Cases & Points Blog

October 24, 2017 – Consideration for Expansion of Medicare Set-Aside Arrangements (MSA)

The Centers for Medicare and Medicaid Services (CMS) continues to consider expanding its voluntary Medicare Set-Aside Arrangements (MSA) review process to include liability insurance (including self-insurance) and no-fault insurance MSA amounts. CMS will work closely with the stakeholder community to identify how best to implement this potential expansion of voluntary MSA reviews. Please continue to monitor this website for updates and announcements of town hall meetings in the near future.

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.

Arizona and Medicaid Law Updates: Is Your Claim or Medicare Compliance Strategy Impacted? Join Patrick Czuprynski October 18th, at 2 PM (EST)

Changes in Arizona and Medicaid laws are in effect in October. Register here to join our one hour webinar that will discuss these changes and how they can impact your claim and Medicare compliance strategy. The audience will learn which claims can be affected by the new Arizona law and what options are available for compliance with the Medicare Secondary Payer Act. Further, the audience will understand the implications of Medicaid’s new rules with respect to the collection of payments.

October Updates

Several changes that may impact your settlement approach in workers’ compensation and liability claims are being implemented in October. The changes involve Medicaid recovery, the ability to close out active medical care under the Arizona WCA provisions and CMS’ addition of a liability or no-fault MSA field to its Common Working File. Highlights of the changes are summarized below. Please refer to our earlier blog postings for a more in-depth analysis of the topics.

Medicaid Recovery

Medicaid, just like Medicare, is a secondary payer when a third party has a legal obligation to pay certain medical benefits to a beneficiary under the programs.  Before October 1, 2017, Medicaid’s recovery of its payments from the third party settlement was limited to the portion of the settlement that was allocated for future medical expenses.  With the October 1, 2017, implementation of the Bipartisan Budget Act of 2013, section 202, also known as the Medicaid Secondary Payer Act, Medicaid will now be allowed to recover its costs from a beneficiary’s total settlement. Given the various state reporting requirements relative to Medicaid beneficiaries, whether through data exchanges or intercepts, we can expect an increase in the amount of reimbursement efforts that will be undertaken by states Medicaid departments.  The anticipated decreases in federal contributions to the Medicaid programs will further fuel the recovery efforts.

Medicaid liens should be addressed in settlements and awards.  From a practical aspect, the ability to recover from the whole settlement will put Medicaid in a stronger lien negotiating position. Early negotiation efforts, however, that focus on the uncertainty of potential trial results absent settlement, will increase the ability to secure significant Medicaid lien reductions. A systematic claims’ handling approach for cases involving Medicaid liens, in addition to Medicare and Medicare Advantage liens, is recommended in order to prevent future issues with these entities.

Arizona’s Repeal of Section 23-941.01

Arizona’s repeal of Section 23-941.01 that limited the parties’ rights to settle out future medical care in undisputed claims will take effect on October 31, 2017.  This provision had prohibited the closure of active medical care, such as surgery, in undisputed claims and only allowed the release of future supportive medical maintenance benefits.

The amended Section 23-041.01 provision allows represented employees to settle future medical but requires the settlement to include the following attestation:

  1. “The employee understands the rights settled and released by the agreement and was represented by counsel.
  2. The employee has been provided information from the carrier, special fund or self-insured employer that outlines any reasonably anticipated future medical, surgical and hospital benefits relating to the claimant the projected cost of those benefits and that provides an explanation of how those projected costs were determined.
  3. The employee understands that monies received for future medical treatment associated with the industrial injury should be set aside to ensure that the costs of such treatment will be paid.
  4. The parties have considered and taken reasonable steps to protect any interests of Medicare, Medicaid, the Indian Health Service and the United States Department of Veterans Affairs, including establishing a Medicare Savings Account if necessary.
  5. The parties have conducted a search for and taken reasonable steps to satisfy any identified medical liens.”

When a claimant is unrepresented, the Administrative Law Judge will meet with the claimant to make specific findings regarding whether the above paragraphs are satisfied. Additional requirements and provisions for handling disputed claims are also set forth in the complete amendment.

The repeal will be effective from and after October 31, 2017. (Title 23, Chapter 6, article 3, Arizona Revised Statutes)

As of October 31, 2017, workers’ compensation claims in Arizona may completely close out all future medical rights under certain circumstances. This change presents a new opportunity for final resolution of many workers compensation claims. In order to pursue this, we recommend that the parties secure a future injury-related medical treatment allocation, identify and negotiate liens and fund the future medical allocation in connection with the settlement.

CMS’ addition of a liability or no-fault MSA field to its Common Working File.

As of October 1, 2017, CMS’ Common Working File will now reflect the existence of liability or no-fault MSAs in the system. Medicare Administrative Contractors will be instructed to deny payment of any submitted claims that pertain to the liability or no-fault MSA.

CMS’ addition of a liability or no-fault MSA in its Common Working File further suggests CMS’ interest in offering an eventual review of liability and no-fault MSAs.

NuQuest is available to assist in all types of lien resolution. Our product line also provides a variety of innovative future medical allocations that suit the needs of the claim. Further information is available upon request.

CMS Interprets the July 10, 2017 WCMSA Reference Guide, Version 2.6

CMS issued an updated WCMSA Reference Guide, Version 2.6 (Guide) on July 10, 2017.  The “State-Specific Statutes” provision under Section 9.4.5 Medical Review Guidelines notes CMS’ willingness to recognize WC state-specific statutes with the important caveat that “the submitter has demonstrated that Medicare’s interests have been adequately protected.” If a state-authorized utilization review board varied the treatment recommendation, CMS requested that the submission include an alternative treatment plan to replace the treatment deemed unnecessary by the utilization review board. Failure to include an alternative treatment plan would result in CMS reverting to its traditional projection model. The “State –Specific Statutes” provision also noted that submissions based on state-legislated time limits must be supported by a finding from the appropriate court or state entity that the specific case “does not meet the state’s list of exemptions to the legislative mandate.”

State-specific requirements and the criteria that must be met for the amended review are further discussed in Section 16.0 “Re-Review.” The Note under this section specifically states: “In the event the treatment has changed due to a state-specific requirement, a life-care plan showing replacement treatment for disallowed treatments will be required if medical records do not indicate a change.”

Recent CMS determinations and our CMS communications are providing data on CMS’ interpretation of the above provisions. The most significant change that we have seen involves the Independent Medical Review (IMR) in California. The IMR determination, if unchanged on appeal, is deemed to be the determination of the Administrative Director (AD) on the issue and binding on all parties. In the past, CMS would defer to the findings of the IMR and exclude the denied treatment or drugs in question.

Since the updated Guide was put out, we have seen CMS include IMR denied care citing a lack of replacement treatment options.  Further clarification noted:  “The CMS position is not whether a carrier demonstrates liability, but whether Medicare would reasonably pay for something in the future that should have been covered as it related to the WC claim.”  In situations involving denied treatment, CMS seeks an “alternative treatment that would be acceptable through the IMR process.” A position that no further care is appropriate appears unacceptable to CMS if the treating physician is recommending care.

In light of CMS’ current interpretation of the IMR and utilization reviews, submissions should include an alternative treatment plan. Although utilization reviews generally consider the medical necessity or reasonableness of a specific treatment, the replacement treatment for disallowed treatments can be provided by the AME/PQME physician or by a different type of “state-authorized” utilization review board. Replacement treatment plans may also look to state specific medical treatment guidelines for the conditions.  Opting out of the voluntary CMS review process also remains a viable option. We will keep you advised of further developments.