Category Archives: Conditional Payments

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.

CMS Publishes Final Regulations on Conditional Payment Resolution via Web Portal

031016_1424_CMSPublishe1.jpgOn May 17, 2016, the US Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services (CMS) published final rules on 42 CFR Part 411, Obtaining Final Medicare Secondary Payer Conditional Payment Amounts via Web Portal. The final rule “specifies the process and timeline for expanding CMS’ existing Medicare Secondary Payer (MSP) Web portal to conform to section 201 of the Medicare IVIG and Strengthening Medicare and Repaying Taxpayers Act of 2012 (the SMART Act).” The final rule “specifies a timeline for developing a multifactor authentication solution to securely permit authorized users other than the beneficiary to access CMS’ MSP conditional payment amounts and claims detail information via the MSP Web portal.” The final rule also “adds functionality to the existing MSP Web portal by permitting users to notify CMS that the specified case is approaching settlement; obtain time and date stamped final conditional payment summary statements and amounts before reaching settlement; and ensure that relatedness disputes and any other discrepancies are addressed within 11 business days of receipt of dispute documentation.”

The 2013 SMART Act and Interim Final Rule

The Medicare IVIG and Strengthening Medicare and Repaying Taxpayers Act of 2012 (the SMART Act) was enacted on January 10, 2013. Section 201 of the SMART Act amended section 1862(b)(2)(B) of the Social Security Act by requiring “the establishment of an internet Web site (referred to as the ‘‘Web portal’’) through which beneficiaries, their attorneys or other representatives, and authorized applicable plans (as defined in section 1862(b)(8)(F) of the Act (42 U.S.C. 1395y(b)(8)(F)) who have pending liability insurance (including self-insurance), no-fault insurance, or workers’ compensation settlements, judgments, awards, or other payments, may access related CMS’ MSP conditional payment amounts and claims detail information.”

On September 20, 2013, CMS published an interim final rule with comment period (IFC) that specified “a timeline for developing a multifactor authentication solution to securely permit authorized users other than the beneficiary to access CMS’ MSP conditional payment amounts and claims detail information via the MSP Web portal, add functionality to the existing MSP Web portal that permits users to notify CMS that the specified case is approaching settlement; obtain time and date stamped final conditional payment summary statements and amounts before reaching settlement; and ensure that relatedness disputes and any other discrepancies are addressed within 11 business days of receipt of dispute documentation.” CMS received 21 timely public comments.

CMS Final Changes to 42 CFR Section 411.39 Regulations

After consideration of all of the comments received, CMS finalized the provisions included in the September 2013 IFC with the following modifications to § 411.39:

  • Paragraph (a), removed the definition of ‘‘Medicare Secondary Payer conditional payment information’’ to avoid redundancy and confusion.
  • Paragraph (b)(1)(ii), revised language
  • Paragraph (b)(2), removed language related to Web portal functionality before 1/1/2016.
  • Paragraph (c)(1)(iii), removed the claims refresh requirement.
  • Paragraphs (c)(1)(iv) and (v), revised the language to clarify that a claim, meaning an individual conditional payment amount, or line item, on a payment summary statement, may be disputed once and only once. An individual or entity may submit disputes more than once, but never for the same conditional payment or line item.
  • Paragraph (c)(1)(viii), revised the language to clarify that settlement information must be submitted within no more than 30 days of reaching settlement in order for CMS to remain bound by any final conditional payment amount it provided through the Web portal.
  • Paragraph (c)(2), revised the language to clarify that a final conditional payment amount may be requested at any time after a recovery case has been posted on the Web portal.

Accessing Conditional Payment Information via the Web Portal

A beneficiary may access his or her Medicare Secondary Payer conditional payment information via the Medicare Secondary Payer Recovery Web Portal so long as the beneficiary creates an account to access his or her Medicare information through the CMS website and the appropriate Medicare contractor has received initial notice of a pending liability insurance (including self-insurance), no-fault insurance, or workers’ compensation settlement, judgment, award, or other payment and has posted the recovery case on the Web portal.

An applicable plan may obtain read only access of conditional payment information via the MSP Recovery Portal if the applicable plan obtains from the beneficiary, and submits to the appropriate CMS contractor, proper consent to release. An applicable plan may only obtain a final conditional payment amount related to a pending liability insurance (including self-insurance), no fault insurance, or workers’ compensation settlement, judgment, award, or other payment if the applicable plan has obtained from the beneficiary, and submitted to the appropriate CMS contractor, proper proof of representation.

Notifying CMS 120 Days Before Settlement, Judgment, Award, or Other Payment

Up to 120 days before the anticipated date of a settlement, judgment, award, or other payment, the beneficiary, or his or her attorney, other representative, or authorized 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.

CMS Compiles Conditional Payment Information and Post it on Web Portal Within 65 Days

The Medicare contractor compiles claims for which Medicare has paid conditionally that are related to the pending settlement, judgment, award, or other payment within 65 days or less of receiving the initial notice of the pending settlement, judgment, award, or other payment and posts a recovery case on the Web portal.

Resolving Disputed Discrepancies Within 11 Business Days

The beneficiary, or his or her attorney, or other representative may then address discrepancies by disputing individual conditional payments, once and only once, if he or she believes that the conditional payment included in the most up-to-date conditional payment summary statement is unrelated to the pending liability insurance (including self-insurance), no-fault insurance, or workers’ compensation settlement, judgment, award, or other payment.

The dispute process is not an appeals process, nor does it establish a right of appeal regarding that dispute. There is no administrative or judicial review related to this dispute process. However, disputes submitted through the Web portal will be resolved within 11 business days of receipt of the dispute and any required supporting documentation.

Requesting a Time and Date Stamped Summary Statement Within 3 Days of Settlement

When such disputes have been fully resolved, the beneficiary, or his or her attorney or other representative, may download or otherwise request a time and date stamped conditional payment summary statement 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 statement will constitute Medicare’s final conditional payment amount. However, if any claim disputes have not been fully resolved, he or she may not download or otherwise request a final conditional payment summary statement.

Submitting Documentation Within 30 Days of Settlement, Judgment, Award, or Payment

Within 30 days or less of securing a settlement, judgment, award, or other payment, the beneficiary, or his or her attorney or other representative, must submit through the Web portal documentation of the date of settlement, judgment, award, or other payment, including the total settlement amount, the attorney fee amount or percentage, additional costs borne by the beneficiary to obtain his or her settlement, judgment, award, or other payment. If settlement information is not provided within 30 days or less of securing the settlement, the final conditional payment amount obtained through the Web portal is void.

Procurement Costs Pro Rata Reduction and Issuance of Final Recovery Demand Letter

Once settlement, judgment, award, or other payment information is received, CMS will apply a pro rata reduction to the final conditional payment amount in accordance with § 411.37 and will issue a final MSP recovery demand letter.

Resolution of conditional payments continues to be a challenge for many beneficiaries, attorneys, corporations and their insurers. Case law continues to demonstrate it is creating havoc on settlements and producing substantial liability to beneficiaries, to beneficiaries’ attorneys and law firms, to self-insureds, and to insurers. These latest changes, brought about by the SMART Act, are well meaning. Their purpose is to provide all parties involved with a consistent mechanism to be able to resolve conditional payments on an expedited basis. However, there are strict time limitations that if not adhered to, will prevent parties from enjoying the quick and efficient resolution promised by the creation of Section 411.39. Optum Settlement Solutions’ conditional payments resolution team will assist clients sign up for the web portal, will help clients notify CMS of a potential settlement 120 days prior to taking place, will review the conditional payment letter produced within 65 days, will dispute any discrepancies, will update clients upon resolution of such discrepancies within 11 days, will ask for a demand amount within 3 days of the settlement date, will forward to CMS settlement documentation within 30 days of the settlement date, and once a pro-rata share of procurement costs have been deducted, will provide our client with a final demand from CMS to be paid within 60 days for final and complete resolution. If you would like to learn more about our conditional payments resolution products and services, please contact us at 888.672.7674, or at contactus@helioscomp.com.