PMSI - Settlement Solutions PMSI - Settlement Solutions

Another Year Without Appeal Rights in Workers Compensation Medicare Set Asides

By , December 11, 2014 11:26 am

Insurance LawFrom the very beginning of the Workers’ Compensation Medicare Set-Aside (WCMSA) process, one of the consistent requests by both claimants and employer/carriers has been the inclusion of a review process that would allow both sides the opportunity to challenge Medicare’s decision on a set aside allocation. As Medicare began to require inclusion of prescription medications in WCMSAs, parties began to see their MSAs rejected by CMS more frequently and instead began receiving more and more counter-higher demands from Medicare, sometimes asking for double and triple the amount previously submitted to CMS for approval, and oftentimes even larger than the settlement amount reached by the parties and approved by the workers compensation judge or state commission.

For more than ten years, many of us involved in the MSA industry have been asking CMS for an appeals process that would allow the parties to question the reasonableness of Medicare’s counter-higher demands, and allow the parties to explain the rationality of their proposal. As a result, when the Centers for Medicare and Medicaid Services (CMS) announced its proposed expansion of the WCMSA Re-Review process on February 11, 2014, indicating that all requests for re-review would be handled by the Workers’ Compensation Review Contractor (WCRC) and resolved within 30 business days, I, along with many of our industry professionals, thought we were finally going to have an appeals process in the WCMSA program.

The announcement indicated that “the WCRC would direct the request for re-review to an internal group of experts skilled to review the identified issue. The experts that perform the re-review would not be the same specialists involved in the original determination. In certain situations, a re-review may be elevated by the WCRC to a CMS Regional Office. This level of review would occur in situations such as: failure to adhere to court findings; CMS policy disputes; carrier maintains Ongoing Responsibility for Medicals for treatment that has been included in approved WCMSA, etc.”

The announcement indicated that “CMS proposed to keep the limited current process, allowing for re-review requests to the WCRC at any time if a mathematical error was identified in the approved set-aside amount, or if the original submission included case records for another beneficiary.” In addition, CMS proposed to allow request for re-review submitted to the WCRC if “the original WCMSA was approved within the last 180 days; the case had not settled; no prior re-review request had been previously submitted for the at issue WCMSA; and, the re-review requested a change to the approved amount of 10% or $10,000 (whichever is more) for any of the following reasons:

  • Submitter disagreed with how the medical records were interpreted.
  • Medical records dated prior to the submission date were mistakenly omitted.
  • Items or services priced in the approved set-aside amount were no longer needed or there was a change in the beneficiary’s treatment plan.
  • A recommended drug should not have been used because it may be harmful to the beneficiary.
  • Dispute of items priced for an unrelated body part.
  • Dispute of the rated age used to calculate life expectancy.”

CMS asked for comments on all aspects of its proposal, “including comments on the timeframe, threshold and reasons for granting a re-review.” Comments on each of these were received by the March 31, 2014 deadline. However, although CMS indicated it would “schedule a Town Hall Teleconference and post implementation dates and detailed instructions on its website,” almost a year later, MSP stakeholders are still without a valid and meaningful appeals process to challenge CMS’ rejection of their proposed WCMSAs. Almost 14 years after the WCMSA approval process started, claimants and employer/carriers in work comp cases are still waiting for a re-review or reconsideration process that would allow them the opportunity to be heard, to disagree with and examine CMS’ counter-higher demands, present evidence, including medical records, depositions, and live testimony from medical professionals that can explain the reasonableness of medical services included or omitted in the WCMSA, as well as MSA professionals hired to create such allocations.

As we approach the end of 2014, with yet another year without appeal rights in work comp Medicare set asides, perhaps it is time to give up on the inconsistent CMS approval mechanism and the lack of a meaningful appeals process and instead begin to focus on finding alternative ways to make sure Medicare’s interests are properly considered and taken into consideration when settling entitlement to future medical care and prescription medications related to a work comp claim. Perhaps the time has come for the work comp industry to find a financially sound, secure and trusted way to make sure that by responsibly allocating for such future medical and prescription needs, every allocated dollar toward future medical care and medications related to the claim are in fact spent on such future needs.

At Helios, we assist our clients in taking control of the costs associated with MSP compliance. Whether a self insured, a third party administrator, or insurance carrier, we help our clients assure Medicare compliance by creating products and a process that will make sure such future medical and prescription needs related to the claim are appropriately taken care of at a reasonable and affordable cost.

Rafael Gonzalez is Vice President of Strategic Solutions at Helios. With over 25 years of experience in the workers compensation, liability, Medicare and Medicaid industry, Rafael serves as thought leader on all aspects of Medicare and Medicaid compliance, including mandatory reporting, conditional payments, and set asides. You may contact Rafael at rafael.gonzalez@helioscomp.com or 813.612.5592.

CMS Releases Technical Alert for Implementation of 5 Digit SSN Changes

By , November 30, 2014 8:26 pm

Frank FairchokCMS has released a technical alert dated November 25, 2014, related to the implementation of changes to allow beneficiaries to be queried and reported using the last five digits of the SSN. CMS announced the change on September 10, 2014, and this technical alert has been pending since the announcement.

CMS presents the “Background” to this technical alert as follows:

“Effective January 5, 2015, where a NGHP RRE cannot obtain an individual’s HICN or full SSN, the RRE may report the last 5 digits of the individual’s SSN, first initial, surname, date of birth, and gender. NGHP RREs may continue to submit the HICN or full SSN as before without making any changes to the field and file formats. Additionally, the full HICN will continue to be returned if a distinct match to a beneficiary is found, regardless of whether a full or partial SSN was submitted.”

Some important points related to the technical details of this change are defined in the alert as follows:

  • Query Input File (Field 6 – SSN) – To report a partial SSN, fill the first 4 positions with spaces, followed by the last 5 digits of the SSN.
  • Query Response File (Field 6 – SSN) – If the RRE submitted an SSN on the Query Input File, the value returned on the response file will be the same value that was submitted (i.e., either the partial 5-digit SSN or full 9-digit SSN).
  • Query Response File (Field 8 – Disposition Code) – A new Disposition Code “DP” has been added as a value for this field. Disposition Code “DP” will be returned if multiple Medicare beneficiary records were identified based upon the partial SSN and data submitted on the Query Input File.
  • Claim Input File (Field 5 – Injured Party SSN) – To report a partial SSN, fill the first 4 positions with spaces, followed by the last 5 digits of the SSN.
  • Claim Response File (Field 5 – Submitted Injured Party SSN) – If the RRE submitted an SSN on the Claim Input File, the value returned on the response file will be the same value that was submitted (i.e. either the partial 5-digit SSN or full 9-digit SSN).
  • Claim Response File (Field 27 – Applied Disposition Code) – A new Disposition Code “DP” has been added as a value for this field. Disposition Code “DP” will be returned if multiple Medicare beneficiary records were identified based upon the partial SSN and data submitted on the Claim Input File.

The alert also notes that a new version of HEW (HIPAA Eligibility Wrapper) software, version 3.1.0, will be available on January 5, 2014, and that entities using their own X12 translator will need to obtain the revised X12 270/271 companion guide to accommodate revisions to the query input and response files.

For Helios clients, the technical changes encompassed in this alert will be handled almost entirely within MedicareConnect. All input paths for MedicareConnect, whether through file feed or manual input, allow for partial SSNs within the claim record. We encourage our clients and data sources to contact us directly with any specific concerns and to participate in the recently announced Town Hall conference call.

Of particular note to processes specific to our RRE, carrier and TPA clients, CMS has modified the model language for the collection of the SSN with wording to indicate that the last five digits may be provided if the claimant is uncomfortable providing the whole SSN. The revised model language may be obtained here.

For more information, please contact Frank Fairchok, Senior Manager of MedicareConnect at Frank.Fairchok@helioscomp.com.

Louisiana Appellate Court Dismisses Claim Brought Almost 3 Years After Approved Settlement Based on CMS Demanding Higher MSA

By , November 30, 2014 8:18 pm

LawOn November 5, 2014, the Louisiana Court of Appeal, 3rd Circuit, published its opinion on Hunter v. Rapides Parish School Board, denying Ms. Hunter’s claim to have the employer fund the higher-than-proposed MSA approved by CMS. The Court concluded:

  • Ms. Hunter admitted she knew that the School Board was going to send the Medicare Set Aside to CMS for approval; and
  • Acknowledged there was nothing in the settlement paperwork obligating the School Board to fund a more expensive MSA if CMS did not approve the MSA that she and the School Board had agreed upon; and
  • Ms. Hunter failed to point to any error in the judgment dismissing her claim.

Eliza Hunter injured her low back on March 20, 2001, when she missed a step and fell at the school where she worked. She later filed a workers’ compensation claim against her employer, the Rapides Parish School Board (RPSB), and Claims Administrative Services (CAS), RPSB’s third-party administrator. Over the next several years, RPSB paid Ms. Hunter indemnity benefits totaling $63,786.80 and medical benefits totaling $80,792.54.

More than 9 years later, in October of 2010, Ms. Hunter and the RPSB agreed to settle the matter in return for the RPSB paying Ms. Hunter a lump sum of $19,000.00 and establishing a Medicare Set-Aside Account (MSA) valued at $79,937.77. The parties then presented the Workers Compensation Judge (WCJ) with a Joint Petition and Compromise Settlement Agreement. The WCJ signed an order approving the agreement on October 12, 2010.

Although the opinion does not indicate whether Ms. Hunter was a Medicare beneficiary at the time of settlement, as per the Centers for Medicare and Medicaid Services’ (CMS) recommendations, the RPSB submitted the proposed MSA to CMS for approval. CMS rejected the proposed MSA, instead requiring that the MSA be valued at $94,265.00. Although the opinion does not spell out the exact terms of the agreement, the RPSB opted to keep medical care open and continue to pay Ms. Hunter’s medical expenses as they accrued rather than fund the $94,265.00 MSA.

Without any mention of what had transpired in the interim period of time, almost three years after the WCJ had approved the settlement agreement, on November 6, 2013, Ms. Hunter filed a Disputed Claim for Compensation against the RPSB and CAS seeking to force them to establish the $94,265.00 MSA approved by CMS. The RPSB and CAS responded by filing an exception of no cause of action and/or no right of action. After a hearing, the WCJ granted the exception and dismissed Ms. Hunter’s claim by judgment dated February 3, 2014. She timely filed an appeal.

Pro se, on June 23, 2014, Ms. Hunter filed a pleading with the appellate court entitled “BRIEF REQUESTING AN ORDER TO ENFORCE JUDGMENT.” Therein, she sought to have the court enforce the order signed by the WCJ on October 12, 2010, approving the Joint Petition and Compromise Settlement Agreement entered into by Ms. Hunter, the RPSB, and CAS. In her brief, Ms. Hunter did not assign any error in either the October 12, 2010 order or the February 3, 2014 judgment. Instead, she alleged that CAS “ceased paying her medical expenses” in 2009. She also alleged that CAS denied her request to authorize one of its approved pharmacies to approve a prescription written by her primary care physician in March of 2014.

Although the opinion does not indicate whether the School Board (or its TPA) or Medicare had denied any medical care related to the industrial low back injury, in essence, on appeal, Ms. Hunter seeks to have the court review and enforce the October 12, 2010 order. However, the appeal rights on that order have long expired. Consequently, although Ms. Hunter failed to include any assignments of error in her brief, because Ms. Hunter timely appealed the February 3, 2014 judgment granting RPSB’s and CAS’s exception of no cause of action and/or no right of action pro se, the court decided to “consider the merits of her appeal despite the improper form of her appellant brief.”

Appellate courts are courts of record that neither can receive new evidence nor review evidence that is not in the record. Evidence attached to memoranda and that is not properly and officially offered and introduced does not constitute evidence and cannot be considered, even if it is physically in the record. Accordingly, the court is precluded from considering the exhibits attached to Ms. Hunter’s appellant brief to the extent that the information contained therein was not otherwise a part of the appellate record.

In Williamson v. Liberty Mutual Insurance Co., 12-148 (La. App. 3rd Cir. 6/6/12), 92 So.3d 1218, the court affirmed, as amended, a judgment rendered by a WCJ in favor of a workers’ compensation claimant awarding him penalties and attorney fees after his employer failed to provide him with the money to purchase a MSA within thirty days of the approval of the parties’ settlement by the Office of Workers’ Compensation (OWC). The court noted that “there was no requirement to obtain CMS’s approval of the settlement agreement. Quite the opposite, the settlement agreement stated that the “employee understands that the receipt of this workers’ compensation settlement without CMS pre-approval may result in a loss of Medicare benefits for the work-related injury.”

According to the transcript of the January, 27, 2014 hearing on RPSB’s and CAS’s exception, Ms. Hunter admitted that she knew that the RPSB was going to send the settlement agreement to CMS for approval. She further acknowledged that there was nothing in the settlement paperwork obligating the RPSB to fund a more expensive MSA if CMS did not approve the settlement that she and the RPSB had signed. The court therefore concludes that the jurisprudence supports the February 3, 2014 judgment. As a result, the judgment rendered in favor of the Rapides Parish School Board, granting its exception of no cause of action and/or no right of action and dismissing Eliza Hunter’s claims is affirmed.

This is yet another example of how unclear settlement language can create havoc, even many years after the claim has been settled and approved. It is also another example of how CMS’ optional submission approval process fails to protect litigants. Helios can assist with specifically tailored settlement language and viable compliance alternatives to submitting your MSA to CMS for approval.

CMS Comments on Hydrocodone Combination Product Coverage Changes in Relation to WCMSAs

By , November 21, 2014 11:21 am

Brenda SmithAs of October 6th, 2014, the rescheduling of all hydrocodone combination products to the Schedule II classification went into effect. As previously discussed in our September 15, 2014, “DEA Classification Change for Hydrocodone Combination Products (HCPs)” blog, there were restrictions and changes related to the reclassification that could possibly lead to increase costs and ultimately have an impact on both the medical and the prescription allocations within the MSA.

It was noted that due to more stringent requirements in the areas of distribution, dispensing, record keeping and storage and the changes needed to meet these requirements that there would more than likely be an increase in the costs of the HCPs. We have already seen a rise in costs according to Redbook pricing noted via the CMS portal. For example, in August 2014 when the DEA ruled on the reclassification of the HCPs, generic Norco (Hydrocodone/Acetaminophen 5/325), was $0.342 per tablet. As of October it is now $0.459 per tablet. This is an increase of almost .12 per tablet in 2 months and is already leading to higher prescription costs within the workers’ compensation claim and MSA allocations.

It was also noted the new requirements for HCPs as Schedule II medications would set limitations on prescribing. Schedule II medications must be hand written and may not be faxed (the exception being for Hospice) or called into pharmacies thus making it more difficult for a claimant to obtain their medication. Many states will allow only a one month prescription to be written per visit while others will allow up to a 90 day supply. Previously when under the schedule III classification, the HCPs were valid for up to 6 months. Due to these prescribing limitations it was noted there would be more visits required. As a result, on November 17, 2014, CMS issued a “Notice of Hydrocodone Combination Product coverage changes in Medicare Part D Effective for WCMSA Proposals Submitted on or after January 1, 2015”. It stated that “at a minimum, allocate four healthcare provider visits per year when Schedule II controlled substances (including hydrocodone combination products) are used continuously unless healthcare provider visits are more frequent per medical documentation”. This confirms our previous assumption that there would be an increase in claims costs due to prescribing limitations.

CMS has also indicated that WCMSA cases submitted to CMS before January 1, 2015 that are closed due to missing, incomplete and/or inadequate supporting documentation (or any other reason), and subsequently re-opened after January 1, 2015, will also be subject to a review that includes the C-III controlled substances changes due to rescheduling by the DEA.

CMS methodology continues to highlight that payers that work with Helios Settlement Solutions are well positioned to mitigate pharmacy and their associated costs prior to settlement negotiations and creation of their MSA.

Helios Settlement Solutions will continue to keep you informed of any further changes concerning the HCPs and other medications that will affect drug costs as well as medical costs within the claim and ultimately the allocations within the MSA.

Panorama Theme by Themocracy