prong test may not be paid from the WCMSA account.  In denying Muniz Villalpando’s Petition for Reconsideration, WCJ Ortega noted that Bridge Pointe/NuQuest did not inappropriately manage their custodial obligations within the Compromise and Release settlement agreement.  In light of this, no further issues were addressed by WCJ Ortega.

The WCJ Ortega recommendation highlights the challenges that some claimants may face when attempting to administer their own WCMSA accounts. Not every treatment is Medicare covered or related to the workers’ compensation claim. CMS’ specific guidelines that address the proper administration of a Medicare Set Aside (MSA) account must also be followed. We will keep you advised of further developments in this case.

November 17, 2016 CRC Teleconference Summary

On November 17, 2016, the Commercial Repayment Center (CRC) provided a teleconference regarding coordination and recovery of payments made by Medicare related to liability, no-fault or workers’ compensation claims.

The Benefit Coordination and Recovery Center (BCRC) is responsible for collecting payments made by Medicare from a claimant. The CRC is responsible for recovery of conditional payments against an “applicable plan.” An applicable plan is an insurance carrier or workers’ compensation entity that has been identified as responsible for reimbursement for payments made by Medicare. Additionally, an applicable plan may have certain reporting requirements under Section 111 reporting.  This may include requirements of “Ongoing Responsibility for Medical” (ORM reporting) or reporting Total Payment Obligation to Claimant (TPOC) to CMS through a sophisticated web portal.

During the teleconference, CRC discussed internal development in processing recovery of claims. Regarding past issues with unrelated diagnosis codes being included in conditional payment notices and letters, CRC advised the “grouper,” which was providing the unrelated treatments, was adjusted and is now providing summary forms (showing payments made by Medicare) with improved accuracy. The manual oversight of the summary forms is still being conducted to monitor the accuracy of the recovery letters. However, resources for the grouper oversight are being reduced based upon the improved accuracy. CRC also advised that it is “caught up” on their processes except for post initial determination replies.

Time Frames: Additionally CRC advised its target time-frames for responding to certain requests:

  • 45 days to provide conditional payment information when proper authorization is on file and CRC has the lead information to develop the file
  • Reply to Conditional Payment Notices within 30 days
  • Reply to Conditional Payment Letter within 45 days
  • Reply to post determination dispute within 60 days
  • Acknowledge reimbursement of conditional payments within 20 days.

Intent to Refer to U.S. Treasury for Collections: If conditional payments are not reimbursed to Medicare and there is no pending appeal, CRC will refer the debt to collections by the U.S. Treasury Department.  The CRC has advised that it will send an intent to refer a debt to collections by the U.S. Treasury department letter as a reminder to itself and the parties there is an outstanding balance related to a claim. These are commonly referred to as “intent to refer” letters. If an intent to refer letter is received, a response should be prepared. A carrier/employer should review the correspondence as this may be an indication that an appeal was not received or an appeal was decided without proper notice by CMS. In the circumstances of accepted claims, reimbursement may have not been received or processed properly.

Web Portal: The CRC highlighted additional functions that will be available in the first quarter of 2017 through the Medicare Secondary Payer Recovery Portal (MSPRP). This included the addition of information regarding conditional payment balance and refund status. Further, the web portal can be used to file an appeal of the initial determination and obtain status updates regarding the redetermination.

Authorization:  The CRC encouraged the industry to use the web portal to upload authorizations and to use the web portal to obtain status updates regarding disputes and pending appeals. Authorization for a vendor or third party to communicate on behalf of an applicable plan must be provided on each claim. Additionally, the CRC stressed the importance of proper authorization. Specifically, the CRC advised that in situations where there is a settlement of the liability or workers’ compensation claim and the TPOC is reported to CMS, the BCRC will list the beneficiary as the debtor and request reimbursement from the beneficiary. This process requires special attention by the industry and authorization from the beneficiary in order negotiate the payments made by Medicare will be required.

BCRC will also pursue recovery from the beneficiary when the parties use the final demand and dispute process available on the web portal. This process allows the parties to the claim to obtain a final demand prior to settlement, but involves a highly coordinated process requiring approval of settlement three days from downloading CMS final demand and providing settlement within 30 days thereafter. If the parties do not meet the entire requirements of the process, the downloaded final demand is invalid. Additionally, this process may only be attempted once per claim.

Helpful Tips by CRC: At the end of the presentation, CRC provided some helpful tips in order to allow CRC to process conditional payment searches efficiently:

  • Accurate section 111 reporting, including proper ICD9 and ICD10 codes, initiation and termination of ORM
  • Sending correspondence to CRC’s proper address
  • Attaching letters of authorization to any documents submitted to CRC
  • After a TPOC report, the case goes to BCRC and correspondence is sent to the beneficiary and may not be sent to the applicable plan. Authorization from the beneficiary is needed to negotiate conditional payments.

One important take away from CRC’s presentation is the importance of proper authorization by the applicable plan, section 111 reporting entity, the beneficiary, the third party administrators, and MSA vendors in order to expedite and resolve payments by Medicare that require reimbursement. If possible, such terms to cooperate should be included into a claim’s settlement discussions.

Regardless of whether BCRC is pursuing reimbursement for conditional payments against the beneficiary, the Medicare compliance industry as a whole must keep in mind that Medicare is allowed to pursue collection against the applicable plan if the beneficiary does not reimburse Medicare.  Therefore, although BCRC may be addressing the beneficiary, the applicable plan is still at risk for reimbursement.  We will keep you posted with any further developments.