Author Archives: Settlement Solutions

New Commercial Repayment Center (CRC) contract awarded

Performant Financial Corporation announced on October 5, 2017, they were awarded the Medicare Secondary Payer Commercial Repayment Center (CRC) contract by the Centers for Medicare & Medicaid Services (CMS). Performant will succeed CGI Federal, the current contractor.

Performant is a leader in the identification and recovery of improper payments in the health care, government and student loan industries; Further, it will be Performant’s responsibility to identify and recover payments in situations where Medicare should not be the primary payer of health care claims when a beneficiary has other forms of insurance coverage, such as employer Group Health Plan or other certain other payers.

Congratulations, Performant, and we look forward to working with you.

CMS Keeps $1,000 Mandatory Reporting and Conditional Payment Threshold

Rafael Gonzalez, Esq.
Vice President, Strategic Solutions

As per the SMART Act, “reimbursement of conditional payments and mandatory reporting shall not apply with respect to any settlement, judgment, award, or other payment by an applicable plan arising from liability insurance (including self-insurance) and from alleged physical trauma-based incidents (excluding alleged ingestion, implantation, or exposure cases) constituting a total payment obligation to a claimant of not more than the single threshold amount calculated by the Secretary for the year involved.” As a result, since 2013, “the annual single threshold amount for a year shall be set such that the estimated amount shall equal the estimated cost of collection incurred by the United States (including payments made to contractors) for a conditional payment arising from liability insurance (including self-insurance).” Consequently, on October 19, 2015, CMS published its “Computation of Annual Liability Insurance (Including Self-Insurance) Settlement Recovery Threshold,” and its Alert on “2015 Recovery Threshold for Certain Liability Settlements, Judgments, Awards or Other Payments.”

Medicare Secondary Payer Act

The publications indicate that “the Medicare Secondary Payer (MSP) provisions, found at section 1862(b) of the Social Security Act, prohibit Medicare from making payment where payment has been made or can reasonably be expected to be made by a primary plan. If payment has not been made, or cannot reasonably be expected to be made promptly by a primary plan, Medicare may pay conditionally, with the expectation that the conditional payments would be reimbursed, once primary payment responsibility is demonstrated.”

Settlement, Judgment, Award, or Other Payment

“In liability insurance (which always includes self-insurance) situations, the primary plan has demonstrated primary payment responsibility when a settlement, judgment, award, or other payment (settlement) occurs. Accordingly, Medicare is obligated by statute to recover conditional payments it made for medical care related to the settlement. Medicare’s recovery is limited to the amount of the settlement less any attorney fees or costs the beneficiary incurred to obtain the settlement.”

Mandatory Insurer Reporting

The announcements also indicate that “Medicare beneficiaries, their attorneys, and applicable plans report settlements to Medicare. Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) requires that an applicable plan making an insurance or workers’ compensation settlement payment report that payment to Medicare. This reporting is required so Medicare is able to determine if it made any conditional payments related to that settlement. Once reported, Medicare calculates its conditional payment amount, reduces that amount for attorney fees and costs, and issues a demand letter requiring reimbursement.”

Associated Medicare Costs

The reports also state that “Medicare incurs costs to perform these activities. These costs include compiling related claims, calculating conditional payments, applying reductions, sending demands, providing customer service, etc. In addition to CMS’ costs associated with pursuing recovery, Medicare does not usually recover the full amount of the conditional payments. For example, there may be reductions to the demand to account for procurement costs (attorney fees and costs) or for full or partial waiver of recovery if certain criteria are met. Implementing a threshold allows CMS to use its resources wisely.”

Threshold for Physical Trauma Liability Insurance Settlements

The analysis shows that resulting from amendments to the MSP Act in 2012, “in 2013, as an annual requirement of section 202 of the Act, CMS reviewed all of the costs related to collecting data and determining the amount of Medicare’s recovery claim. As a result of this analysis, CMS calculated a revised threshold for physical trauma-based liability insurance settlements. Effective January 1, 2014, CMS established a single threshold for these cases, where settlements of $1000 or less do not need to be reported and Medicare’s conditional payment amount related to these cases did not need to be repaid. In 2014, CMS reviewed current costs related to collecting data and determining the amount of Medicare’s recovery claim. For 2015, CMS has determined that it will maintain the current single threshold for these cases, where settlements of $1000 or less do not need to be reported and Medicare’s conditional payment amount related to these cases does not need to be repaid.”

Average Cost of Collection for NGHP Cases

The publications provide that “CMS estimated the average cost of collection for Non-Group Health Plan (NGHP) cases as approximately $420 a case. This cost of collection was based on the amount paid (invoices) to our Benefits Coordination and Recovery Contractors for work related to identifying and recovering NGHP conditional payments (this data includes liability insurance, no-fault insurance and workers’ compensation). The data used were for the fiscal year 2014. The total dollar amount paid to our contractors was divided by the number of final NGHP demand letters issued in 2014. The average cost of collection per NGHP case was calculated to be approximately $420.”

Based on Cost, Configuration of Threshold

The information suggests that “CMS then examined the amounts demanded for liability insurance cases for FY 2014. Different settlement amount ranges were examined. The settlement amount range that had the demand amount closest to the $420 cost of collection was for settlements above $750 and less than or equal to $1000. The average demand amount for this range of settlements was $436. Based on this information, CMS determined it should maintain the threshold of $1000, so that physical trauma-based liability insurance (including self-insurance) settlements of $1000 or less do not need to be reported and Medicare’s conditional payment amount for these settlements does not need to be repaid.”

Threshold Remains Same

As required by section 1862(b)(9) of the Act, “CMS will maintain the single threshold for physical trauma-based liability insurance settlements of $1000 or less. Therefore, Medicare will not require reporting and Medicare will not assert a recovery claim against physical trauma-based liability insurance settlements that are $1000 or less. This threshold does not apply to settlements for alleged ingestion, implantation or exposure cases.” Information on the methodology used to determine the threshold is provided at https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Beneficiary-Services/Downloads/Computation-of-Annual-Liability-Insurance-Including-Self-Insurance-Settlement-Recovery-Threshold-2015.pdf.

As always, Helios Settlement Solutions will continue to keep you updated on this and all other Medicare Secondary Payer compliance matters. Should you have any questions or if we can be of any help, please do not hesitate to contact us at 888.672.7674, or at contactus@helioscomp.com.

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As Promised, Conditional Payments Resolution via Web Portal to Start 1/1/16

Rafael Gonzalez, Esq.
Vice President, Strategic Solutions

Introduction

092815_1655_NewProcessf1.gifOn November 9, 2015, CMS published an update on the much anticipated Medicare Secondary Payer Recovery Portal (MSPRP) Conditional Payment process. The entire Medicare Secondary Payer (MSP) community has been waiting on this since September 20, 2013, when the Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS) published CMS-6054-IFC, RIN 0938-AR90 as an interim final rule on obtaining final MSP conditional payment amounts via web portal.

The 9/20/13 interim final rule specified the process and timeline for expanding CMS’ web portal to conform to section 201 of the Medicare IVIG and Strengthening Medicare and Repaying Taxpayers Act of 2012 (the SMART Act). The interim final rule specified a timeline for developing a multifactor authentication solution to securely permit authorized users other than the beneficiary to access CMS’ conditional payment amounts and claims detail information via the CMS web portal.

The interim final rule also indicated CMS’ intent to add functionality to the web portal so as to permit users to notify CMS that the specified case was approaching settlement; obtain time and date stamped final conditional payment summary forms and amounts before reaching settlement, and ensure that relatedness disputes and any other discrepancies were addressed within 11 business days of receipt of dispute documentation.

Although it has taken a while, having developed and recently announcing a multifactor authentication solution earlier in 2015 to securely permit authorized users other than the beneficiary to access CMS’ conditional payment amounts and claims detail information via the web portal, on November 9, 2015, CMS published an update on the Medicare Secondary Payer Recovery Portal modification for inclusion of Final Conditional Payment (CP) process functionality.

CMS’ November 9, 2015 Announcement

As expected, the announcement indicated that “pursuant to the SMART Act, the MSPRP will be modified to include Final CP process functionality by January 1, 2016. This new functionality will permit authorized MSPRP users to notify CMS that a recovery case is 120 days (or less) from an anticipated settlement and request that the recovery case be a part of the Final CP process.”

The 11/9/15 announcement indicated that “when the Final CP process is requested, any disputes submitted through the MSPRP will be resolved within 11 business days of receipt of the dispute.  Once all disputes have been resolved, and the case is within 3 days of settling, the beneficiary or their authorized representative will be able to request a Final Conditional Payment Amount on the MSPRP.”  Once calculated, this amount will remain the “Final Conditional Payment Amount as long as the case is settled within 3 calendar days of requesting the Final CP amount, and settlement information is submitted through the MSPRP within 30 calendar days of requesting the Final CP amount.”

CMS’ September 20, 2013 Interim Final Rule

The 9/20/13 interim final rule produced 42 CFR Section 411.39, specifically addressing automobile and liability insurance (including self-insurance), no-fault insurance, and workers’ compensation: final conditional payment amounts via web portal. The interim rule provided beneficiaries access to his or her MSP conditional payment information via the MSPRP, provided that “the beneficiary created an account to access his or her Medicare information through the CMS website, and the beneficiary provided initial notice of a pending liability insurance (including self-insurance), no-fault insurance, or workers’ compensation settlement, judgment, award, or other payment to the appropriate Medicare contractor at least 185 days before the anticipated date of settlement, judgment, award, or other payment.”

The interim final rule also provided a beneficiary’s attorney or other representative, or applicable plan’s access on or before December 31, 2015, and after January 1, 2016. On or before December 31, 2015, a beneficiary’s attorney or other representative or an applicable plan, would be able to view total MSP conditional payment amounts and masked claim-specific information, including dates of services, provider names, and diagnosis codes, so long as “the authorized attorney or other representative or authorized applicable plan had properly registered to access the web portal, and the attorney or other representative or applicable plan obtained proper authorization from the beneficiary and submitted it to the appropriate Medicare contractor in the form of either proof of representation or consent to release in order to access the beneficiary’s case specific information.” Once such authorization was obtained, “a beneficiary’s attorney or other representative or an applicable plan could dispute claims, upload settlement information, and receive a final CP demand through the MSPRP.”

The interim final rule also indicated that “on or after January 1, 2016, a beneficiary’s attorney or other representative or an applicable plan could access conditional payment information via the MSPRP using the multifactor authentication processes, dispute claims and upload settlement information via the web portal, and obtain a final conditional payment amount.”

The Medicare Secondary Payer Recovery Portal Resolution Process

As indicated by the 9/20/13 interim final rule, the MSPRP process is as follows:

  • A beneficiary’s attorney or other representative or an applicable plan must properly register to access the web portal, and obtain proper authorization from the beneficiary and submit it to the appropriate Medicare contractor in the form of either consent to release (in order to access the beneficiary’s case specific information) or proof or representation (in order to dispute claims, upload settlement information, and receive a final CP demand).
  • A beneficiary’s attorney or other representative or an applicable plan must provide initial notice of a pending liability insurance (including self-insurance), no-fault insurance, and workers’ compensation settlement, judgment, award, or other payment to the appropriate Medicare contractor at least 185 days before the anticipated date of settlement, judgment, award, or other payment.
  • The Medicare contractor compiles and posts claims for which Medicare has paid conditionally that are related to the pending settlement, judgment, award, or other payment within 65 days of receiving the initial notice of the pending settlement, judgment, award, or other payment.
  • Beginning any time after CMS posts its initial claims compilation, and up to 120 days before the anticipated date of a settlement, judgment, award, or other payment, the beneficiary, or his or her attorney, or other representative or applicable plan may notify CMS, once and only once, via the web portal, that a settlement, judgment, award or other payment is expected to occur within 120 days or less from the date of notification.
  • The beneficiary, or his or her attorney, or other representative or applicable plan may address discrepancies by disputing a claim, once and only once, if he or she believes that the claim included in the most up-to-date conditional payment summary form is unrelated to the pending liability insurance (including self-insurance), no-fault insurance, or workers’ compensation settlement, judgment, award, or other payment.
  • Disputes submitted through the web portal are to be resolved within 11 business days of receipt of the dispute and any required supporting documentation.
  • When any disputes have been fully resolved and the beneficiary, or his or her attorney, or other representative or applicable plan has executed and obtained confirmation of the completion of a final claims refresh, then the beneficiary, or his or her attorney or other representative, or applicable plan may download or otherwise request a time and date stamped conditional payment summary form through the web portal. If the download or request is within 3 days of the date of settlement, judgment, award or other payment, that conditional payment summary form will constitute Medicare’s final conditional payment amount.
  • Within 30 days of securing a settlement, judgment, award, or other payment, the beneficiary, or his or her attorney or other representative or applicable plan, must submit through the web portal settlement documentation which indicates the date of settlement, judgment, award, or other payment, including the total settlement amount, the attorney fee amount or percentage, as well as any additional costs borne by the beneficiary to obtain his or her settlement, judgment, award, or other payment.
  • If settlement information is not provided within 90 days of securing the settlement, the final conditional payment amount obtained through the web portal is void.
  • Once settlement, judgment, award, or other payment information is received, CMS applies a pro rata procurement reduction to the final conditional payment amount in accordance with 42 CFR Section 411.37 and issues a final MSP recovery demand letter.

Helios Settlement Solutions has been preparing for the implementation of the SMART Act since becoming law in January 2013. As a result, Helios’ Conditional Payment Resolution team is ready to assist current and potential clients with implementation of CMS’ 9/20/13 interim final rule by incorporating the MSPRP resolution process effective January 1, 2016. Should you have any questions pertaining to this new procedure, or if we can be of any assistance regarding this expedited web portal process, please do not hesitate to contact us at 888.672.7674, or at contactus@helioscomp.com.

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Arizona Federal Court Dismisses Case Asking Whether Liability MSA is Necessary

Rafael Gonzalez, Esq.
Vice President, Strategic Solutions

Stethoscope and GavelOn October 16, 2015, the United States District Court for the District of Arizona published its opinion on Aranki v. Burwell, concluding that this case is not ripe for review because no federal law mandates CMS to decide whether Plaintiff is required to create a MSA. That CMS has not responded to Plaintiff’s petitions on the issue, is not reason enough for this Court to step in and determine the propriety of its actions. The Court goes as far as to indicate that there may be a day when CMS requires the creation of MSAs in personal injury cases, but that day has not arrived. The Court indicates that even if a justiciable case or controversy existed, or the Court found other grounds to exercise jurisdiction, the United States in this case is immune from lawsuit as it has not waived its sovereign immunity. Therefore the Court concludes that although it is sympathetic to the uncertain predicament that CMS has placed upon Plaintiff, judgment in favor of the Defendants is proper.

In 2009, Plaintiff Rachel Aranki (Plaintiff), a Medicare beneficiary, was injured in a medical malpractice incident that left her partially paralyzed and in chronic pain. Plaintiff filed a medical malpractice action in Arizona state court against Scottsdale Healthcare Hospital, and several doctors who treated her (Defendants). A settlement agreement was reached in the case but finality of the settlement was stalled because the issue arose whether the Center for Medicare and Medicaid Services (CMS) would mandate the creation of a Medicare set aside (MSA). Plaintiff petitioned CMS, but it did not respond.

Without any indication from CMS, Defendants were fearful that going through with settlement without approval or recognition from CMS would not be in their best interest. As a result, Plaintiff filed a Motion to Enforce Settlement. After hearing from counsel from both plaintiff and defendants, the Superior Court of the State of Arizona in the County of Maricopa ordered the settlement of the parties enforced.

The order of the Superior Court indicated that Plaintiff’s counsel “shall maintain $153,558.28 in a separate interest-bearing account to be held in trust, so that monies for payment of medical expenses which are necessitated by the injuries claimed and covered by Medicare may be dispersed from the trust account.” In addition, “counsel for plaintiff will notify CMS of the settlement, including notification of the recommended MSA amount.”

In addition to these requirements, the Superior Court ordered the plaintiff to “file a Declaratory Judgment action in the United States District Court for the District of Arizona seeking a determination of the necessity of a Medicare set aside, and if a MSA is required, the amount required to be set aside.” The Superior Court indicated that the action should “name the United States of America as a defendant, together with such other parties or entities as may be necessary to adjudicate the issue of the necessity of and amount of a MSA.”

The Superior Court also indicated that “if the District Court declares that an MSA is not required, the funds held in trust will be released to the Plaintiff without restriction. If the District Court determines that an MSA is required, Plaintiff shall use the funds in trust account to establish a self-administered MSA in the amount determined by the District Court. If the District Court ultimately declines to rule on the necessity of an MSA, plaintiff will maintain the entirety of the funds held in trust account until some final determination is made by the Court or agreement of Plaintiff and US Government.”

As ordered, Plaintiff filed a Declaratory Judgment action in the appropriate District Court. However, before the court entertains a declaratory judgment, “the District Court must examine whether there is an actual case or controversy within its jurisdiction.” If there isn’t such a case or controversy, then “the case is not ripe for review and the court lacks subject matter jurisdiction.” Here, the District Court finds that “there is no justiciable case or controversy ripe for review. As such, the Court does not have subject matter jurisdiction to hear this case.”

The Court indicates that “this case is not ripe for review because no federal law mandates CMS to decide whether Plaintiff is required to create a MSA. That CMS has not responded to Plaintiff’s petitions on the issue, is not reason enough for this Court to step in and determine the propriety of its actions.” The Court goes as far as to indicate that “there may be a day when CMS requires the creation of MSAs in personal injury cases, but that day has not arrived.”

In addition, the Court indicates that “even if a justiciable case or controversy existed, or the Court found other grounds to exercise jurisdiction, the United States in this case is immune from lawsuit as it has not waived its sovereign immunity.” Therefore the Court concludes that although it is “sympathetic to the uncertain predicament that CMS has placed upon Plaintiff, judgment in favor of the Defendants is proper.”

This is not the first federal court to rule in this manner. On May 2, 2012, the United States District Court for the Southern District of Florida in Bruton v. Carnival Corporation, concluded that there is no legal requirement that the settlement in this personal injury lawsuit include a Medicare set-aside. On February 7, 2013, the United States District Court for the Southern District of Florida in Early v. Carnival Corporation, again found that because there is no legal requirement that the settlement in this personal injury lawsuit include a Medicare set-aside, it will not render an advisory opinion as to whether an MSA is necessary or not.

However, other federal courts have ruled differently on this same issue. On February 26, 2013, the United States District Court for the Southern District of Mississippi published in Welch v. American Home Assurance, finding that there is an actual controversy when the parties seek a declaration of their rights and obligations in order to comply with the MSP and its related regulations involving the settlement of liability claims, for which CMS provides no procedure for determining the adequacy of protecting Medicare’s interests for future medical needs and/or expenses. On April 17, 2013, the United States District Court for the Western District of Louisiana in Benoit v. Neustrom, not only opined on the necessity for an MSA in a liability case, but used a percentage applied formula to the net settlement proceeds to conclude a specific sum of money to be set aside in trust for future medical expenses.

As Helios Settlement Solutions has been indicating for a number of years, until there is legislation or regulations in place that spell out when and how to take Medicare’s future interests into consideration in liability claims, the only way to control this issue is to make it part of your settlement agreement or release. Be clear, be precise, and be specific as to the intent and format of the parties’ wishes and agreement on how to protect Medicare’s future interests. Perhaps no case has said it best than the February 11, 2015 opinion from the United States Court of Appeals for the Second Circuit in Hoover v. New York State Department of Corrections and Community Supervision, Albion Correctional Facility, Sue Wojcinski, Sandra Durfee, Angie Maume, and Donna Baker, finding that if the parties considered plaintiff’s Medicare status to be so critical in deciding whether to settle or not, they should have ascertained how to take Medicare’s future interests into consideration before agreeing to settle the case for $750,000.

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