We have observed an increase in notices being provided to workers’ compensation, no-fault auto and premises coverages, liability insurers, and claimants in recent months requesting information so that coordination of benefits (COB) can occur for claimants who are current Medicare beneficiaries. In an effort to get to the bottom of the frequency of these inquiries, we began a search into the recent probing efforts by the BCRC, Medicare Advantage plans (MAP), and Medicare prescription Part D plans.
One such letter mailed to a claimant in early October was forwarded to us for review. The letter was sent by a company that seems to be associated with a Medicare Advantage plan which covers both parts C & D who described themselves as “your health care partner”. The former claimant, a current Medicare beneficiary, forwarded a copy of the letter to his former liability adjuster since he didn’t understand how he should respond. All he knew was he had recently tried to schedule an additional surgery which appeared to be related to his previous accident and was unable to do so until a response was provided to the letter.
The subject line contained in the letter stated, “Medicare Request for Liability Insurance Information”.
The next section of the letter was entitled: “Why you are receiving this letter” and stated:
“We have received notice from Medicare that you may have liability insurance to help cover your medical or drug costs. Liability insurance may be related to a previous injury or accident, including, but not limit to, automobile, workers’ compensation, etc. Medicare has asked us to verify if this information is correct.”
The next section of the letter was entitled: “What you need to do” and stated:
“Review the following pages and verify if the information is correct. If it is, no further action is required. If it is not, please contact the liability insurance company to correct the information.”
The remaining section of the letter was entitled: “Medicare COB Questionnaire”. This section appears to have come from the ten page model language as found in the Medicare Secondary Payer Manual Ch. 3 §20.2.1 for beneficiaries to complete at the start of care provider based and non-provider based encounters and services.
Part II of the Medicare COB Questionnaire states in bolded capital letters “LIABILITY INSURANCE IS PRIMARY PAYER ONLY FOR THOSE SERVICES RELATED TO THE LIABILITY SETTLEMENT, JUDGMENT, OR AWARD”.
The liability claim made the subject matter of the aforementioned letter settled for well over 6 figures nearly 4 years ago. Presumably, the liability insured and insurer were released from responsibility for future related medical expenses long ago. We were told that claimant’s attorney refused a liability Medicare Set-Aside (MSA) arrangement at the time of settlement. It is unknown as to whether claimant still has any settlement dollars in his possession. Incorrect Section 111 data fields were recently revised and submitted to CMS as a result of said letter and COB inquiry.
Section 1862(b)(6) of the Social Security Act and 42 USC § 1395y(b)(6), requires all entities seeking payment to complete the Medicare COB questionnaire. In addition, 42 CRF 489.20(g) requires that all providers must agree to bill other primary payers before billing Medicare.
Medicare Secondary Payer (MSP) claim compliance applies not only to traditional Medicare, Parts A and B, but has expanded to Medicare Advantage plans (MAP) under Parts C and D as well. As such, providers must bill the primary payer, if any, before billing Medicare Parts A, B, C or D.
Pushed by a number of favorable court decisions permitting MAPs to bring private causes of action against workers’ compensation, no-fault, and liability insurers for double damages under the MSP Act, along with a mandate to seek recovery, Medicare Part D plans are tactically moving into conditional payment recovery and searching for MSAs in which to bill for related prescriptions allocated.
Medicare Part D
In 2006, Medicare Part D prescription drug coverage was added. Part D is a voluntary outpatient prescription drug benefit plan available to all Medicare beneficiaries. Beneficiaries enrolled in a Part D plan (PDP) may purchase annually a stand-alone PDP or may purchase a Part D plan as part of their MAP coverage.
Part D benefits are provided by private companies, and the extent of coverage varies from plan to plan and state to state. As of 2017, nearly 70 percent of traditional Medicare beneficiaries are covered under a stand-alone Part D plan. The stand-alone plans with the highest enrollment include SilverScript Choice, AARP MedicareRx Preferred, Humana (Walmart Rx and Preferred Rx), and Aetna Medicare Rx Saver.
In addition, and perhaps the most significant development concerning MSA allocations, was when the Centers for Medicare and Medicaid Services (CMS) enacted new policies for calculating future Medicare Part D prescription drug costs for MSA proposals in workers’ compensation cases. Effective June 1, 2009, CMS began independently pricing future Part D drugs related to a claimant’s workers’ compensation injury or illness for MSA purposes.
Medicare Secondary Payer claim compliance includes efforts by Part D plans (PDP) to not only recover conditional payments they made when a primary payer should have paid, but to deny payment of related prescriptions and instead bill MSAs for payment.
This effort has been made easier by recent developments permitting CMS’ BCRC to obtain, process and disclose more information to Part D plans, all Medicare plans, and Medicare providers and suppliers. In essence, the BCRC is truly acting as the coordination of benefits (COB) contractor to determine who pays first.
Coordination of benefits (COB) by the BCRC allows plans that provide health or prescription coverage for a person with Medicare to determine their respective payment responsibilities and to determine which insurance plan has the primary payment responsibility. Information provided to and by the BCRC is being used to decide what should be paid by Medicare, what should be denied and instead paid by the primary payer or Medicare beneficiary, or paid out of an MSA arrangement.
What has changed
Medicare Coordination of Benefits (COB) Questionnaires and more accessible data
While we were headed home to celebrate Thanksgiving, CMS clarifications that were issued for providers pertaining to Medicare Secondary Payer (MSP) requirements became effective as of November 20, 2018.
Providers are required to determine whether Medicare is a primary or secondary payer in each inpatient admission and outpatient encounter with a Medicare beneficiary prior to submitting a bill to Medicare. This is to be accomplished by asking the Medicare beneficiary details about other coverage using a Medicare COB Questionnaire as shown in Medicare Secondary Payer (MAP) Manual Ch. 3 §20.2.1. Further, CMS updated its instruction to reemphasize that providers also view the CMS Common Working File (CWF) to confirm with the patient if insurance information has changed.
Online capability to access and view Medicare Secondary Payer information by providers for COB purposes
In addition, providers now have online capability to access and view Medicare Secondary Payer information from the CWF MSP auxiliary file. Recent revisions of the MSP manual also further clarify MSP processes that include electronic correspondence referral system (ECRS) requests and timely submission of MSP information. As of October 1, 2018, the changes address situations in which ECRS requests are sent to the BCRC to update MSP records by the Section 111 contractor.
The Coordination of Benefits (COBC) contractor, known as the BCRC, completes MSP updates on a daily basis upon receipt of notice that another payer is primary to Medicare. This information may be gleaned from an explanation of benefits, a beneficiary questionnaire, a notice from a third-party payer via a Section 111 reporting agent, a fax or phone call to the BCRC, or CMS’ Commercial Repayment Center (CRC).
Every claim for a given beneficiary is validated by the BCRC against the same MSP data housed in a CWF, MSP auxiliary file, thus permitting uniform processing. Contractor claims data inconsistent with a CWF, MSP auxiliary file will cause rejections and/or error conditions. An MSP auxiliary record consistent with an identified MSP situation must be present before a payment is approved for an MSP claim. An MSP auxiliary record is established by an MSP maintenance transaction submitted to CWF. The claim must agree with the MSP auxiliary record that was established, or it will not process.
As in the liability claim discussed above, we presume the MSP auxiliary record was inconsistent with the CWF or Section 111 data, which caused the subsequent surgery scheduling to be delayed until the primary payer could be established by the surgeon and surgery provider.
Online capability to access and view Medicare Secondary Payer information by the BCRC, Medicare Advantage plans, and Medicare prescription Part D plans for recovery purposes
Lastly, another change that would explain the recent BCRC and MAP COB notices and inquiries was found in Plan Communication User Guide for Medicare Advantage Prescription Drug Plans. The new version 12.1, released August 31, 2018, provides information to Medicare Managed Care Plans and Prescription Drug Sponsors/Plans for the participation in the MAPD Program and described the use of the Medicare Advantage Prescription Drug (MARx) User Interface (UI) System, and the exchange of data files and reports between the Plans and CMS.
Further, § 3.7.1 defines and provides instructions for the use of data elements identified by the BCRC for the coordination of benefits (COB). The information contained in the COB file is collected by the BCRC through the following sources:
• Data Sharing Agreements (DSAs)
• COB Agreements (COBAs)
• Other data exchanges with non-Part D payers
• Pharmacy Benefit Manager (PBM)
• Employer Group Health Plan (EGHP) sponsors
• Section 111 Responsible Reporting Entity (RRE)
• State programs
• Questionnaires filled out by beneficiaries
• Employers and providers
• Leads submitted from Part D Plans and other Medicare contractors
The information collected by the BCRC and provided to the Part D Plan assists the Part D Plan in fulfilling its requirement to coordinate with other health insurance (OHI) information. The Medicare Beneficiary Database (MBD) sends the COB File to Part D Plans via the MARx system. The COB-OHI file is automatically sent to Part D Plans and can occur as often as daily, although most data exchanges administered by the BCRC for CMS are monthly. The BCRC conducts development through phone calls, faxes and information they receive via the Medicare Secondary Payer Recovery portal (MSPRP), Section 111 data, and beneficiary questionnaires on a continual basis. The Part D Plan uses the elements contained in the BCRC COB records to make payment determinations and/or to recover mistaken payments made.
It is the position of MAPs and PDPs that they, like traditional Medicare Parts A and B, have recovery rights under provisions found in § 1860D-2(a)(4) of the Medicare Modernization Act (MMA) and the Medicare Secondary Payer (MSP) rules found at 42 U.S.C. § 1395y(b).
Like traditional Medicare and Medicare Advantage plans, when the Part D Plan makes a conditional payment regardless of when it is discovered, they may seek recovery from the primary payer, the Medicare beneficiary, and/or may bill the applicable MSA via the self-administered Medicare beneficiary or professional MSA administrator.
When these mistaken or conditional primary payments are made, like traditional Medicare and Medicare Advantage, the Part D Plan is required to recover the primary payment from the relevant employer, insurer, WC/no-fault/liability carrier, or the Medicare beneficiary plan member. This is mandated and not optional as CMS audits PDP’s recovery efforts.
Therefore, we anticipate that you will receive more notices and payment demands from traditional Medicare, MAPs, and PDPs as more data is easily accessible to all. Access to MSP data from the BCRC that makes it easier for all to COBs and to seek recovery from the primary payer, the WC/no-fault/liability carrier, the Medicare beneficiary, or the MSA professional administrator.
Impact and Application
It is incumbent that the information and data reported for COB purposes be accurate and correct to avoid unintended consequences such as:
• disputing or appealing conditional payments long after the claim has been closed
• delayed or denied treatment or surgery for Medicare beneficiaries
It cannot be overemphasized that all communication with CMS be accurate and consistent especially dates of incident, insurance type, ICD injury codes claimed and released or terminated even when said information is conveyed to CMS by claimant or claimant’s attorney. Because data is being compared by various CMS contractors, it is recommended that all parties discuss the facts and data pertaining to the case. It is also necessary to have an MSP partner and claim processes in place that address the accuracy of all information communicated to CMS via:
• Section 111 Reporting
• Conditional payment information disclosed to the CRC or BCRC
• Medicare Secondary Payer Recovery Portal
• Workers’ Compensation MSA Review Contractor
• Professional MSA administrators
Medicare Advantage Plans (MAPs) and Prescription Drug Plans (PDPs) do not hesitate to bring private causes of action for double damages when recovery is not forthcoming as referenced by Rafael Gonzalez, Esq., President, Optum Settlement Solutions on 11/8/2018 by Work Comp Central.
Optum Settlement Solutions stands ready to assist with all your Medicare Secondary Payer compliance needs.
The Henry J. Kaiser Foundation, Medicare Part D: A First Look at Prescription Drug Plans in 2018, Issue Brief, October 2017.
Medicare Secondary Payer Manual, Ch. 3 §20.2.1
Medicare Secondary Payer Manual, Chapter 5, Section 10 and Chapter 6
The Medicare Advantage Prescription Drug (MAPD) Plan Communication User Guide (PCUG), § 3.7.1, August 31, 2018, version 12.2