Category Archives: Conditional Payments

Don’t Rely on an MSP Conditional Payment Notice when Executing a Settlement Agreement and General Release

In a recent decision on 3/13/2018, Mayo v. NYU Langone Medical Center, the courts voided a settlement on the grounds of a mutual mistake because both the plaintiff and defense relied upon a conditional payment notice rather than a conditional payment demand or initial determination. The plaintiff provided a conditional payment notice that was dated several months prior to settlement in the amount of $2,824.50, which represented what the Centers for Medicare and Medicaid Services (CMS) believed to be payments made by Medicare at that time.

After the settlement was reported, CMS issued a demand in the amount of $145,764.08 to the estate of the Medicare beneficiary, who had exhausted all appeals with CMS in an attempt to reduce the Medicare recovery amount. The court rejected the arguments from the defense, stating that it was the plaintiff’s responsibility to obtain the final conditional payment amount from Medicare.

Best practices include obtaining a conditional payment notice pre-settlement so that all parties are aware that related conditional payments demanded must be reimbursed to Medicare. Settlement language must be clearly worded so that the parties know who is obligated to repay Medicare and whether the conditional payment reimbursement will be paid “out of” or “in addition to” the total settlement amount. When a settlement involves a Medicare beneficiary, both parties should not close their files until confirmation that conditional payment recovery has been fully satisfied.

Optum Settlement Solutions can provide assistance in:

  • Researching the Medicare Secondary Payer Recovery Portal to track potential conditional payments assigned, or added, to your claim, including interest being accrued
  • Obtaining a conditional payment summary pre-settlement so you may evaluate your case and plan your negotiation strategy
  • Providing notice to CMS of a settlement date and amount to elicit a final amount owed
  • Reviewing Medicare Secondary Payer (MSP) compliance settlement language
  • Appealing unrelated conditional payments demanded by CMS recovery contractors
  • Assuring that the MSP conditional payment debt has been fully satisfied

You Are Being Watched

All non-group health plans (NGHP) including all property & casualty insurers who insure auto no-fault (Med Pay/PIP) claims, workers’ compensation claims, premises Med Pay claims, get your assumption and/or termination of ongoing responsibility for medicals (ORM) reporting in order, a firm called MSP Recovery is coming after you. A recent 11th Circuit decision in MSPA Claims 1, LLC v. Ocean Harbor Casualty Insurance (Case No. 2015-1946-CA 06) is granting class certification paving the way for recovery of millions of dollars for Medicare or Medicare Advantage plans nationwide.

According to a recent article in Daily Business Review, MSP Recovery, LLC, has the ability to determine if someone who has an incident, such as a car accident or a slip-and-fall and an insurance carrier has reported assumption of ongoing responsibility of medicals (ORM) to the Centers for Medicare and Medicaid Services (CMS) for primary payer responsibility .

MSP Recovery, LLC has developed a sophisticated system to identify no-fault claims by collecting and matching data including CMS reports, police reports, ambulance transport records, insurance declaration sheets, and no-fault personal injury protection/medical payout sheets.

MSP Recovery, LLC plans to file lawsuits across the country on behalf of many Medicare Advantage plans (MAPs) to recover conditional payments in which an applicable plan has demonstrated responsibility to pay by assumption and reporting to CMS of ORM.

Your Data is Being Mined

Presumably, MSP Recovery, LLC is able to use the Medicare Secondary Payer Recovery portal (MSPRP) to identify specific Medicare beneficiaries that have had ORM reported from the police or ambulance reports.

For commercial general liability policies covering premises slip and fall cases, if there is a no-fault/med pay policy provision, then the applicable plan is required to report ORM via Section 111 mandatory insurer reporting (MIR). If a med pay claim is made by the Medicare beneficiary after being treated, these claims can be identified via an ISO Claim Search subscription.

Since compensable workers’ compensation claims involving Medicare beneficiaries are required to report to CMS assumption of ORM, state departments of industrial relations may be accessed as well.

What do I do to avoid being brought into a Class Action?

Do not assume and report ORM if a no-fault claim has not been made by a Medicare beneficiary, where no treatment is sought, or if there is a legitimate statutory or coverage basis for the claim denial.

Do not forget to report to CMS an accurate ORM termination date. ORM should be terminated when policy limits have been exhausted, the policy period has expired, when CMS has approved an MSA after settlement, when there is a settlement that included medical expenses, or where there is a judgment or arbitration award that has occurred that disposed of related medical expenses.

Do not ignore or refuse to pay Medicare or MAPs who have demanded or notified you of potential conditional payments you may owe.

When in doubt, consult us. For questions, please contact Optum Settlement Solutions Division at 888-672-7674 or contactus@helioscomp.com

Recently Released and Soon to be Released Generics Expected to Reduce Claims Costs

Over the past several years, prescription drug costs related to workers’ compensation claims have risen dramatically, making it increasingly important for claims professionals to carefully evaluate this exposure and mitigate costs when possible. Optum Settlement Solutions understands that keeping up to date on new generic formulations is part of an overall strategic approach to reduce the cost of claims and ultimately the prescription allocation of a Medicare Set-Aside (MSA).

Every brand medication has a patent life that will ultimately expire. Once the patent expires, generic formulations become available on the market, typically at a lower cost. Although there is no set brand-versus-generic price differential upon generic entry, clinical analysis shows, on average, the generic has a 10% lower price at time of launch over its brand counterpart.

There were several brand name medications during 2016 and already in 2017, commonly prescribed in workers’ compensation claims, whose patents expired with their Food and Drug Administration (FDA) approved generic formulations released to the market.

Generics released in 2016 and first quarter of 2017:

Intermezzo (Zolpidem sublingual tablet): Sedative/hypnotic which is FDA approved for the treatment of insomnia. This is the only indication The Centers for Medicare and Medicaid Services (CMS) currently accepts for inclusion of Intermezzo (Zolpidem) in an MSA. Brand: $13.60/tab* Generic: $10.03/tab* (all strengths)

Frova (Frovatriptan 2.5mg): Central serotonin-receptor 1B and 1D agonist which is FDA approved for the treatment of acute migraine attacks with or without aura. This is the only indication CMS currently accepts for inclusion of Frova (Frovatriptan) in an MSA. Brand: $88.35/tab* Generic: $72.27/tab*

Nasonex (Mometasone Furoate 50mcg/actuation nasal spray): Medium –potency synthetic corticosteroid with anti-inflammatory, antipruritic, and vasoconstrictive properties which is FDA approved for the treatment of allergic rhinitis and allergic rhinitis prophylaxis. These are the only indications CMS currently accepts for inclusion of Nasonex (Mometasone Furoate) in an MSA. Brand: $16.74/gm* Generic: $15.07/gm*

Voltaren Gel 1% (Diclofenac Gel): Topical non-steroidal anti-inflammatory which is FDA approved for the treatment of osteoarthritis of the feet, ankles, knees, wrists, hands, and elbows. It is utilized most often in workers’ compensation claims for the treatment of inflammation and mild to moderate pain. While not FDA approved indications, CMS recognizes these as “medically accepted” indications for use on the body parts listed above and will include Voltaren Gel (Diclofenac Gel) in an MSA. It is considered to be utilized off-label when applied to other body parts such as the neck, shoulder or back and CMS will exclude this medication from the MSA. Brand: $0.49/gm* Generic: $0.54/gm* (Note: currently the generic formulation is more expensive, but as more manufacturers release their generic products the cost should become more competitive and decrease).

Nuvigil (Armodafinil): A psychostimulant which is FDA approved for the treatment of circadian rhythm disruption, narcolepsy, and sleep apnea. It is utilized most often in workers’ compensation claims off-label for daytime somnolence or fatigue due to the utilization of narcotic pain medications which is not recognized by CMS as an accepted indication (FDA or “medically accepted”); therefore, it would be excluded from the MSA for this diagnosis. Brand: 50mg, $8.86/tab, 150,200, & 250mg, $26.60/tab* Generic: 50mg, $7.26/tab, 150,200,250mg $21.86/tab*.

Seroquel XR (Quetiapine Fumarate Extended Release): Atypical antipsychotic which is FDA approved for the treatment of bipolar disorder, schizophrenia, and depression. These are the only indications CMS currently accepts for inclusion of Seroquel XR (Quetiapine Fumarate Extended Release) in an MSA. It is most often utilized in workers’ compensation claims for the treatment of depression. Brand: e.g., 200mg strength, $19.47/tab* Generic: 200mg, $15.52/tab* (Note: All strengths are available in generic formulation).

Pristiq (Desvenlafaxine Succinate): Serotonin-norepinephrine reuptake inhibitor which is FDA approved for the treatment of depression. This is the only indication CMS currently accepts for inclusion of Pristiq (Desvenlafaxine Succinate) in an MSA. Recently released in March 2017, no generic price available for comparison at this time.

*Current pricing based on lowest Redbook AWP

Generics to be released later in 2017:

Relpax (Eletriptan): Serotonin agonist which is FDA approved for the treatment of acute migraine attacks with or without aura. This is the only indication CMS currently accepts for inclusion of Relpax (Eletriptan) in an MSA.

Proair HFA (Albuterol Sulfate inhaler): Moderately selective short-acting beta -2 receptor agonist which is FDA approved for the treatment of acute bronchospasm and exercise-induced bronchospasm prophylaxis. These are the only indications CMS currently accepts for the inclusion of Proair HFA (Albuterol Sulfate) in an MSA.

Viagra (Sildenafil): Phosphodiesterase type 5 inhibitor which is FDA approved for the treatment of erectile dysfunction (ED) and pulmonary hypertension. CMS accepts the indication of pulmonary hypertension for inclusion of Viagra (Sildenafil) in an MSA; however, Viagra (Sildenafil) is Part D excluded for treatment of erectile dysfunction and would not be included by CMS in the MSA for this diagnosis.

Generics can help to lower the cost of the claim:

As healthcare expenditures continue to climb, the effect has been felt in the workers’ compensation industry. Generic medications play a key role in helping to lower costs. It is important, as an industry, we keep up to date on generic availability and intercede when necessary if generics are not being utilized by the treating physician. Optum, being a leader in the industry, has products and programs which can assist clients with managing and mitigating prescription drug costs. These include identification of claims where generic options are available (based on availability of data) and, when applicable, reaching out to the treating physician to discuss conversion to lower cost prescription drug alternatives.

For questions, please contact our Settlement Solutions Division at 888-672-7674 or contactus@helioscomp.com

CRC Returns $125 Million to Medicare from Group Health Plans Conditional Payments in 2015. No-Fault Insurers and Work Comp Plans are Next in 2016!

Coordination of Benefits and RecoveryOn May 23, 2016, the Centers for Medicare and Medicaid Services (CMS) Coordination of Benefits and Recovery (COBR) Commercial Repayment Center (CRC) published its report to Congress as required by Section 1893(h) of the Social Security Act for Fiscal Year (FY) 2015.

This is the second annual report for the CRC, a national contractor utilized by CMS to identify and recover primary payments mistakenly made by the Medicare program when another entity had primary payment responsibility. The CRC’s work to date has only included the identification and recovery of mistaken primary payments when beneficiaries had coverage through an employer-sponsored Group Health Plan (GHP) arrangement in addition to their coverage under the Medicare program. Because as of October 1, 2015, the CRC began to identify and recover payments mistakenly made by Medicare when a Non-Group Health Plan (NGHP) applicable plan (that is, a Liability insurer, No-Fault insurer, or Workers’ Compensation entity) accepted Ongoing Responsibility for Medical (ORM) and thereby had or has primary payment responsibility, in FY 2016, CMS will expand the CRC’s workload to include the recovery of certain conditional payments where a NGHP applicable plan had or has primary payment responsibility.

As a result, the work process, ability to handle volume, identified mistaken payments, and astounding collections recovery reported here by CRC may be a telling sign of things to come in the NGHP world. If so, watch out self-insureds, liability insurers, no-fault insurers, and workers’ compensation entities or plans, as the CRC is transforming conditional payment recovery from a laissez-faire, slow moving, without deadlines process into a regimented, aggressive, deadline and results driven process.

Group Health Plans and Non-Group Health Plans

The report indicates that “Medicare Secondary Payer (MSP) program involves two broad categories: Group Health Plan (GHP) and Non-Group Health Plan (NGHP). The term “GHP” refers to the arrangement between the employer or other plan sponsor (such as a union or employee health and welfare fund) and the insurer or claims-processing TPA. The term “NGHP” specifically refers to Liability insurance (including self-insurance), No-Fault insurance or Workers’ Compensation. Under the provisions of 42 U.S.C. §1395y(b), the Medicare program can generally only make secondary payments when a payment has been made (or can reasonably be expected to be made) by these GHPs or NGHP applicable plans.”

Data Collection Through Mandatory Insurer Reporting

The report also provides that “CMS routinely collects information about any additional coverage a beneficiary may have or had for a specified period of time. Data collection activities include mandatory insurer reporting, as required by Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Section 111), codified at 42 U.S.C. § 1395y(b)(7) and (b)(8). This data is compiled and updated as necessary. When a medical claim is submitted for payment under Part A or Part B of the Medicare program, Medicare reviews the beneficiary’s records to determine if the Medicare program has primary payment responsibility, or if another entity has that responsibility.”

Identifying Mistaken Payments

In addition, the report also clarifies that “in certain situations after a Medicare claim is paid, CMS may receive new or updated information about health coverage other than Medicare benefits. The CRC reviews new and updated GHP records to determine whether Medicare may have mistakenly paid any claims as the primary payer. Once the CRC identifies mistaken payments, it recovers the payment from the GHP. In addition to recoveries it has initiated, the CRC maintains all open GHP recovery cases (and debts) that were established under previous MSP recovery contractors.”

During the time period for this report, the CRC only reviewed GHP MSP occurrences as they were received and updated to determine whether any primary payments were mistakenly made for a given beneficiary. As of October 1, 2015, the CRC has also been updating NGHP records to determine whether Medicare may have mistakenly paid any claims as the primary payer. In GHP situations, “when the CRC identifies a potential mistaken payment, it issues a Primary Payment Notice (PPN) to the entities that CMS believes had primary payment responsibility (typically the employer or other plan sponsor and the insurer or claims processing TPA).” In NGHP situations, when the CRC identifies a potential mistaken payment, it issues a Conditional Payment Notice (PPN) to the entities that CMS believes had primary payment responsibility (typically the self-insured, liability insurer, no-fault insurer, or workers compensation entity or plan).The notices “request information, but more significantly provide notice of any mistaken payments made by Medicare that may be the responsibility of the GHP or NGHP.”

Recovering Mistaken Payments

Once the CRC has identified mistaken payments made by Medicare which are the responsibility of a primary payer, “the CRC then issues a letter that demands repayment (called a “Demand” letter) from the entities that should have paid as primary. This Demand notifies the identified debtors of the existence of the debt and includes claim specific information. The Demand also includes instructions for how to repay or rebut the debt, and consequences of failure to resolve the debt within the identified timeframe. In response to the Demand, identified debtors may make payment to Medicare. Interest is assessed on any unresolved balance after 60 days (interest accrues from the date the Demand is issued, but is not assessed unless there is an outstanding balance 60 days after issuance of the Demand). If any portion of the debt remains unresolved, the CRC will notify the identified debtor of Medicare’s intent to refer the debt to the Department of the Treasury for collection. Failure to resolve the debt after that notice is issued results in referral of the debt to the Department of the Treasury for collection.”

MSP CRC FY 2015 Results

The report highlights:

[I]n FY 2015, CRC issued 31,968 Demand letter packages relating to 41,847 individual beneficiaries, representing $585.19 million in potential mistaken payments made by the Medicare program. In response to these Demand letters, the CRC received information that validated $292.2 million as correctly identified mistaken payments, representing an increase of almost 25% over the $234.2 million identified in FY 2014. The CRC processed collections of $154.29 million on behalf of the Medicare program, which represents an increase of almost 140% over the $64.4 million in collections processed in FY 2014. Taking into account refunded excess collections of $4.69 million; the CRC posted $149.6 million in net collections. This is an increase of over 150% compared to the $59.3 million in net collections in FY 2014. Considering agency administrative costs of $24.55 million (including contingency fees paid to the CRC), CMS realized a return of $125.05 million dollars to the Medicare trust funds as a direct result of this program, an increase of 147% over the return of $50.6 million for FY 2014.

[ . . . ]

[T]he CRC’s net collections totaled $149.6 million in FY 2015. This amount includes mistaken payments identified through the end of FY 2015 (collection efforts will continue into FY 2016 for mistaken payments identified in FY 2015). A total of $144.21 million of these payments were direct payments (that is, checks received from debtors). During FY 2015 the CRC processed $10.08 million in collections from the Department of the Treasury on delinquent debts. In addition, $4.6 million in excess collections were identified and refunded to the identified debtors.

The Commercial Repayment Center and NGHP Recovery

The report continues:

As with other recovery contractors engaged by CMS and in accordance with the Tax Relief and Health Care Act, the CRC is paid on a contingency fee basis. The amount of the contingency fee is a percentage of the mistaken payment that the identified debtor has returned to the Medicare program. The CRC negotiated its specific contingency fee at the time of the contract award, and may only collect its fee once payment has been applied to a specific debt. In the event that excess collections have been made and a refund must be made to the identified debtor, the CRC must refund the contingency fee related to those collections.

As was started in October of 2015, during FY 2016,

[T]he CRC workload will expand to include the recovery of certain NGHP conditional payments where an applicable plan (a self-insured, liability insurer, no-fault insurer, or workers’ compensation entity or plan) had or has primary payment responsibility. The CRC will recover directly from the applicable plan as the identified debtor when the applicable plan reports that it has ORM or otherwise notifies CMS of its primary payment responsibility.

Conclusion

The identified and recovered amounts reported here by the CRC during FY 2015 are impressive. They may also be a telling sign of things to come in the NGHP world. If so, watch out self-insureds, liability insurers, no-fault insurers, and workers’ compensation entities or plans, as the CRC is transforming the conditional payment recovery world. Given the better information captured through mandatory reporting, the increase in the number of entities and individuals reporting such claims and thereby complying with the MSP law, now seeking pre-settlement reimbursement of such mistaken Medicare payments if ORM has been accepted, and the contingent nature of the fee awardable to the CRC for such recovery, the CRC is about to change 35 years of conditional payment resolution history in the no-fault, med-pay, PIP, and workers compensation industries. As always, Optum Settlement Solutions will continue to keep you updated on all activities associated with the CRC and its attempts to recoup conditional payments prior to settlement from self-insureds, no-fault insurers, liability carriers, and workers compensation plans when ORM has been accepted or established.