Taking Medicare s interest into account: Reporting and Medicare Set Asides

Transcription

1 Taking Medicare s interest into account: Reporting and Medicare Set Asides 9/28/2009 meant to be legal advice but are 1

2 Taking Medicare s Interests Into Account: Mandatory Insurer Reporting 9/28/2009 meant to be legal advice but are 2

3 The Medicare, Medicaid, and SCHIP Extension Act of 2007 Applicable plans include liability insurance, including self-insurance, no fault insurance, and workers compensation laws or plans. 42 USC Section 1395y(b)(8)(F). Claimants include individuals filing a claim against an applicable plan and individuals filing a claim against an individual or entity insured or covered by the applicable plan. 42 USC Section 1395y(b)(8)(D). Applicable plans shall determine whether a claimant is entitled to Medicare benefits on any basis, and if so entitled, submit information required by the HHS Secretary. 42 USC Section 1395y(b)(8)(A). The required information includes the identity of the claimant, and any such other information as the Secretary shall specify in order to make an appropriate determination concerning coordination of benefits, including any applicable recovery claim. 42 USC Section 1395y(b)(8)(B). An applicable plan that fails to comply with these requirements shall be subject to $1,000 penalty for each day of noncompliance with respect to each claimant. 42 USC Section 1395y(b)(8)(E). $35,000,000 are appropriated to CMS for 2008, 2009, and 2010 to implement program. 42 USC Section 1395y(c). 9/28/2009 meant to be legal advice but are 3

4 Mandatory Insurer Reporting Implementation Time Line 01/01/09-06/30/09 - Recommended systems development period. 05/01/09-09/30/09 - Electronic registration via the Coordination of Benefits Secure Web Site (COBSW) for all Liability/No-Fault/Workers Compensation Responsible Reporting Entity (RRE). 01/01/10-03/31/10 - Testing period for all Liability/No- Fault/Workers Compensation RREs. 04/01/10-06/30/10 - All Liability/No-Fault/Workers Compensation RREs submit their first Section 111 production files based upon a predetermined schedule with the COBC. 9/28/2009 meant to be legal advice but are 4

5 Interim Reporting Thresholds Ongoing Responsibility for Medicals (ORM) refers to the RRE s responsibility to pay, on an ongoing basis, for the injured party s medicals associated with a claim. This typically only applies to no-fault and workers compensation claims. Total Payment Obligation to the Claimant (TPOC) refers to the dollar amount of a settlement, judgment, award, or other payment in addition to/apart from ORM. 1. For no-fault insurance, there is no minimum dollar threshold for reporting the assumption of ORM or for reporting TPOC. 2. For liability insurance (including self-insurance), there is no minimum dollar threshold for reporting the assumption of ORM. 3. For workers compensation ORM, claims meeting all of following criteria are excluded from reporting for file submissions due through December 31, 2010: a. Medicals only. b. Lost time of no more than 7 calendar days. c. All payment(s) has/have been made directly to the medical provider. d. Total payment does not exceed $ For liability insurance (including self-insurance), and workers compensation TPOC, the following thresholds exemptions apply: a. 01/01/10 12/31/10 - $ $5, are exempt from reporting. b. 01/01/11 12/31/11 - $ $2, are exempt from reporting. c. 01/01/12 12/31/12 - $ $ are exempt from reporting. 9/28/2009 meant to be legal advice but are 5

6 COB Secure Web Site Registration Process The registration process requires Responsible Reporting Entities (RREs) to provide notification to the COBC of their intent to report data to comply with the requirements of Section 111 of the MMSEA. Registration by the responsible reporting entity is required and must be completed before testing between the RRE (or its agent) and the COBC can begin. Liability insurance (including self-insurance), no-fault insurance and workers compensation RREs will register on the COBSW starting on May 1,

7 COBSW Registration RRE Information The RRE application will ask that you submit: A Federal Tax Identification Number (TIN) for the RRE. Company name and address. Company authorized representative contact information (name, job title, address, address, phone). National Association of Insurance Commissioners (NAIC) company code, if applicable. Reporter Type (GHP or Liability/No-Fault/Worker s Compensation). Optional Subsidiary company information to be included in the file submission for the registration (names, TINs, NAIC company codes for the subsidiaries). 7

8 Coordination of Benefits Secured Website Users Responsible Reporting Entity. Authorized Representative. Account Manager. Account Designee. Agent. 8

9 Responsible Reporting Entities The registration process requires responsible reporting entities (RREs) to provide notification to the COBC of their intent to report data to comply with the requirements of Section 111 of the MMSEA. Registration by the responsible reporting entity is required and must be completed before testing between the RRE (or its agent) and the COBC can begin. Each RRE must assign or name an Authorized Representative. This is the individual in the RRE organization who has the legal authority to bind the organization to a contract and the terms of MMSEA Section 111 requirements and processing. The Authorized Representative has ultimate accountability for the RRE s compliance with Section 111 reporting requirements. 9

10 COB Secure Web Site Registration Process The registration process requires Responsible Reporting Entities (RREs) to provide notification to the COBC of their intent to report data to comply with the requirements of Section 111 of the MMSEA. Registration by the responsible reporting entity is required and must be completed before testing between the RRE (or its agent) and the COBC can begin. Liability insurance (including self-insurance), no-fault insurance and workers compensation RREs will register on the COBSW starting on May 1,

11 COBSW Registration RRE Information The RRE application will ask that you submit: A Federal Tax Identification Number (TIN) for the RRE. Company name and address. Company authorized representative contact information (name, job title, address, address, phone). National Association of Insurance Commissioners (NAIC) company code, if applicable. Reporter Type (GHP or Liability/No-Fault/Worker s Compensation). Optional Subsidiary company information to be included in the file submission for the registration (names, TINs, NAIC company codes for the subsidiaries). 11

12 Coordination of Benefits Secured Website Users Responsible Reporting Entity. Authorized Representative. Account Manager. Account Designee. Agent. 12

13 Responsible Reporting Entities The registration process requires responsible reporting entities (RREs) to provide notification to the COBC of their intent to report data to comply with the requirements of Section 111 of the MMSEA. Registration by the responsible reporting entity is required and must be completed before testing between the RRE (or its agent) and the COBC can begin. Each RRE must assign or name an Authorized Representative. This is the individual in the RRE organization who has the legal authority to bind the organization to a contract and the terms of MMSEA Section 111 requirements and processing. The Authorized Representative has ultimate accountability for the RRE s compliance with Section 111 reporting requirements. 13

14 The Agent RREs may use agents to submit data on their behalf. An agent is a data services company, consulting company, or the like that can create and submit Section 111 files to the COBC on behalf of the RRE. Information on the use of agents is required as part of the Section 111 registration process. 14

15 COB Mandatory Insurer Reporting File Type Claim Input File TIN Reference File Claim Response File Query Input File Query Response File 9/28/2009 meant to be legal advice but are 15

16 The Mandatory Insurer Reporting Process Case Intake Decision on Information Exchange Format Agent Collects Query Information from RRE and Submits Query Input File to CMS CMS Submits Query Response File to Agent Agent Collects Claim Information from RRE RRE COB Secure Web Site Registration Account Manager Appoints Account Designee and Agent Agent Submits Claim Input File to CMS CMS Submits Claim Response File to Agent RRE Assigns Authorized Representative Authorized Representative Assigns Account Manager Agent Resubmits Query and Claims File Information ORM/TPOC on Quarterly Basis 9/28/2009 meant to be legal advice but are 16

17 Pre-Section 111 CMS Workers Compensation Program Liability Claimant Claimant Attorney Attorney 9/28/

18 Post Section 111 CMS Section 111 Workers Compensation Program Liability Claimant Claimant Attorney Attorney 9/28/

19 Taking Medicare s Interests Into Account: Medicare Set Aside Allocations, Approval, and Administration 9/28/2009 meant to be legal advice but are 19

20 42 USC Section 1395y(b)(2) Payment under this subchapter may not be made, except as provided in subparagraph (b), with respect to any item or service to the extent that (I) payment has been made, or can reasonably be expected to be made, with respect to the item or service as required under paragraph (I) under a workmen s compensation law or plan of the United States or a State or under an automobile or liability insurance policy or plan (including a self-insured plan) or under no fault insurance. 1395y(b)(2)(A). In this subsection, the term primary plan means a group health plan or large group health plan, to the extent that clause (I) applies, and a workmen s compensation law or plan, an automobile or liability insurance policy or plan (including a self-insured plan) or no fault insurance, to the extent that clause (ii) applies. 42 USC Section 1395y(b)(2)(A). In order to recover payment under this subchapter for such an item or service, the United States may bring an action against any entity which is required or responsible (directly, as third-party administrator, or otherwise) to make payment with respect to such item or service under a primary plan, or against any other entity (including any physician or provider) that has received payment from that entity with respect to the item or service, and may join or intervene in any action related to the events that gave rise to the need for the item or service. 42 USC Section 1395y(b)(2)(B). 20

21 42 CFR Sections through Medicare benefits are secondary to benefits payable by a third party payer even if state law or the third party payer states that its benefits are secondary to Medicare benefits or otherwise limits its payments to Medicare beneficiaries. 42 CFR Section If a lump-sum compensation award stipulates that the amount paid is intended to compensate the individual for all future medical expenses required because of the work related injuries or diseases, Medicare payments for such services are excluded until medical expenses related to the injury or disease equal the amount of the lump-sum payment. 42 CFR Section If a settlement appears to represent an attempt to shift to Medicare the responsibility for payment of medical expenses for the treatment of a work-related condition, the settlement will not be recognized. If the settlement agreement allocates certain amounts for specific future medical services, Medicare does not pay for those services until medical expenses related to the injury or disease equal the amount of the lump-sum settlement allocated to future medical expenses. 42 CFR Section Medicare does not pay for (1) services for which payment has been made or can reasonably be expected to be made under automobile no-fault insurance. (2) services furnished on or after November 13, 1989 for which payment has been made or can reasonably be expected to be made under any no-fault insurance other than automobile no-fault. 42 CFR Section This section applies when a beneficiary has received a liability insurance payment or has a claim pending against a liability insurer for injuries or illness allegedly caused by another party. 42 CFR Section

22 CMS Policy Memorandums July 23, 2001 Memo. April 21 and May 23, 2003 Memos. May 7 and October 15, 2004 Memos. July 30 and December 30, 2005 Memos. April 25 and July 24, 2006 Memos. May 20 and August 25, 2008 Memos. April 3, 2009 Memo. 22

23 Medicare's Handling of Settlements Workers' Compensation Commutation Settlements. Compromise Settlements. Liability Automobile Liability Insurance. Uninsured and Underinsured Motorist Insurance. Homeowner's Liability Insurance. Malpractice and Product Liability Insurance. General Casualty and No-Fault Insurance. 23

24 Medicare Payments Made While Claim is Open Medicare insists, without question or doubt, that any payments it makes for medical services in an open claim are to be reimbursed as part of the settlement of the claim. There is no controversy about this issue. If the parties are settling a claim, they must ensure any Medicare payments for medical services related to the injury are reimbursed as part of the settlement. If the parties fail to do this, Medicare will pursue reimbursement from all sources, including the attorneys. 24

25 Current Medicare Beneficiaries If the claimant is a current Medicare beneficiary at the time of settlement, Medicare requests that the settlement and allocation be submitted for approval only if the settlement is for more than $25,000. While Medicare recognizes that there is no statutory basis for the mandatory request, the stated benefit to the Medicare beneficiary is that once an allocation is approved, future Medicare coverage is assured after the approved allocation has been properly exhausted. If a current Medicare beneficiary and settlement is for less than $25,000, must still take Medicare s interest into account, but no CMS approval necessary. 25

26 Medicare Eligible Within 30 Months of Settlement If the claimant is not yet a Medicare beneficiary, but can reasonably be expected to become Medicare-eligible within 30 months of the settlement and the settlement is above $250,000, Medicare expects that its interests will be taken into account by making a reasonable allowance for the future projected costs and obtaining CMS approval of same. If such an allowance is not made in the form of an allocation or setaside arrangement for future medicals, Medicare may claim the entire settlement amount as an allowance for medicals. And, Medicare will not pay for any medical services that may be linked to the injury until the entire settlement amount is exhausted. If the claimant is reasonably expected to become Medicare-eligible within 30 months of the settlement, but the settlement is less than $250,000, Medicare s interests must be taken into account; however, no CMS approval is necessary. 26

27 No Expectation of Becoming Medicare Eligible If the Claimant is not a current Medicare beneficiary, is not expected to become a Medicare beneficiary within 30 months following the settlement, and the total settlement amount is less than $250,000, Medicare s position is that they waive any interest in the settlement. However, Medicare officials have warned that this waiver is always subject to the Office of General Counsel review and change, as Medicare s interests must always be taken into consideration. 27

28 MSA Allocation Process The amount of money placed in a Medicare set-aside is not negotiable between the claimant, employer, defendant, and insurer. Allocation experts perform in-depth evaluations of the injured party s medical records to determine the future medical treatment anticipated. Medicare regulations determine what part of that treatment Medicare would normally cover, as that is the only treatment for which money must be set aside. Based upon the claimant s age, pre-existing medical conditions, accident/injury related medical conditions, and recommended medical care, claimant s life expectancy is determined, including the potential for a rated age. A projection is then made of the likely expenses for the covered treatment based upon the applicable medical reimbursement fee schedule and claimant s life expectancy. This is the amount that should be placed in the Medicare set-aside. 28

29 The MSA Allocation Process Case Intake Recommended Future Medical Care Related to Accident/Injury Contrast Recommended with Medicare Allowed Future Medical Care If Not Already Reported, Report Case to CMS Along With Releases Review of Medical Records to Learn of Related vs. Pre-existing Medical Conditions Creation of Proposed Medicare Set Aside Allocation Collect minimum of 2 Years of Medical Treatment and Claim Payment Information Provide Medical Records to Life Insurance Company for Life Expectancy Determination Obtain Approval from Client for Proposed MSA Allocation 9/28/2009 meant to be legal advice but are 29

30 The MSA Allocation Time Frame Case Intake 5 Days Life Expectancy and Future Medical Care Determination 10 Days Proposed Medicare Set Aside Allocation 10 Days Client Approval on Proposed MSA 5 days 9/28/2009 meant to be legal advice but are 30

31 Medicare Set Aside Approval Pre-Existing Medical Conditions. Accident/Injury Related Medical Treatment and Prescription Medication. Medicare Approved Accident/Injury Related Future Medical Recommendations. Life Expectancy. Medicare Set Aside Allocation. Settlement and Funding of Medicare Set Aside. CMS Approval of Medicare Set Aside. 31

32 The MSA Approval Process Obtain Approval from Client for Proposed MSA Allocation If Proposed MSA Allocation Approved by CMS, Forward Approval Letter to Parties If Proposed MSA Allocation Rejected by CMS, Review CMS MSA Allocation Submit Proposed Medicare Set Aside Allocation to CMS for Approval Provide CMS with Factual, Medical, and Legal Basis for Proposed MSA Allocation If CMS MSA Allocation Appropriate, Accept Same Communicate with CMS Regarding Any Records or Evidence Necessary Provide CMS with Any Records or Evidence Necessary If CMS MSA Allocation Incorrect, Resubmit Records, Evidence, and Argument Highlighting Error 9/28/2009 meant to be legal advice but are 32

33 The MSA Approval Time Frame Client Approval 5 Days Submission of MSA Allocation to CMS 5 Days Communications with CMS Days MSA Approved by CMS 30 to 180 days 9/28/2009 meant to be legal advice but are 33

34 MSA Administration Process Self Administered MSA. Professionally Administered MSA. Accident/Injury Related Medical Care/Prescriptions Only. Must be Medicare Covered. Payment per CMS Approval State WC Fee or Usual/Customary. Reporting and Accounting to CMS Annual and Exhaustion. Death of Claimant Payment of Outstanding Bills and Remaining Account Balance. 34

35 MSA Administration Responsibilities MSA Funds in Interest Bearing Account. Interest Earned Used for Related Expenses. Used only for Accident/Injury Related Expenses Approved by Medicare. Only Exceptions are Copying Charges, Postage, Banking Fees, and Income Tax on Interest. Accurate Records of All Transactions. Date of Service, Name and Address of Provider, Procedure Performed, Amount Paid, Date of Payment, Proof of Service and payment. Self-Attestation that No Funds Have Been Misappropriated. If so, Reimbursement to Medicare. Annual and Final Reporting and Accounting to MSPRC at PO Box Detroit, Mich Distribution Following Death of Beneficiary per Settlement Agreement, per State Law, or Beneficiary s Estate. 35

36 The MSA Administration Process Case Intake Research Appropriate Medical Fee Schedule for Payment per CMA Approval Make Payment to Physician, Facility, or Provider Directly. Obtain MSA Allocation, CMS Approval, and Settlement Documents Upon Receipt of Medical Bill, Verify Related to Accident, Medicare Allowable On Annual Basis, Account for All Deposits and Expenses in MSA Account to CMS Obtain Correct Funding for MSA Account per CMS Approval Correspond with All Treating Physicians and Prescription Drug Providers Upon Death or Exhaustion of Funds, Account for All Deposits and Expenses in MSA Account to CMS 9/28/2009 meant to be legal advice but are 36

37 Thank You Daniel A. Alvarez, Sr., Esq. The Center for MSA Administration 4912 Creekside Drive Clearwater, Florida Toll Free (800) Phone (727) Fax (727) /28/2009 meant to be legal advice but are 37