Tag Archives: WCMSA

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 Publishes Self Administration Toolkit for WC Medicare Set Asides

Insurance LawOn March 21, 2014, CMS published its first Self Administration Toolkit for Workers Compensation Medicare Set Aside Arrangements (WCMSA). CMS had previously provided significant leadership on WCMSA administration matters through the several Policy Memos and Reference Guide it had published over the preceding 14 years. However, this was their first attempt at focusing on self administered WCMSAs, providing suggested or recommended letters and forms to be used throughout the process.

On January 5, 2015, CMS published a new, amended version 1.1 of the Self Administration Toolkit for WCMSAs. The Toolkit is broken down into 14 sections: Introduction, Setting Up the WCMSA Bank Account, How Your MSA is Funded, Using the Account, What to Tell Your Health care Providers, reviewing and Paying Your Bills, Keeping Records, Annual Attestation, Reporting Changes, Inheritance, Where to Get Help, Letters and examples, and Glossary.

Section 1, Introduction, makes it clear that a Medicare beneficiary may self administer his or her WCMSA. If so, the Toolkit will help him or her manage the account appropriately, satisfy Medicare’s interests related to future medical care, and assure Medicare will pay for future costs when the WCMSA is exhausted or depleted.

Section 2, Setting Up the WCMSA Bank Account, indicates that the beneficiary must deposit the WCMSA money in its own account, separate from any other accounts he or she may have. The account must be an interest bearing account, insured by the Federal Deposit Insurance Corporation (FDIC).

Section 3, How Your WCMSA is Funded, provides that the WCMSA may be funded either lump sum or structured. If structured, the first check should cover the first 2 years of treatment. All monies, whether paid lump sum or structured, should be deposited into the WCMSA account.

Section 4, Using the Account, outlines what medical and prescription expenses can be paid out of the WCMSA account. As has been communicated by CMS previously, WCMSA account funds can only be used to pay for medical treatment and prescription drugs related to the WC injury that are Medicare covered.

A beneficiary may also use the WCMSA account to pay for cost of copying documents, mailing fees and postage, any banking fees related to the account, and income tax on interest income from the account.

A beneficiary may not use the WCMSA account to pay for fees for trustees, custodians, or other professionals hired to administer the account, expenses for administration of the WCMSA, attorney costs for establishing the WCMSA, and Medicare co-payments and deductibles.

Section 5, What to Tell Your Health Care Providers, advises the beneficiary to notify his or her health care providers about the WCMSA so that such providers bill the beneficiary directly, and the beneficiary is then able to pay such bills out of the WCMSA account.

Health care providers may bill for medical care at full actual charges, or work comp fee schedule, depending on how the WCMSA was set up. Prescription medications should be billed based on Red Book Average Wholesale Price.

If a health care provider bills Medicare for work related treatment, the health care provider is responsible for refunding any payments received from Medicare for bills related to the treatment of the work comp injury. Such bills may then be paid to the health care provider from the WCMSA account.

Section 6, Reviewing and Paying Your Bills, reminds beneficiaries that they should review health care provider bills to make sure they are billing only for those items and services related to the WC injury and covered by Medicare.

Section 7, Keeping Records, makes it clear that the beneficiary needs to keep clear and accurate records of everything done with the WCMSA account, as these records will be used to determine if account funds were spent properly.

It is recommended that the beneficiary keep track of transaction date, check number, health care provider name, date of service, description of service, amount paid, deposit amount, and account balance.

Although beneficiaries should keep itemized receipts or proof of each payment, bank statements, and tax records, he or she will not submit these annually unless Medicare request such proof.

Section 8, Annual Attestation, requires the Medicare beneficiary to send an attestation every year, no later than 30 days after the anniversary date of the WC settlement, to Medicare Benefits Coordination & Recovery Center (BCRC) stating that the WCMSA funds were used appropriately.

The attestation must include the total spent for medical services, the total spent for prescription drugs, grand total of expenditures, total of interest income the account earned, and the balance of the WCMSA account at the end of the calendar year.

When the WCMSA account has no money left in it and there are no further deposits expected, the account is depleted or exhausted. Within 60 days of such depletion, the beneficiary must send the BCRC a final attestation letter indicating that the account has been completely exhausted. If Medicare is satisfied that the WCMSA funds have been spent appropriately, Medicare will pay for future treatment related to the work injury.

Section 9, Reporting Changes, reminds beneficiaries that if they move, he or she should send the new address to the bank that holds the WCMSA funds. If beneficiaries do not feel confident administering the WCMSA, they may seek advice from a lawyer or organization, or may appoint a representative to administer the account.

If for whatever reason Medicare entitlement is lost, the WCMSA funds may not be released, as such funds may be only be used to pay for future medical care related to the claim until exhausted.

Section 10, Inheritance, indicates that if death occurs before the WCMSA account is exhausted, the estate must pay for medical services provided before death so long as such expenditures are related to the work comp claim and are Medicare allowable. If there is money left after all bills are paid, the funds may be distributed according to the last will and testament, the settlement agreement, or state inheritance laws.

Section 11, Topics Unique to Structured WCMSA Accounts, provides that if there are structured funds left at the end of the year, such funds must remain in the account and carried forward to the following year, so that the beneficiary will then be able to use all funds to pay for medical care related to the WC claim.

If there is excess money any year thereafter, those funds must be carried forward too, on an ongoing basis, until all funds accumulated over the beneficiary’s life are appropriately used up, or inherited upon beneficiary’s death.

If however funds run out before the next structured payment or deposit is received, the beneficiary must send an attestation letter to the BCRC indicating that the account is temporarily depleted. The beneficiary should communicate this to his or her health care provider so they can then send the outstanding bills to Medicare until the next annual deposit to the WCMSA account is received.

If not yet a Medicare beneficiary, but have other insurance, the beneficiary should submit such bills to that insurance to pay for the WC injury until the WCMSA is funded again. If there is no other insurance, the beneficiary will have to pay out of pocket for such bills until the WCMSA is funded again.

Section 12, Where to Get Help, provides telephone numbers and web sites to assist beneficiaries with this process.

Section 13, Letters and Examples, offers sample documents and letters on all components of the WCMSA administration process, including letters for medical providers, pharmacy providers, lump sum annual attestation, exhausted lump sum account, structured annual attestation, temporary exhaustion structured attestation, permanent exhaustion structured attestation, and transaction record.

Section 14, Glossary, introduces terms and definitions commonly used or found throughout the WCMSA administration process.

The toolkit can be found at http://cms.hhs.gov/Medicare/Coordination-of-Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/Downloads/Self-Administration-Toolkit-for-WCMSAs.pdf. Accurate and proper administration of WCMSA funds is key to the success of the MSP program. It is clear, based on these latest attempts by CMS, that administration of WCMSAs is becoming a more significant component of the larger and always evolving and complex landscape of MSP compliance. As a result, adherence to these rules is highly encouraged.

29106aeRafael Gonzalez is Vice President of Strategic Solutions at HELIOS in Tampa, Fl. HELIOS is a national leader in MSP settlement solutions, including Mandatory Insurer Reporting, Conditional Payment Resolution, and Medicare Set Asides. HELIOS is the only national MSP compliance company providing pharmacy, medical providers, and durable medical equipment services as part of its MSA Professional Administration program services, thereby offering comprehensive, total-care solutions that mitigates risk and controls costs throughout the lifecycle of the claim. You may contact Rafael at rafael.gonzalez@helioscomp.com, or at 813.612.5592.

CMS Publishes WCMSA Reference Guide Version 2.3

ColumnsOn March 29, 2013, the Centers for Medicare & Medicaid Services (CMS) published its first Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide to “help stakeholders understand the process used by CMS for approving proposed WCMSA amounts and to serve as a reference for those choosing to submit such amounts to CMS for approval, including injured workers, employers, carriers, their attorneys, WCMSA agents or consultants, or other appointed representatives.” The WCMSA Reference Guide contains information compiled from all WCMSA Regional Office (RO) Memorandums issued by CMS, from information provided on the CMS website, from information provided by the Workers Compensation Review Contractor (WCRC), and from the CMS WCMSA Operating Rules.

On November 6, 2013, the WCMS Reference Guide was updated, adding material from the 4/11/2013 WCRC Town Hall presentation and the Operating Rules. On February 3, 2014, the Reference Guide was amended again, this time adding branding changes for the Benefits Coordination & Recovery Center (BCRC) transition. On April 24, 2014, section 4.1.4 on Hearing on the Merits of the Case was added, indicating that when a state WC judge approves a WC settlement after a hearing on the merits, Medicare will generally accept the terms of the settlement, unless the settlement does not adequately address Medicare’s interests.

On January 5, 2015, CMS published its latest edition of the WCMSA Reference Guide. Version 2.3 of the Guide includes the following changes:

  • Updated language to correspond with recent changes to letters.
  • Corrected reference from 42 CFR 411.46 to Section 1862(b)(2) of the Social Security Act.
  • Clarified reference to costs related to the workers’ compensation claim, rather than the compensable injury.
  • Clarified reference to future medical items and services as “Medicare covered and otherwise reimbursable.”
  • Clarified that CMS approves the WCMSA amount, not the WCMSA, upon submission of a request.
  • Correspondingly, clarified language referring to submission of a proposed WCMSA amount, rather than a WCMSA proposal.
  • Restated the comparison of fee-schedule vs. full-and-actual-costs pricing as the basis of pricing the proposed amount, rather than the basis of payment from an approved WCMSA account.
  • Clarified attestation vs. accounting wording.
  • Clarified procedural results when Medicare is not provided with information in response to a development request.
  • Removed the word “form” from references to documents that are not forms.
  • Added language to address schedule change for hydrocodone compounds from schedule III to schedule II.
  • Changed deadline for responding to development requests for submission through the WCMSA Portal to 20 from the previous 10 days.

http://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/Downloads/WCMSA-Reference-Guide-Version-2-3.pdf

Hydrocodone Combination Products

Hydrocodone combination products were reclassified effective October 2014 from C-III controlled substances to C-II controlled substances. Normally, C-IIIs require a new prescription after five refills or after six months, whichever occurs first. C-IIs require new prescriptions at intervals no greater than 30 days; however, a practitioner may issue up to three consecutive prescriptions in one visit authorizing the patient to receive a total of up to a 90-day supply of a C-II. WCMSA guidelines changed on January 1, 2015 for all new cases submitted after that date to allocate a minimum of 4 healthcare provider visits per year when schedule II controlled substances (including hydrocodone combination products) are used continuously, unless healthcare provider visits are more frequent per medical documentation. WCMSA Reference Guide Section 9.4.6.2

Development Requests Submitted via the WCMSA Portal

During its review, the WCRC may need to develop the case for additional information or documentation. If the submitter does not respond to the development letter within the allotted time frame (i.e., 30 days for cases submitted to the BCRC, 20 business days for cases submitted on the WCMSAP), the case is closed for lack of response. If the submitter does respond, but the response is insufficient, another request may be sent to the submitter. If more than one development request has been sent, the timestamp of the most recent request will be used to calculate the response time frame. WCMSA Reference Guide Section 9.4.1

As always, Helios Settlement Solutions will continue to monitor these changes and report on any effects or ramifications pertaining to same.

29106aeRafael Gonzalez is Vice President of Strategic Solutions at Helios. With over 25 years of experience in the workers compensation, liability, Medicare and Medicaid industry, Rafael serves as thought leader on all aspects of Medicare and Medicaid compliance, including mandatory reporting, conditional payments, and set asides. You may contact Rafael at rafael.gonzalez@helioscomp.com or 813.612.5592.

Helios is the new name for Progressive Medical and PMSI. Whether pharmacy, critical care, or settlement solutions, including mandatory reporting, conditional payments, or set aside allocations, approval, and administration, to learn how our creative and innovative tools, expertise, and industry leadership can help your business shine, visit www.firstfilltosettlement.com or call 800.777.3574.

Another Year Without Appeal Rights in Workers Compensation Medicare Set Asides

Insurance LawFrom the very beginning of the Workers’ Compensation Medicare Set-Aside (WCMSA) process, one of the consistent requests by both claimants and employer/carriers has been the inclusion of a review process that would allow both sides the opportunity to challenge Medicare’s decision on a set aside allocation. As Medicare began to require inclusion of prescription medications in WCMSAs, parties began to see their MSAs rejected by CMS more frequently and instead began receiving more and more counter-higher demands from Medicare, sometimes asking for double and triple the amount previously submitted to CMS for approval, and oftentimes even larger than the settlement amount reached by the parties and approved by the workers compensation judge or state commission.

For more than ten years, many of us involved in the MSA industry have been asking CMS for an appeals process that would allow the parties to question the reasonableness of Medicare’s counter-higher demands, and allow the parties to explain the rationality of their proposal. As a result, when the Centers for Medicare and Medicaid Services (CMS) announced its proposed expansion of the WCMSA Re-Review process on February 11, 2014, indicating that all requests for re-review would be handled by the Workers’ Compensation Review Contractor (WCRC) and resolved within 30 business days, I, along with many of our industry professionals, thought we were finally going to have an appeals process in the WCMSA program.

The announcement indicated that “the WCRC would direct the request for re-review to an internal group of experts skilled to review the identified issue. The experts that perform the re-review would not be the same specialists involved in the original determination. In certain situations, a re-review may be elevated by the WCRC to a CMS Regional Office. This level of review would occur in situations such as: failure to adhere to court findings; CMS policy disputes; carrier maintains Ongoing Responsibility for Medicals for treatment that has been included in approved WCMSA, etc.”

The announcement indicated that “CMS proposed to keep the limited current process, allowing for re-review requests to the WCRC at any time if a mathematical error was identified in the approved set-aside amount, or if the original submission included case records for another beneficiary.” In addition, CMS proposed to allow request for re-review submitted to the WCRC if “the original WCMSA was approved within the last 180 days; the case had not settled; no prior re-review request had been previously submitted for the at issue WCMSA; and, the re-review requested a change to the approved amount of 10% or $10,000 (whichever is more) for any of the following reasons:

  • Submitter disagreed with how the medical records were interpreted.
  • Medical records dated prior to the submission date were mistakenly omitted.
  • Items or services priced in the approved set-aside amount were no longer needed or there was a change in the beneficiary’s treatment plan.
  • A recommended drug should not have been used because it may be harmful to the beneficiary.
  • Dispute of items priced for an unrelated body part.
  • Dispute of the rated age used to calculate life expectancy.”

CMS asked for comments on all aspects of its proposal, “including comments on the timeframe, threshold and reasons for granting a re-review.” Comments on each of these were received by the March 31, 2014 deadline. However, although CMS indicated it would “schedule a Town Hall Teleconference and post implementation dates and detailed instructions on its website,” almost a year later, MSP stakeholders are still without a valid and meaningful appeals process to challenge CMS’ rejection of their proposed WCMSAs. Almost 14 years after the WCMSA approval process started, claimants and employer/carriers in work comp cases are still waiting for a re-review or reconsideration process that would allow them the opportunity to be heard, to disagree with and examine CMS’ counter-higher demands, present evidence, including medical records, depositions, and live testimony from medical professionals that can explain the reasonableness of medical services included or omitted in the WCMSA, as well as MSA professionals hired to create such allocations.

As we approach the end of 2014, with yet another year without appeal rights in work comp Medicare set asides, perhaps it is time to give up on the inconsistent CMS approval mechanism and the lack of a meaningful appeals process and instead begin to focus on finding alternative ways to make sure Medicare’s interests are properly considered and taken into consideration when settling entitlement to future medical care and prescription medications related to a work comp claim. Perhaps the time has come for the work comp industry to find a financially sound, secure and trusted way to make sure that by responsibly allocating for such future medical and prescription needs, every allocated dollar toward future medical care and medications related to the claim are in fact spent on such future needs.

At Helios, we assist our clients in taking control of the costs associated with MSP compliance. Whether a self insured, a third party administrator, or insurance carrier, we help our clients assure Medicare compliance by creating products and a process that will make sure such future medical and prescription needs related to the claim are appropriately taken care of at a reasonable and affordable cost.

Rafael Gonzalez is Vice President of Strategic Solutions at Helios. With over 25 years of experience in the workers compensation, liability, Medicare and Medicaid industry, Rafael serves as thought leader on all aspects of Medicare and Medicaid compliance, including mandatory reporting, conditional payments, and set asides. You may contact Rafael at rafael.gonzalez@helioscomp.com or 813.612.5592.