Developing a Medicare Set-Aside is not only a time-consuming and arduous process, but can also be unnecessarily expensive. There are many instances where tremendous sums of money are included in an MSA just because stakeholders were not diligent in analyzing what was included.

A case in point was a recent situation in which a medication the injured worker had taken only one time was set to be part of his lifetime medications in the MSA. Had this seemingly simple oversight not been flagged, it would have driven up the cost of the MSA by hundreds of thousands of dollars!

We hear all too often about injured workers who, unfortunately, fall through the cracks in the workers’ compensation system and are not appropriately cared for. While these represent only a small minority of cases, they generate headlines. Equally disturbing are stories of injured workers who’ve settled their cases and soon after find themselves out of money with no hope of paying for their future medical expenses, let alone moving on with their lives.

The goal of developing an MSA is to identify as accurately as possible the total cost that will be incurred during the injured worker’s life. The amount needs to include all expenses related only to the specific injury, as well as other treatments that may be needed later on.

Either party – injured worker or employer/payer – can wind up on the losing end of a settlement if it is not done correctly. This is why it is so important for all parties to carefully review the medications, procedures, and costs involved before signing off on an MSA.

Case Study (Provided by Tower MSA Partners): $270,917 in Savings from Physician Follow-up

An injured worker had been diagnosed with a variety of conditions stemming from a workplace injury, including depression, anxiety, complex regional pain syndrome and bilateral hand/arm pain with radiation to his right shoulder and neck. He was ready to settle his claim and leave the workers’ compensation system.

Among the six RXs included in the MSA projection was Nucynta 50mg. This opioid is meant to be a short-term treatment for moderate to severe pain. Not only is it highly addictive, but also extremely expensive. It comprised $245,721 of the MSA amount.

The worker had, understandably been treated by several physicians in the year before he agreed to settle. But the medical records were less than complete.

Total MSA Exposure — $326,925.

Solution:

With so many physicians involved, Tower’s physician follow-up team first obtained statements from each of the six providers involved in the worker’s treatment. They confirmed the last dates of services and whether medications had been continued or not. If they were, the name of the drug, dosage, and frequency for each was requested.

The physician who had prescribed Nucynta confirmed it was a one-time fill that was subsequently discontinued. The team identified several additional discrepancies in the statements from the physicians and had the physicians document the medical records with a revised medication list that reflected what the injured worker was actually taking and expected to need going forward.

Results:

Removing Nucynta from the medication list reduced the projected amount of the MSA by more than $245,000. An additional $81, 204 was also eliminated, based on the physicians’ statements

The MSA went from $326,925 to $56,008 — a savings of $270,917 and, with no negative impact on the injured worker!

Conclusion:

While the particular medication involved in this case was on the high-end of errors, the situation is all too familiar. Stakeholders often take information about current and future medications and treatments at face value, without delving into what is behind the numbers.

This case is typical in that a variety of physicians were involved, their records in many cases were incomplete, and there were medications included that had no bearing on the injured worker’s current, let alone future status.

Creating accurate MSAs takes time and skill. Those who undertake them need to ask questions and obtain all relevant information in order to come up with an amount that is fair to all sides.

Author Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

A thoughtful and critical review of your Medicare Secondary Payer (MSP) compliance program is a great exercise to perform annually.  Consider these questions and metrics:

Questions & Metrics to Assess Work Comp MSA Cost Drivers:

• What percentage of your Medicare Set-Aside (MSA) submissions are accepted?
• Can you identify the biggest cost drivers in your MSAs?
• What percentage of your CMS approved MSAs include opioids?
• What percentage of your approved MSAs include any pharmaceuticals?
• What is the average cost of prescription drugs on MSAs?
• Do you understand why CMS approves/denies MSA proposals?
• Are you overfunding/underfunding MSAs? How do you know?
• Do you know what documentation you need for approval of changes in medical treatment or pharmaceuticals?

If you were not able to confidently answer the questions above it might be time to make some changes to your MSP compliance program. Some claims and risk managers put together a program, let it run and hope for the best. Instead, using data analytics and continuously tracking outcomes and other performance indicators can significantly improve the process of preparing and submitting MSAs to the Centers for Medicare and Medicaid Services (CMS) — especially, where pharmaceuticals are concerned.

MSP Through the Years

It’s been approximately 15 years since the government ramped up its efforts to ensure Medicare doesn’t pay for medical services that should be funded by some other entity, including the workers’ compensation system.  At the time, organizations scrambled for ways to develop MSAs that would be approved by CMS.

The process for CMS approvals has evolved over the years. What was a fairly complicated system, to begin with, has turned into an extremely intricate series of steps that can befuddle even the most competent people in the industry – unless they have the benefit of highly advanced technological solutions combined with strong expertise.

For example, in addition to new regulations from CMS, state statutes and fee schedules are also constantly changing. Failing to keep tabs on them can make the process time consuming, costly and fraught with peril.

In the past 18 months, CMS has taken steps to intensify its efforts further. The agency has put millions of dollars into a new contractor and greatly updated its technology, making the process of identifying mistakes that much quicker and easier. It means anyone trying to stay in compliance with Medicare also needs to improve and upgrade their systems.

What the Metrics Can Tell Us

Most workers’ compensation payers would agree that pharmacy is the biggest cost driver for their MSAs. However, few know the answers to these key metrics:

• What is your current pharmacy spend on MSAs?
• What percentage of your CMS-approved MSAs include opioids?
• What percentage of MSAs are approved with or without drugs?
• What is the average cost of prescription drugs on your MSAs?

With medications comprising such a tremendous portion of MSA costs, it’s vital to have a clear understanding of the issue. This can only be accomplished by focusing on the metrics. By analyzing the data on opioids as well as other pharmaceuticals in terms of your MSAs that are approved, you can then begin to fully manage these costs.

Optimizing MSA Outcomes

Whether working with an MSA vendor or doing Medicare compliance on your own, several strategies are a must for success.

1. Identify metrics that drive the results you want to see, particularly where medications are concerned.
2. Measure your performance and modify processes, workflow, and technology to improve it. For example, look at the percentage of your MSAs with ongoing medical to see how much you have allocated for opioids. If the answer is anything more than zero, go back to the drawing board.
3. Examine current CMS performance and the most recent state statutes and fee schedules against CMS’s review methodology as defined in the most recent Workers’ Compensation MSA Reference Guide. If/when there are changes, update your system immediately. Once developed, this should be a simple verification, audit and sign-off process.
4. Analyze every CMS response against your internal best practices in MSA allocation, with a focus on pharmaceuticals and opioids. You want to know how you are performing against CMS in such areas as pricing, frequency and life expectancy.
5. Leverage Section 111 data to improve the CMS approval rate of MSAs.

To truly effect change in your Medicare compliance program requires examining certain metrics and taking steps to manage them best. For example:

6. What is the number of Medicare conditional payment searches and investigations initiated and the success rates for disputes and appeals, including dollars saved?
7. What type of clinical interventions have been initiated, what is their success rate and the average dollar amount saved because of them? This strategy can save many thousands of dollars per claim. Investigating each claim with an eye toward medical procedures anticipated and/or pharmaceuticals can yield surprising results. You may find, for example, a doctor is prescribing a medication the injured worker no longer takes or has never taken; so removing that drug from the future medical amount is an easy change.
8. What is the percentage of submissions to which CMS has countered with a higher dollar amount? A lower dollar amount? If there is a high percentage of either, you need to understand why there is a trend and how to counteract it.

You want the injured worker to have adequate funds for his lifetime needs related to the injury, but you don’t want to pay unnecessarily high costs. Often the projected expenses are way too high, or the therapy is not within evidence-based medical guidelines.

The best MSA developers can fully assess exposure before the proposal is submitted. They can spot inappropriate or unnecessary treatment and pharmaceuticals AND take steps to curb them such as physician peer-to-peer discussions, for example.

Conclusion

Paying too much for anything does not make sense. But, that’s exactly what happens far too often because many workers’ compensation payers don’t take advantage of advanced technologies in developing MSAs. Using metrics and data analytics and working with an MSA expert can help ensure injured workers get what they need and deserve without payers going overboard.

Author Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center .

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

No one likes to pay for items that are not their responsibility. This statement is true of the federal government in the workers’ compensation industry as the feds have exerted control over settlements involving injured workers who are or will soon be covered by Medicare.  An entire cottage industry has sprung up comprised of experts who develop Medicare Set-Asides (MSAs) and ensure Medicare’s interests are considered before a workers’ compensation settlement is finalized.

As the Medicare Set-Aside industry has grown and matured in workers’ compensation, a similar approach is now being considered with liability settlements. The law on the books for decades clearly says that Medicare is supposed to be a secondary payer in such settlements. Lately, there have been clear indications the Centers for Medicare and Medicaid Services (CMS) plans to take action on this soon. How it will ultimately shake out is up for debate. In the meantime, payers should at least be aware of what is happening and take steps to prepare.

The Issue

“The extent to which settling parties must consider Medicare’s interests in medicals in a liability settlement continues to be unclear.” Thus begins a new white paper discussing the issue and what can be done. Written and published by Tower MSA Partners, Navigating Through the Fog: Medicare, Future Medicals & Liability Settlements reviews the workers’ compensation experience with CMS, outlines likely scenarios for liability settlements, and provides tips for payers.

Liability insurance coverage protects the policyholder or self-insured entity against claims based on negligence, inappropriate action, or inaction that results in bodily injury or property damage.

Examples include

• Homeowners’ liability insurance
• Automobile liability insurance
• Product liability insurance
• Malpractice liability insurance
• Uninsured motorist liability insurance
• Underinsured motorist liability insurance

Medicare beneficiaries must notify Medicare when a liability claim is made against a party with liability insurance and the liability carrier must report to Medicare when it settles a claim with a Medicare beneficiary. When there is a settlement, Medicare expects reimbursement for any payments it covered that should have been paid out of the settlement.

The settlement becomes more complicated when there are future medical costs for the specific injury. If Medicare is billed, it may seek reimbursement. In those situations, Medicare’s interests should be taken into account, and a liability MSA may be advisable.

Medicare Has Not Yet Established Framework for Liability MSAs

Unlike the process for workers’ compensation MSAs, Medicare has not established a framework for reviewing LMSAs or provided any guidance on the issue. Instead, any CMS reviews for proposed LMSAs that do occur are done on a case-by-case basis and only by some regional offices.

The good news is that, so far at least, there are no known incidents of CMS denying payment or seeking reimbursement for injury-related medical care after a liability settlement. Tower MSA Partners anticipates action from CMS within the next two years. When that happens, according to the white paper, CMS will need to address issues including:

• Review thresholds
• Allocation of the MSA based upon a compromise formula
• Documentation required to submit to CMS with an LMSA proposal
• Whether the LMSA review will occur pre- or post-settlement
• Timeline for LMSA policy implementation
• Multiple defendants and mass tort settlements
• Pricing of medical in an LMSA (usual and customary vs. Medicare rates)

Other factors that come into play with liability settlements include policy limits, statutory tort caps, negligence rules, pre-existing conditions, case law and other issues that may result in a settlement for less than the full value of the claim.

What to Do

With things up in the air regarding liability settlements, one question is whether a claim for reimbursement could extend to the claimant and the primary plan, as well as the claimant’s attorney. Right now, it is uncertain.

Despite the vagueness of the issue, Towers suggests payers take the following actions to protect themselves and claimants.

1. Identify whether the claimant is a Medicare beneficiary or has a reasonable expectation of Medicare eligibility within 30 months.
2. If Medicare eligibility is or soon will come into play, evaluate the necessity of future injury-related medical care. Is future medical care claimed in the settlement demand or alleged in the pleadings?
3. If there is a necessity of future injury-related medical care, will this burden likely be shifted to Medicare? For example, does the claimant have a source other than Medicare to pay future injury-related medical care; e., group health plan, which will likely cover future injury-related medical?
4. If Medicare is the likely source of future injury-related medical care, consider whether there are sufficient settlement funds to allocate a portion to fully fund future medicals. If so, then consider an LMSA as part of the settlement. If there are insufficient funds to fully fund future medicals, then consider an apportionment of the future medical allocation in relation to other damages allocated in the settlement.
5. Document the file and settlement/release in regard to steps taken to consider Medicare’s interest:

– If an LMSA or other type of allocation for future medical has been included in the settlement, ensure the plaintiff is aware of his or her responsibilities in utilizing those funds for future medical expenses.

– If the LMSA has been apportioned, document the reasons why such a reduction was taken.

– If no LMSA or allocation for future medical has been included in the settlement, then ensure the plaintiff is aware of the potential implications for future payments by Medicare for injury-related medical care.

– Document why no such allocation has been included in the settlement/release.

6. Besides the future medical considerations, remember as well to investigate and resolve Medicare conditional payments, including payments made through Part C Medicare Advantage Plans.

Conclusion

Medicare may begin denying payment for claims if it determines that payment should have been made through a liability insurance policy or another primary payer. Such a change would likely delay liability settlements. Therefore, it is imperative to work with an experienced settlement planning professional, as failure to comply with MSP provisions can result in severe penalties.

Author Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center .

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Attention to detail cannot be overstressed when it comes to finalizing Medicare Set-Asides. The Centers for Medicare and Medicaid Services is very specific regarding what can and should be included to gain its approval. Beyond that, those setting up the MSA need an in-depth understanding of the rules to ensure the injured worker gets what he needs while keeping costs in check.

The CMS rules for MSAs are intricate and laced with nuances. Additionally, the agency often issues changes intended to ease the process. That means those tasked with creating the MSA must have a clear understanding of the latest iteration of the rules.

MSAs

An MSA is a portion of a total workers’ compensation settlement designed to cover expenses for all future medical expenses related to the workplace injury that would otherwise be reimbursable by Medicare. The goal is to identify as accurately as possible the total cost that will be incurred during the injured worker’s life.

CMS approval is not a legal requirement for an MSA. However, the potential financial repercussions for providing an inadequate MSA are such that many industry stakeholders find it wise to submit proposed MSAs to the agency.

Estimating the future medical costs takes enormous skill. For example, the final amount takes into account only the expenses related to the specific injury. Also, it needs to include things such as durable medical equipment that, while not needed presently, may be necessary in the future. Surgeries and other recommended medical treatments should also be included.

At the same time, the MSA should not include treatments or medications that are either not related to the injury or are not currently being used, or expected to be used by the injured worker. Unfortunately, when treatment recommendations are not clearly stated in the medical records, the concern that CMS may return a ‘counter higher’ response can lead many to overfund MSAs — especially, in the case of medications.

Case Study (Provided by Tower MSA Partners): $951,189 in Savings from MSA Optimization

CMS guidelines stipulate that medications listed as ‘active’ by the treating physician should be included in the MSA — even if the injured worker is not taking them.

Challenge

Pennsaid (Diclofenac Sodium) is a topical, nonsteroidal anti-inflammatory drug used to treat pain. The injured worker received a sample of the medication and a prescription of Pennsaid 1.5 percent for low back pain. However, the medication did not effectively manage the pain, so the injured worker never filled the prescription. The claims adjuster was unaware of the prescription since it had been provided as a sample dose followed by a paper prescription.

Total MSA Exposure — $970,355

Solution

Tower MSA’s physician follow-up team worked with the assigned nurse to make the treating physician aware that the injured worker was not filling the prescription. The doctor agreed to discontinue the medication and replace it with an oral version of Diclofenac. He also offered to prescribe Nabumetone, another nonsteroidal anti-inflammatory medication used to treat pain. However, the injured worker also did not fill that prescription.

A letter was sent by the physician to confirm discontinuation of the ‘active’ medication. It included the following language:

“I discontinued [the injured worker’s] Pennsaid 1.5%. He was offered Nabumetone, but the patient declined this medication.”

The pharmacy benefit manager blocked both medications to prevent the possibility of either being reintroduced. The letter from the physician was appended to the MSA, and both Pennsaid and Nabumetone were removed from the prescription drug portion of the allocation.

Results

In its review of the MSA, CMS accepted Tower’s physician letter as evidence of the discontinuation of both drugs and approved the MSA in full.

The removal of Pennsaid and Nabumetone drastically reduced the MSA allocation:

Conclusion

Injured workers should not have to worry about paying for future medical expenses related to their workplace injuries after they settle their workers’ compensation claims. At the same time, overpaying an MSA for unused and unnecessary services and medications serves no one’s best interests. It’s important to use experts to ensure the appropriate funding amount is allocated.

Author Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center .

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Stepped-Up Efforts to Seek Reimbursement From Settling Parties

Enrollment Information Shared Through Mandatory Insurer Reporting

Author Dan Anders, Chief Compliance Officer, Tower MSA Partners. Dan oversees the Medicare Secondary Payer (MSP) compliance program. In this position, he is responsible for ensuring the integrity and quality of the MSA program and other MSP compliance services and products. Based upon his more than a decade of experience in working with employers, insurers, TPAs, attorneys and claimants, Dan provides education and consultation to Tower MSA clients on all aspects of MSP compliance. Contact: (847) 946-2880 or daniel.anders@towermsa.com

Medicare Set-asides can take time, money and valuable resources in the claim settlement process. Partnering with experts makes both financial and logistical sense to get your claims settled that much faster, and for the lowest cost.

Taking a proactive approach and truly engaging with your MSP vendor will help limit the costs and time to create the best possible MSA.

Action Steps

Strengthening your relationship with your MSP provider requires you to become involved, rather than taking a back seat and expecting the vendor to do it all. Here are actions that will help:

1. Provide Complete Information

An accurate, defensible MSA report is dependent on the availability of all pertinent information and documentation. You don’t want to delay the process by having to revise the report because of missing information. While the MSA company may be able to access your claim system for relevant records, there may be older records and legal documents in a different system. At the time of referral the following information should be provided:

• Complete referral form
• Claim payment history
• Two years of medical records for each
• Accepted and denied body parts
• Multiple dates of injury settling
• Court orders and rulings
• Depositions

2. Read and Heed the Report

In addition to a projected dollar amount, the MSA report should include the basis for the number along with recommendations on ways to reduce the allocation and streamline the process. Failing to read through the report and follow the recommendations is wasting your money. For example, there may be suggestions to

• Clarify ongoing medication use
• Address open-ended treatment
• Implement an action plan to reduce high opioid or other medication use

The vendor may have services that can address these and other issues that will better ensure CMS approval. Also, the report may include unintentional oversights or a misinterpretation of the records. Since you know the details of the claim better, it makes sense to read through the report and question anything that you don’t understand.

3. Allow for Intervention

Missing medical reports, open-ended medication recommendations, and inconsistent physician statements are among the many hurdles that can increase the allocation or stall the approval process. The MSA vendor should provide an intervention plan to address any such issues that arise before the MSA report is completed and submitted to CMS. You should authorize the company to move forward with the plan and to meet with any attorneys involved if necessary.

4. Work with the Compliance Team

A couple of questions are best left to attorneys, such as whether an MSA is even necessary and, if so, how state statutes, regulations or case law may affect the preparation and submission of the MSA. MSP vendors typically work with attorneys who are experts in MSP compliance. They can show you various tactics to limit the allocation amount. To do so, you need to provide the vendor with information on accepted and denied body parts along with relevant court orders, rulings or depositions.

5. Agree to Escalation

A claims professional who neglects to respond to a recommendation from the vendor can create problems getting CMS approval. Conversely, the MSA vendor’s front-line personnel may not be giving you the information you need. Both you and the vendor should agree to have an escalation process in place. This will allow the vendor to bring the recommendation to a supervisor or manager, and lets you talk with a key contact at the vendor’s office to get a complete picture of any issues that must be addressed.

6. Task Vendor as Gatekeeper

If your organization has many legacy or other claims that have been open for a while, you may want to conduct a settlement initiative. This typically involves many parties; such as defense attorneys, structured settlement brokers, professional administrator and a medical case manager. Have the MSA vendor act as the gatekeeper for this, by coordinating MSA development, clinical intervention, and CMS submission. That frees up the claims handler and defense attorney to focus on settlement negotiations and finalization.

7. Include the Vendor in Finalization

The settlement terms must be consistent with CMS guidelines, including the proper inclusion of the MSA and defining Medicare conditional payment resolution. Also, CMS requires the MSA company to submit final, court-approved, settlement documents to make the approved MSA effective. Your defense attorney should, therefore, work with the MSP compliance team to avoid any problems later.

8. Monitor Performance Metrics

You want to make sure your partnership with the MSA vendor continues to be successful and correct any areas that need improvement. The vendor should be able to provide performance metrics, such as

• The number of MSA referrals
• The turnaround time to write the MSA report
• The CMS approval rate
• Percentage of MSAs with prescription medications
• Cost savings as a result of interventions
• Percentage of MSAs with Development Letters from CMS

Conclusion

MSAs are complicated and can be expensive and time-consuming. Partnering with the right experts and staying involved with them can get you to a less costly settlement sooner.

Author Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center .

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Complying with the ever-changing rules and regulations covering Medicare Secondary Payer issues is challenging enough, but adding in the complex conditional payment resolution and recovery process could push a workers’ compensation payer off the deep end.

Unless you strictly follow all the requirements of this system, you risk a referral for collections to the U.S. Department of Treasury. Knowing when to call in an expert is a good bet to keep you out of the government’s crosshairs.

Conditional Payments

Medicare does not pay for medical services or treatments which it believes are the responsibility of another entity, such as workers’ compensation. In those cases, Medicare is the secondary payer involved.

A conditional payment occurs when there is evidence that the other entity, workers’ compensation, has not promptly paid the bill. Medicare will then make the payment on the condition it will be reimbursed once the other entity does pay.

The responsibility for collecting the reimbursement rests with either of two entities; the Benefits Coordination & Recovery Center (BCRC) or the Commercial Repayment Center (CRC), which issues a demand for the repayment. If the debt is not paid or appealed to Medicare within 180 days, it is referred to the Treasury Department for collection.

Collecting the Debt

The Treasury Department has a number of methods to collect on debts owed to the federal government. For example, there are

• Demand Letters
• Telephone calls to the debtor
• Administrative wage garnishment
• Credit bureau reporting
• Private Collection Agencies (PCAs)

One other avenue is the Treasury Offset Program or TOP. This program allows the Treasury Department to offset a federal payment to the debtor and use the offset to pay the debt.

For example, if the debtor is owed a tax refund, the money it will be taken from the refund.  Or, if the debtor is receiving a grant or rent money from the federal government, it will be taken out of this payment.

This system can create major headaches for carriers or a self-insured employers’ accounting departments, as less money than expected is received from the federal government. The result is the claims department, or risk manager gets called in to explain why the federal government is deducting these amounts as a result of a workers’ compensation claim and why the matter was not handled timely to avoid this issue.

Case study (provided by Towers MSA Partners); Resolving a Conditional Payment Dispute

Challenge

In this particular case, a self-insured real estate investor leases property to various entities, one of which is the federal government for a U.S. postal office. An employee of the real estate investor — unrelated to the U.S. post office — had suffered a work injury which was resolved and approved by a worker’s compensation judge. A few years post-settlement, Medicare issued a Conditional Payment Notice and demanded reimbursement of its lien for $14,026.00. The matter was referred to the Department of Treasury for collection, which applied the TOP and withheld federal funds owed for the rent for the postal office space.

Total MSA exposure = $14,026.00

Solution

After reviewing the details of the claim and the demand for reimbursement by Medicare, Tower’s legal team determined an appeal of the entire conditional payment amount was justified because the charges were unrelated to the work injury. The matter moved from the Department of Treasury back to the CRC, which concurred with the appeal that the charges were not related to the work injury, and therefore, not the responsibility of the employer.

Results

CRC agreed with the rationale and determined the payments were appropriately paid by Medicare. Also, the funds previously held by the Department of Treasury have been returned to the employer.

Total Savings = $13,885.64

Conclusion

Complying with Medicare requires continuous attention to the program. While the government has made some changes over the years to simplify the process, you must still engage Medicare in this process

Conditional payments can be tricky as there are specific deadlines and failure to meet them creates problems for workers’ compensation payers, as seen here, with Treasury Department collection actions. Medicare will generally remove unrelated charges from its demands, but it requires payer action to have the charges removed.  So, it is especially important to verify that all conditional payments are related to the claim before settlement.

Author Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center .

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

On Thursday, January 18, 2018, the Centers for Medicare and Medicaid Services (CMS) held a webinar to introduce the new Commercial Repayment Center (CRC) contractor, Performant Recovery, and Performant’s management team. This transition to a new contractor is important to insurers and employers as the CRC is responsible for recovery of Medicare conditional payments against these entities stemming from liability, workers’ compensation and no-fault claims where ongoing responsibility for medicals has been accepted.

Ted Doyle, the Performant MSP CRC Project Director, emphasized in his introductory remarks and throughout the presentation that their main goal is to make the transition seamless for all those who engage with the CRC. His message to stakeholders is CMS’s recovery processes and timeframes remain the same, it is only the entity handling those processes that is changing.

Besides Mr. Doyle, other webinar participants were John Albert, the Director of the CMS Division of Medicare Benefit Coordination and Laura Martinez, the MSP CRC NGHP Recovery Manager for Performant.

Key contractor transition information provided during the webinar was as follows:

• The current CRC contractor, CGI Federal, will cease operations effective Friday, February 9, 2018.
• Performant Recovery will commence CRC operations effective Monday, February 12, 2018.
• Transition cutover, or what CMS calls “Dark Days,” will occur on February 8 and 9. During this period while CGI Federal will continue to answer telephone calls and the Medicare Secondary Payer Recovery Portal (MSPRP) will be available, the information will be limited to what was available at close of business on February 7. Also, uploading documents through the MSPRP will not be available.
• Performant will go live as of 8am EST on February 12 at which point the MSPRP will once again be fully available as well as the call center. Correspondence received during the Dark Days or prior to the transition will be transferred to Performant for handling.

In regard to what will remain the same post-transition:

• All current cases initiated by CGI will be transitioned to Performant.
• Case information, copies of communication, correspondence and contact information, including letters of authority, will be fully accessible to Performant such that there should be no reason for stakeholders to resend correspondence or other information that was previously provided to CGI.
• There will be no changes to CMS established recovery processes or timeframes applicable to MSP recovery.
• The CRC Call Center will continue the same hours: 8am – 8pm EST
• The CRC Call Center phone number will remain the same: (855) 798-2627
• All Benefits Coordination and Recovery Center (BCRC) processes remain the same, including Section 111 Mandatory Insurer Reporting.

As for what is changing post-transition:

• Effective 2/12/2018* the CRC has a new address:Medicare Commercial Repayment Center – NGHP ORM
  P.O. Box 269003
  Oklahoma City, OK 73216*Any correspondence received prior to 2/12/2018 will be held and then processed starting on that date.
• Effective 2/12/2018 the CRC fax number is (844) 315-7627.

As with any transition, some bumps are to be expected. We are hopeful these will be short-term and that the transition will not only be seamless, but that Performant improves the customer service aspect of the Medicare conditional payment recovery process. CMS and Performant engaging with Tower MSA and other stakeholders through this webinar is a good first step at building a collaborative relationship with those impacted by the CRC’s recovery efforts.

It was indicated a copy of the presentation slides will be made available on the downloads section of the CMS Coordination of Benefits and Recovery website next week.

Author Dan Anders, Chief Compliance Officer, Tower MSA Partners. Dan oversees the Medicare Secondary Payer (MSP) compliance program. In this position, he is responsible for ensuring the integrity and quality of the MSA program and other MSP compliance services and products. Based upon his more than a decade of experience in working with employers, insurers, TPAs, attorneys and claimants, Dan provides education and consultation to Tower MSA clients on all aspects of MSP compliance. Contact: (847) 946-2880 or daniel.anders@towermsa.com