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By Settlement Solutions, May 29, 2012 1:22 pm

The United States District Court for the Southern District of Florida recently found in a personal injury matter that an agreement to execute a general release with “Medicare provisions” did not require that the defendant fund a LMSALiability Medicare Set-Aside.¹ By way of background, the Plaintiff, Berneva Bruton (“Bruton”) sued the Defendant, Carnival Corporation (“Carnival”), for injuries allegedly suffered when she slipped and fell onboard one of Carnival’s cruise ships. Bruton and Carnival settled the case and executed a mediation agreement on December 19, 2011, which required that Bruton execute a “general release with approved confidentiality provisions and Medicare provisions.”

When Bruton received the Release and Hold Harmless Agreement drafted by Carnival, she struck language within the Agreement, specifically stating that she “. . . further agrees to retain a portion of the amount in a trust account administered by their undersigned attorneys for three (3) years from the date settlement funds are received or until Medicare provides [Bruton/Plaintiff] with notice that any claim for reimbursement, as authorized by the MSPMedicare Secondary Payer Act (42 U.S.C. § 1395y(b)(3)(A)) has been waived or resolved, whichever occurs first.” The Court construed this stricken language as referencing a LMSALiability Medicare Set-Aside; however, one could argue that the language does not describe a MSAMedicare Set-Aside at all because it references the funds in trust would be for a “claim for reimbursement.” As is well known, MSAMedicare Set-Aside funds are not paid to Medicare but rather held by the injured party to pay their medical bills which would otherwise be reimbursable by Medicare.

Bruton did agree however, to language which stated that because she had reached MMIMaximum Medical Improvement with regard to her injury that no part of the settlement was intended to provide for future medical treatment. She also agreed that she would agree to satisfy any Medicare conditional payments out of her settlement monies.

Due to Bruton’s deletion of a portion of the Medicare language which Carnival interpreted to require an LMSALiability Medicare Set-Aside, Carnival returned the release to Bruton’s counsel and refused to tender payment to Bruton. Bruton subsequently filed a motion to compel settlement, arguing that she fulfilled her obligation to execute a general release with sufficient Medicare language which still obligated her to satisfy Medicare conditional payments, that MSAsMedicare Set-Asides are not required in personal injury cases, and that Carnival breached the Agreement by failing to make payment within thirty (30) days, as provided for in the Agreement.

Carnival, while acknowledging the “unsettled state” of the law as to whether MSAsMedicare Set-Asides are mandated in personal injury settlements, argued that it needed to consider the interests of Medicare, and also noted that it could have potential exposure for any failure of compliance as a third party payer. Carnival further pointed out that the “most appropriate course of action” would be the creation of an LMSALiability Medicare Set-Aside as proposed.

The sole issue before the Court was whether the Agreement required the creation of an LMSALiability Medicare Set-Aside. The parties were in agreement that they settled the case and that the Mediation Settlement Agreement governed. Ultimately, the Court decided that the Agreement did not require the creation of an LMSALiability Medicare Set-Aside. The Agreement only specified that Bruton was to execute a general release with “Medicare provisions” without specifying what those provisions would be. Additionally, the Agreement made no mention specifically of an LMSALiability Medicare Set-Aside.

Within the opinion, the Court noted that there was no legal requirement that a personal injury settlement include an LMSALiability Medicare Set-Aside. However, there is no legal requirement that a workers’ compensation settlement have an MSAMedicare Set-Aside either. MSAsMedicare Set-Asides are a best practice which considers the interests of both Medicare as well as the Medicare beneficiary’s future benefits. This applies in both the liability/personal injury setting as well as the workers’ compensation setting.

The lesson learned from this case is that parties need to be very clear and specific within their settlement documents if they intend to include an MSAMedicare Set-Aside as part of the settlement. Documenting all efforts to be compliant with the MSPMedicare Secondary Payer Act is a prudent step should the settlement ever be scrutinized by CMSCenters for Medicare and Medicaid Services or by a Court in the future.

^{1. [Bruton v. Carnival Corp., 2012 U.S. Dist. LEXIS 64416 (May 2, 2012).]↩}

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By Settlement Solutions, May 23, 2012 11:31 am

The shift from ICD-9International Classification of Diseases, 9th Revision to ICD-10International Classification of Diseases, 10th Edition coding will necessitate a considerable amount of effort and most certainly will impact the way coding is currently performed.  Since DHHSDepartment of Health and Human Services’ announcement to delay the implementation of ICD-10International Classification of Diseases, 10th Edition compliance in February 2012, numerous organizations have stepped forward with concerns and recommendations in relation to this issue. 

Susan Turney, President and CEO of MGMAThe Medical Group Management Association requested in writing on March 1, 2012 that in addition to delaying the ICD-10International Classification of Diseases, 10th Edition implementation, the DHHSDepartment of Health and Human Services take the following seven steps to improve the thoroughness of the process.

• Complete a comprehensive cost benefit analysis to determine how each aspect of the healthcare industry will be impacted by the ICD-10International Classification of Diseases, 10th Edition change
• Pilot test ICD-10International Classification of Diseases, 10th Edition to identify issues and potential road blocks prior to the implementation
• Analyze the administrative and financial impact of overlapping initiatives
• Evaluate additional code set approaches including current ICD-9International Classification of Diseases, 9th Revision code processes and assessing changes necessary to improve the ICD-9International Classification of Diseases, 9th Revision code set
• Stagger implementation dates for different sectors
• Develop appropriate crosswalks to minimize the loss of historical data
• Require certification of all affected health plans

Additionally, in a May 2012 letter to DHHSDepartment of Health and Human Services, Executive Vice President and CEO James Madara, M.D. of the AMAThe American Medical Association requested ICD-10International Classification of Diseases, 10th Edition implementation be delayed to October 2015, stating “a years delay does not provide CMSCenters for Medicare and Medicaid Services with adequate time to fully examine the appropriate scope of the ICD-10International Classification of Diseases, 10th Edition and true costs to physician practices.”  Similar to the views of MGMAThe Medical Group Management Association, the AMAThe American Medical Association feels a cost benefit analysis and phasing in aspects of the implementation will benefit not only the industry but also CMSCenters for Medicare and Medicaid Services’ understanding of the massive undertaking the healthcare industry will experience.  Current ongoing implementation of IT programs for healthcare industry such as the value-based modifier, e-prescribing, PQRSPhysician Quality Reporting System, and EHRElectronic Health Records, combined with the ICD-10International Classification of Diseases, 10th Edition implementation will increase the burden on the industry significantly.

Several other organizations have submitted commentary to DHHSDepartment of Health and Human Services surrounding this topic and the impact it would have upon their industry. DHHSDepartment of Health and Human Services is now reviewing all comments submitted as the last day to submit comments was May 17^th.  

As indicated in our February blog post, the switch to ICD-10International Classification of Diseases, 10th Edition codes, when enacted, will not only have an impact on the medical provider community, but also on the insurance industry.  Currently, MMSEAMedicare Medicaid and SCHIP Extension Act Section 111Section 111 of the Medicare Medicaid and SCHIP Extension Act stating requirements for mandatory insurer reporting Reporting involves the usage of ICD-9International Classification of Diseases, 9th Revision codes to communicate diagnoses of Medicare beneficiaries to CMSCenters for Medicare and Medicaid Services, RREsResponsible Reporting Entities - payers subject to Mandatory Insurer Reporting Requirements mandated by Section 111 of the MMSEA and reporting agents will be required to implement the necessary changes to their data submission processes when ICD-10International Classification of Diseases, 10th Edition codes are implemented.  We believe that the insurance industry shares many of the same concerns as the healthcare industry and would welcome a cost benefit analysis being performed prior to a final implementation date being established. 

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By Settlement Solutions, May 16, 2012 11:41 am

MMSEAMedicare Medicaid and SCHIP Extension Act Section 111Section 111 of the Medicare Medicaid and SCHIP Extension Act stating requirements for mandatory insurer reporting reporting has improved the transparency of claims to CMSCenters for Medicare and Medicaid Services and resulted in the denial of coverage to an increasing number of Medicare beneficiaries.  Denial of coverage can be very frustrating to a Medicare beneficiary, as it may be unclear how to address/appeal the denial.  Additionally, insurance carriers, employers, or third-party administrators may be contacted by Medicare beneficiaries who have been denied coverage in order to obtain assistance.

CMSCenters for Medicare and Medicaid Services has been addressing the issue of inappropriate denial of Medicare benefits through education and outreach to providers and contractors.  CMSCenters for Medicare and Medicaid Services recently issued an article providing specific guidance for correct claims submission when secondary payers are involved.  The article was intended for providers, suppliers, and physicians who bill Medicare and its contractors for services provided to Medicare beneficiaries. 

CMSCenters for Medicare and Medicaid Services advises that a properly filed claim prevents Medicare contractors from inappropriately denying claims and expedites the payment process.  To ensure accurate claim submission and timely payment providers, physicians and other suppliers should do the following:

• Collect full beneficiary health insurance information upon each visit or admission (CMSCenters for Medicare and Medicaid Services published a hospital admissions questionnaire which may be used by all providers/suppliers as a guide to collect information from beneficiaries) 
• Identify the primary payer prior to submission of a claim and bill the appropriate responsible payer for related services
• Use specific and correct diagnosis codes, especially for accident related claims

If another insurer is identified as the primary payer (NGHPNon-Group Health Plan - liablity (including self-insurance), no-fault and workers' compensation and/or GHPGroup Health Plan), the provider/supplier must bill them first, prior to submitting a claim to Medicare.  After receiving remittance advice from the primary payer(s), the provider/supplier can then bill Medicare as the secondary payer, if appropriate.  If a patient is seen for multiple services, each service should be billed separately to the appropriate primary payer.  If the insurer(s) deny the claim, Medicare can then be billed along with the reason for the denial found on the primary payer’s remittance (provider does not have to wait 120 days if they have followed this process).

Additionally, the RREResponsible Reporting Entity - payer subject to Mandatory Insurer Reporting Requirements mandated by Section 111 of the MMSEA should also do their part to assure proper reporting of claims information, especially ICD-9International Classification of Diseases, 9th Revision diagnosis codes, to Medicare.  CMSCenters for Medicare and Medicaid Services stated during the April 24, 2012 NGHPNon-Group Health Plan - liablity (including self-insurance), no-fault and workers' compensation MMSEAMedicare Medicaid and SCHIP Extension Act Section 111Section 111 of the Medicare Medicaid and SCHIP Extension Act stating requirements for mandatory insurer reporting teleconference that RREsResponsible Reporting Entities - payers subject to Mandatory Insurer Reporting Requirements mandated by Section 111 of the MMSEA should assure they are using the most accurate and descriptive ICD-9International Classification of Diseases, 9th Revision codes possible in order to assure proper coordination of benefits. 

The coordination of benefits process has many facets and, at times, can be a somewhat cumbersome and complex system to navigate.  In addition to this alert, CMSCenters for Medicare and Medicaid Services distributed a technical direction letter to all contractors responsible for processing payment.  The anticipated outcome of this concerted education initiative from CMSCenters for Medicare and Medicaid Services regarding appropriate billing practices is a decline in the erroneous denial of Medicare benefits.  In the meantime, the Medicare beneficiary can pursue the appeals process if they feel that Medicare improperly denied coverage.  For additional information on denial of benefits and the Medicare appeals process see our blogs dated August 5, 2011 and November 22, 2011.

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By Settlement Solutions, May 9, 2012 9:23 am

On May 1, 2012, CMSCenters for Medicare and Medicaid Services issued an Alert announcing that RREsResponsible Reporting Entities - payers subject to Mandatory Insurer Reporting Requirements mandated by Section 111 of the MMSEA would now be permitted to submit additional MMSEAMedicare Medicaid and SCHIP Extension Act Section 111Section 111 of the Medicare Medicaid and SCHIP Extension Act stating requirements for mandatory insurer reporting Claim Input Files within the same quarter.  Previously, RREsResponsible Reporting Entities - payers subject to Mandatory Insurer Reporting Requirements mandated by Section 111 of the MMSEA were restricted to submitting only one file per quarter. The lifting of this restriction will allow RREsResponsible Reporting Entities - payers subject to Mandatory Insurer Reporting Requirements mandated by Section 111 of the MMSEA the opportunity to provide updated claims data to CMSCenters for Medicare and Medicaid Services more expeditiously. For example, claim records with ORMOngoing Responsibility for Medicals (i.e., carrier accepting payment responsiblity for case) may be closed out without the need to wait until the following quarter, allowing CMSCenters for Medicare and Medicaid Services to more consistently obtain the information needed to properly coordinate benefits. Within the Alert, CMSCenters for Medicare and Medicaid Services noted that two limitations apply to this change:

• A subsequent file submission will not be processed until the prior one has been completed and a response file generated.  NGHPNon-Group Health Plan - liablity (including self-insurance), no-fault and workers' compensation RREsResponsible Reporting Entities - payers subject to Mandatory Insurer Reporting Requirements mandated by Section 111 of the MMSEA should not submit a subsequent file until they have received the response to the previous file submission.
• Without exception, NGHPNon-Group Health Plan - liablity (including self-insurance), no-fault and workers' compensation RREsResponsible Reporting Entities - payers subject to Mandatory Insurer Reporting Requirements mandated by Section 111 of the MMSEA will be limited to only one file submission every fourteen days.

RREsResponsible Reporting Entities - payers subject to Mandatory Insurer Reporting Requirements mandated by Section 111 of the MMSEA are still expected and required to adhere to the standard quarterly file submissions according to their assigned file submission periods.  There is no requirement to submit more than one file per quarter.  CMSCenters for Medicare and Medicaid Services stated that the contents of this Alert will be incorporated into the next version of the User Guide. 

PMSI applauds this Alert from CMSCenters for Medicare and Medicaid Services and believes that the lifting of this restriction will allow for better compliance by RREsResponsible Reporting Entities - payers subject to Mandatory Insurer Reporting Requirements mandated by Section 111 of the MMSEA with MMSEAMedicare Medicaid and SCHIP Extension Act reporting requirements. Better compliance can decrease the potential for fines against RREsResponsible Reporting Entities - payers subject to Mandatory Insurer Reporting Requirements mandated by Section 111 of the MMSEA if they can report a missed claim or correct a submission as early as fourteen days. Additionally, more accurate and frequent reporting can result in a better coordination of benefits decreasing the instances of beneficiaries being denied Medicare coverage.  For more information regarding denial of Medicare coverage please see PMSI’s previous blogs dated August 5, 2011 and November 22, 2011.