Tag Archives: Department of Health and Human Services

Summary of Final Rule: Conditional Payment Appeals Process for Applicable Plans

On February 27, 2015, CMS published in the Federal Register the SMART Act Appeal Final Rule which can be located at 80 Fed. Reg. 10611. The rule can be found here and will go into effect on April 28, 2015. CMS had previously issued the Proposed Rule on this very topic on December 27, 2013. Materially, the Final Rule is effectively the same as the Proposed Rule without substantive change. While some greater strides toward more operational efficiencies could have been made in finalizing the Final Rule, Helios applauds CMS finalizing this proponent of the SMART Act within two years of the law’s enactment.

What the Final Rule does: The Final Rule puts into place a conditional payment appeals process for “applicable plans.” An applicable plan means liability insurance (including self-insurance), no-fault insurance, or a workers’ compensation law or plan. Prior to implementation of this Final Rule, applicable plans had no appeal rights with regard to conditional payment demands from Medicare. With this final rule in place, applicable plans can now appeal final conditional payment demands issued by Medicare if the applicable plan disputes the amount or liability owed.

How the Appeals Process will work: Applicable plans’ appeal rights are the same process that beneficiaries, providers and others must use to dispute a conditional payment demand. It is a four-level appeals process which requires that the applicable plan exhaust its rights in the following order: (1) reconsideration of a claim by the CMS contractor; (2) evaluation of the claim by a Qualified Independent Contractor (QIC); (3) adjudication of the dispute by an Administrative Law Judge (ALJ); (4) and lastly a review of the ALJ decision by the Department Appeals Board’s Medicare Appeals Council. It has been noted that this current four-level appeals process can take up to four years to pursue. It was requested that CMS simplify this appeals process and skip the first two levels; however, CMS declined this suggestion.

What is Not Subject to Appeal: Through the rulemaking process, industry stakeholders requested that CMS allow applicable plans to appeal issues other than the conditional payment amount. In particular, it was requested that CMS allow the applicable plan to dispute who or which entity that CMS would pursue an MSP recovery from. CMS declined this request, citing its authority within the MSP to recover from the beneficiary, the primary payer or any other entity receiving proceeds from the payment by the primary plan. Stakeholders also requested that an applicable plan be able to appeal an initial conditional payment demand, even if the final amount of the repayment was not yet available in a Final Demand letter. CMS also declined this request; Applicable Plans may only appeal from Final Demands.

Who May Appeal: It was requested that either the applicable plan or the beneficiary be able to appeal where the identified debtor is either the applicable plan or the beneficiary. CMS declined this request and has stated that the Final Rule makes appeal rights available to the identified debtor, not potential identified debtors. Therefore, applicable plans may only appeal under this process if they are the identified debtor in the Final Demand letter. Additionally, beneficiaries may only appeal under previously existing conditional payment processes if the beneficiary is the identified debtor in the Final Demand Letter.

Commenters also had requested that applicable plans be able to appoint third parties/agents as representatives in the appeals process. CMS contends that applicable plans already have this right, and further specified that the party appointing a representative must include the beneficiary’s Medicare health insurance claim number (HICN) on the appointment of representation.

Notice of Appeal: It was also requested that either the applicable plan should be copied on a recovery demand with the beneficiary as the identified debtor; or all potential debtors should be copied on all actions (that is, recovery demands, appeal requests, all notices or decisions). CMS declined this request citing that additional notice would not be necessary since only the identified debtor can appeal the Final Demand. Additionally, it would cause “an increase in administrative costs and would cause confusion in many instances, particularly where beneficiaries would receive copies of demands issued to applicable plans.”

Medicare Advantage Plan Conditional Payment Appeals: Commenters requested that the proposed rule be revised to include appeal rights for applicable plans when a Medicare Part C organization or Part D plan pursues an MSP based recovery from the applicable plan. CMS stated that the request was outside the scope of the rule and that the SMART Act provision for applicable plan appeals amended only the MSP provisions for Medicare Part A and Part B.

MSA Appeals: It was requested that the proposed rule should address appeals related to the determination of WCMSA amounts for future medicals. CMS stated that this issue is outside of the scope of the rule and that this particular issue would be addressed separately. As an aside, if CMS does create an appeals process for MSAs, it would likely be created outside of the legislative process which could allow for the appeals process to be implemented more quickly.

In summary, the Final Rule provides a much needed conditional payment appeals process for Applicable Plans. While the four-level appeals process may be rumored to be slow, Applicable Plans now have the same rights of appeal that previously only existed for others in the Medicare program. The SMART Act is continuing to steadily create a more efficient process and reform the MSP system.

CMS Issues Final Rule Establishing Conditional Payment Appeals Process Pursuant to the SMART Act

We previously had posted a blog that CMS had issued a proposed rulemaking regarding an appeals process to be utilized by applicable plans for conditional payment disputes. For background on the rulemaking and to view our prior blog, please click here.

Today, CMS issued a final rule implementing provisions of the Strengthening Medicare and Repaying Taxpayers Act (the SMART ACT), which establishes a right of appeal and formal Medicare Secondary Payer (MSP) appeals process for applicable plans, for situations where the Secretary seeks to recover payments from applicable plans. Applicable plans include liability insurance (including self-insurance), no-fault insurance, and workers’ compensation laws or plans. The SMART Act further requires that the Medicare beneficiary who received the items and/or services in question be notified of the applicable plan’s intent to appeal.

CMS has not yet published the final rule in the Federal Register. Once the final rule is published, we will provide more specific feedback and guidance on the final rule.


CMS Withdraws Rulemaking on MSP and Future Medicals

We previously posted blogs regarding CMS working on a proposed rulemaking regarding Medicare Secondary Payer requirements and future medicals. Our initial blog with more information on this ANPRM can be found here. Our secondary blog which indicated that CMS was looking to move to the NPRM stage of the rulemaking can be found here.

CMS never did resume rulemaking last year in September as was previously indicated by CMS on their regulatory calendar. Instead, CMS took no noticeable action on the rulemaking until October 8, 2014 where they withdrew the rulemaking altogether. Notice of the withdrawal can be found here: http://www.reginfo.gov/public/do/eoDetails?rrid=123255.

Within the rulemaking, CMS was considering providing various options pertaining to protecting Medicare’s interests with regard to future medicals in both workers’ compensation and liability cases. The most well known part of the rulemaking was around allocations in liability cases, as this would be the first official guidance published/provided by CMS with regard to allocations in liability cases, also known as liability MSAs (LMSAs).

So where does this leave us all with regard to allocations in liability cases, now that CMS has withdrawn the rulemaking? Although CMS has, for the moment, chosen not to clarify when and how parties can take Medicare’s future interests into account in liability cases, the Medicare Secondary Payer laws (MSP) still mandates that Medicare remain the secondary payer, both pre-settlement as well as post-settlement.

Additionally, there has been speculation in the industry that this is not the last we will see of this rulemaking, and that CMS plans to later re-draft and re-file the proposed regulations. It is unclear if and when this will happen, as CMS has silently withdrawn this rulemaking with no public comment. Therefore, the industry should expect that this rulemaking will eventually resurface.

While many have applauded the withdrawal of this rulemaking, an argument could be made that there would have been some benefit to finalizing the rulemaking. Perhaps it would have brought some certainty within the liability industry regarding when and how Medicare expects its future interests to be taken into account in liability cases.

There has continued to be ongoing confusion as to when and how to take Medicare’s interests need to be taken into consideration with regard to the future medical component of these claims due to the lack of guidance from CMS. We have seen this demonstrated in various case law across the country where courts have issued divergent opinions on whether LMSAs are required under the MSP.

Hearing from CMS on this issue would have provided some solidarity on this contentious issue so that liability settlements with Medicare beneficiaries could occur and the parties could have confidence that their settlement has complied with Medicare’s interests.

Helios will keep subscribers updated on any additional developments on this issue and forthcoming rulemakings.

CMS to Extend Deadline for Reporting SSNs?

Pursuant to section 204 of the SMART Act, within 18 months of the enactment of the SMART Act (which is July 10, 2014), CMS was required to modify MMSEA Section 111 Reporting Requirements so that an RRE was no longer required to report social security numbers (SSNs) or health insurance  claim numbers (HICNs).  However, within section 204, CMS was provided with the ability to extend this deadline for 1 year periods if the Secretary notifies Congress that without the extension, it would threaten patient privacy or the integrity of the Medicare Secondary Payer (MSP) program.

Now that July 10th has came and CMS has not implemented this change, it is expected that CMS will soon file for the 1 year extension; however, we remain hopeful that CMS will soon implement this provision of the SMART Act.

In the meantime, RREs that are unable to obtain a beneficiary’s SSN have a few options to remain compliant. CMS has provided the industry with a method to document and demonstrate good faith efforts to obtain SSNs from Medicare beneficiaries through the use of a form that has model language created by CMS to request the information required for reporting under MMSEA Section 111. This document can be found here.

Additionally, there is case law precedent in which a carrier refused to tender a settlement due to the beneficiary not providing their SSN (See Seger v. Tank Connection, LLC and Hackley v. Garofano). In these cases, the courts sided with the RREs and required the beneficiaries to provide their SSN so that the RRE could be in compliance with the MMSEA and not subject to fines.

Therefore, if needed, RREs can document their good faith efforts to obtain SSNs and/or bring the matter to court if the beneficiary refuses to provide their SSN. We will keep our subscribers updated on any developments on the SMART Act and any filings by CMS with respect to this particular provision.