Tag Archives: DHHS

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 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.

ICD-10 Implementation Delayed until October 1, 2015

Yesterday, the Senate passed HR 4302, the SGR Doc Fix bill that had previously been passed by the House on Thursday, March 27, 2014.  HR 4302 primarily seeks to provide a one-year patch for physician reimbursement rates under Medicare, pushing the effective date past the end of the current congress. Of interest to our clients is Section 212 of the bill that precludes HHS from implementing ICD-10 coding until October 1, 2015.  The bill can be found here.  Now that the bill has been passed by the Senate, it is expected to be signed by President Obama in the very near future.

The passage of HR 4302 should prompt CMS to issue an alert and an update to the current MMSEA Section 111 User Guide notifying the industry that implementation of ICD-10 coding will be delayed.

PMSI is already equipped to handle the anticipated conversion to ICD-10 in October of 2014 but due to the complex process involved, understands the reasoning for a one year extension as provided in HR 4302.  PMSI’s MedicareConnect for MMSEA Section 111 Reporting is ready to report both ICD-9 and/or ICD-10 coding and we will continue to enhance functionality as necessary to provide an industry leading solution to the industry. For any questions, please contact JustRegister@PMSIonline.com.

CMS Clarifies Reporting Threshold for Liability Settlements

On February 19, 2014, we issued a blog notifying subscribers that CMS had issued a Liability Insurance Reporting and Recovery Threshold pursuant to the SMART Act of $1000. On February 28, 2014, CMS issued another alert clarifying that its reporting threshold will be moved from $300 to $1000 for liability claims resolved on/after October 1, 2014.

The alert states the following:

An updated MMSEA Section 111 Non-Group Health Plan (NGHP) User Guide, Version 4.2, Chapters I – V is now available in the Downloads section of the NGHP User Guide page. This version documents the change in reporting threshold for certain liability insurance (including self-insurance) settlements, judgments, awards, or other payments. Please refer to page 1-1 of each Chapter for a summary of updates made.

The Centers for Medicare & Medicaid Services (CMS) would like to clarify for certain liability insurance (including self-insurance) settlements, judgments, awards,
or other payments:

  • The current mandatory reporting threshold for liability insurance (including
    self-insurance) Total Payment Obligation to the Claimant (TPOC) is $2000 and
    over for TPOCs dated on or after October 1, 2013.
  • The mandatory reporting threshold for liability (including self-insurance) TPOCs dated October 1, 2014 and after is changing from $300 to $1000. If the most recent TPOC Date is on or after October 1, 2014, and the cumulative TPOC Amount is greater than $1000, the TPOC(s) must be reported no later than the end of the RRE’s submission timeframe in the quarter beginning January 1, 2015.
  • Error code CJ07 has not been updated to reflect this change. Further guidance will be provided at a later date concerning changes to this error code to coincide with the new reporting threshold of $1000.

These changes will also be applied to the downloadable version of the MMSEA Section 111 Coordination of Benefits Secure Website (COBSW) User Guide, available on the COBSW.