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The CMS Again Delays Section 111 MIR Implementation Deadline |
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Industry News Updates
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Thursday, 18 February 2010 11:36 |
By Tom Matson
The Centers for Medicare and Medicaid Services (CMS) has once again delayed the final implementation deadline for Section 111 Mandatory Insurer Reporting (MIR) compliance. On February 16, 2010, the CMS advised all Non-Group Health Plan Responsible Reporting Entities (NGHP RREs) that the date for first production NGHP Input Files has been changed from April 1, 2010 to January 1, 2011.
The notice went on to state that testing of NGHP file data exchange will continue and all testing will be completed by December 31, 2010. It also stated that all NGHP RREs should now be registered with the COBC and either participating in or preparing for file testing status. The CMS is encouraging those NGHP RREs that have completed data exchange testing to proceed to production file data exchange status.
The notice advised that the next version of the NGHP User Guide will be posted on the CMS website during the week of February 22, 2010. An alert is also forthcoming that will list the necessary steps NGHP RREs can take to assure their compliance with Section 111 reporting requirements.
To view this latest alert in its entirety, please click here. |
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Trade Groups Ask HHS to Delay MSP Reporting Requirement Deadline |
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Industry News Updates
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Thursday, 11 February 2010 15:34 |
By Tom Matson
Three insurer trade organizations have sent a joint letter to the Secretary of Health and Human Services, Kathleen Sebelius, seeking to extend the April 1, 2010 implementation of the Medicare Secondary Payer (MSP) mandatory insurer reporting (MIR) requirement. This letter outlines five major reasons as to why the Department of Health and Human Services should consider extending the deadline:
- Reporting Guidance: the Centers for Medicare and Medicaid Services (CMS) has yet to issue final guidance on some issues.
- Collection of Social Security Numbers (SSN) or Health Insurance Claim Numbers (HICN): insurance and self-insured companies are concerned about the inability to obtain critical data elements such as SSNs or HICNs.
- Confidentiality and Security of the Data: there are still serious concerns that the CMS is not using the most effective security and encryption technology to ensure the data submitted is properly secured.
- Inadequate testing period: there are concerns that the testing period CMS used was too short for required reporting entities (RREs) and CMS to properly ensure that their systems were operational prior to the reporting deadline.
- Penalties: there is a belief that the $1000 per day, per claim penalty is excessive. There is further belief that this penalty should not be enforced on the initial reports submitted by RREs.
If successful, this would represent the third extension since Section 111 of the Medicare, Medicaid, SCHIP Extension Act of 2007 (MMSEA) first called for MIR compliance.
To read the letter in its entirety, please click here. |
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U.S. Flexes MSP Recovery Muscles with US v. Stricker |
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Industry News Updates
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Wednesday, 10 February 2010 11:24 |
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By Tom Matson On December 1, 2009, the US Department of Justice, on behalf of the Secretary of Health and Human Services, filed a civil action to recover conditional payments that were made to approximately 907 Medicare beneficiaries involved in a $300,000,000 class action liability lawsuit named the Abernathy Settlement. Defendants include plaintiff attorneys, Travelers Indemnity Company, AIG, Monsanto Company, Pharmacia Corporation, and Solutia, Inc. The suit alleges that the defendants had an obligation under 42 CFR §411.25 to notify Medicare of any settlement, judgment, award or other payment that was made when the case was resolved, and to reimburse Medicare for these conditional payments at the time of settlement, but failed to do so. It also claims that it does not matter that these defendants paid out the settlement proceeds, as 42 CFR §411.24(i) allows Medicare to seek payment from the liability insurance carrier regardless of whether payment has already been made to the Medicare beneficiary. The US is seeking reimbursement of these funds along with double damages plus interest.
On January 28, 2010, the United States filed a motion for partial summary judgment on liability against a portion of the defendants named above. Within this most recent motion, the U.S. attempts to show the following:
- The underlying plaintiffs in the Abernathy case asserted and released medical claims in that action.
- Medicare made conditional payments on behalf of Medicare beneficiaries who were among the plaintiffs.
- The corporate defendants (Monsanto, Solutia and Pharmacia) are responsible primary plans under the MSP statute and required to reimburse Medicare for its conditional payments.
- Several firms and attorneys representing Abernathy plaintiffs received funds as part of the Abernathy settlement and are therefore liable as entities that received payment from a primary plan, and are therefore also required to reimburse Medicare for its conditional payments.
The United States performed a search of its official records for all conditional payments made on behalf of 907 Medicare beneficiaries involved in the Abernathy case from 1991 to 2009, and discovered that these payments totaled $67,156,770.01. The U.S. is arguing that the Medicare Secondary Payer (MSP) Statute requires that primary plans (Monsanto, Solutia, and Pharmacia) and entities that receive payment from those plans (James J. Stricker, Daniel R. Benson, the law form of Kasowitz, Benson Torres & Friedman, and Donald W. Stewart) shall reimburse the Medicare Trust Funds for Medicare’s conditional payments made on behalf of its beneficiaries.
While U.S. v. Stricker is most certainly a noteworthy case, it is just one of several recent developments in the MSP arena that indicate a new trend is on the horizon. Most would agree that with the implementation of Mandatory Insurer Reporting (MIR), the United States government will have unprecedented access to settlement information. However, when MIR is coupled with U.S. v. Harris and U.S. v. Stricker, it is evident that from this point forward extreme caution must be exercised when settling claims involving Medicare beneficiaries, particularly those claims where Medicare has made conditional payments. These actions should be viewed as a “shot over the bow” from the U.S. government warning those involved in any type of injury settlement that their interests should not be ignored as they have been for the past 30 years.
To view U.S. v. Stricker in its entirety, please click here
To view U.S. v. Harris in its entirety, please click here
To view U.S. v. Stricker Motion for Summary Judgment, please click here |
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Medicare Set-Aside (MSA) Account Administration: When To Call In the Professionals |
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Articles
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Monday, 25 January 2010 13:57 |
Posted by Douglas M. Brand, CSSC
CEO & President, Medivest Benefit Advisors, Inc.
Many times, one of the last of many difficult decisions to be made in the settlement process is how to administer the Medicare Set-Aside (MSA) monies. Unfortunately, this decision is perhaps the least understood of all the MSA issues. How does each choice protect the interests of Medicare, the claimant, the insurance company, and the lawyers? What are the risks and exposures involved? How do I decide what path to take or how to advise my client?
First of all, you have three basic choices to consider: (1) professional administration, (2) give assistance to the claimant via a self-administration kit, purchased from a professional MSA company or (3) let the claimant administer the funds without assistance.
Professional Administration
A professional administration company, like Medivest, will ensure that all the complex rules established by the Centers for Medicare and Medicaid Services (CMS) for administering MSA’s are complied with. For example, they will establish an interest bearing bank account, pay only Medicare allowable and injury related medical bills, communicate with medical providers, complete all the required accounting to CMS, make sure that all bills are paid according to the required fee schedules. They will also provide phone support and comprehensive transparent accounting to the claimant. Professional administration companies preserve and protect the settlement money and prevent “dissipation risk” (a fancy term that essentially means the risk of money being spent on things other than what its intended for).
Why does all this CMS compliance matter, post-settlement, to anyone except the claimant, you might ask? Well, as it turns out it matters a lot to all parties to the settlement. Medicare can suspend the claimant’s Medicare benefits if the monies are not spent according to the strict CMS guidelines. That could be devastating to the injured person who needs medical care. Not taking Medicare’s interest into consideration, as required by the Medicare Secondary Payer (MSP) Statute, could be a basis for a claimant’s potential claim against the attorney for negligent representation. Also CMS has the right to audit the injured person’s settlement and the Medicare Secondary Payer (MSP) Statute gives strong recovery rights against the defendant (double damages incurred by Medicare plus interest) if it finds it’s interest was not properly considered.
So, in what situations should professional administration be considered? Essentially, CMS requires professional administration if the injured person is mentally or physically incapable of managing the account or complying with the CMS administration requirements, has been declared legally incompetent, or has been assigned a representative payee by the Social Security Administration and the representative payee elects not to serve as administrator of the MSA. Professional administration is recommended for most large settlements and when the injured person has very serious medical conditions, lower education level, or any personal issues that put the funds at-risk. Sometimes professional administration is the “right thing to do” because it provides the claimant peace of mind from the stress of self-administration and dissipation risk.
There are fees associated with professional administration and, unfortunately, CMS does not allow them to be paid from the settlement funds. Therefore, they have to be negotiated at settlement. However, in many cases the cost savings from professional bill review practices will more than offset the fees. Also, funding the fees with a structured settlement annuity can offset the cost of the fees.
Self-Administration With a Kit
A Self-Administration Kit may be appropriate in those cases where the claimant is competent to administer their own MSA account but needs some support from a professional administration company. This kit provides valuable tools to assist the claimant including: a detailed do-it-yourself manual, unlimited phone support and some even provide bill review services and a lifetime pharmacy/DME discount program. The average cost of these kits is about $750-$1,000 per year.
Self-Administration Without a Kit
MSA self-administration is not a simple undertaking. It involves complex compliance with government rules and regulations, accounting expertise and discipline. Additionally, it puts many injured parties in the untenable position of not being capable of complying with Medicare’s requirements while being threatened with the loss of Medicare benefits if they don’t. It should be used sparingly and only in those cases with low dollar settlements or with competent claimants who don’t need any assistance from a professional.
It is important to understand and plan for the MSA administration issues early on in the settlement process because it is a key component to the entire settlement. |
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