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

In a recent post on its website, the Centers for Medicare and Medicaid Services (CMS) acknowledged the opioid crisis in this country, but provided little clarity as to how it intends to address this crisis in its review and approval of Workers’ Compensation Medicare Set-Asides (WCMSAs).

The 12/14/2017 statement provides as follows:

CMS understands the concerns regarding the opioid crisis occurring in the United States. We are committed to ensuring the determination of Workers’ Compensation Medicare Set Aside Arrangement (WCMSA) amounts are an adequate projection of claimant’s needs for future medical services and prescription drugs. CMS continually evaluates all policies and procedures related to WCMSA amounts. Any changes that Medicare pursues related to this issue will be reflected in our WCMSA amount review process.

More information on the WCMSA process can be found in the WCMSA Reference Guide.

We assume the above statement may be, in part, related to the California Workers Compensation Institute (CWCI) study finding nearly 70% of CMS approved MSAs require funding of opioids over an injured worker’s life expectancy (See our article, Opioids in the MSA . . . Challenges and Strategies, where this study is discussed). While we credit CMS’s Office of Financial Management (the CMS department which oversees the WCMSA review program and contractor) with recognizing the opioid crisis, what is left uncertain is what specific actions CMS is to take to address this problem in WCMSAs. Instead, CMS provides a vague statement indicating any changes related to the opioid issue will be reflected in its WCMSA review process and then cites its WCMSA Reference Guide.

CMS does not cite to a particular section of the guide, but we assume the following would be the most pertinent:

Drug Weaning/Tapering

Drug weaning commonly occurs with pain medications, such as opioids, especially when claimants’ work injuries improve. The WCRC takes all evidence of drug weaning into account, although in most circumstances the WCRC cannot assume that the weaning process will be successful. Usually, the latest weaned dosage is extrapolated for the life expectancy, but again, they assess all records when making these types of determinations. Where a treating physician believes tapering is possible and in the best interests of the claimant, CMS will consider all evidence in making a WCMSA determination, including medical evidence of current actual tapering.

Based upon the Tower MSA CMS Reconciliation Module, which reviews all MSA determinations for the purpose of identifying trends in CMS WCMSA allocation practices, CMS consistently disregards any active weaning or tapering process or scheduled reduction to future medication use and instead takes the latest dosage found in the medical records and/or prescription history and extrapolates it over the claimant’s life expectancy.

The question then is whether this December 2017 statement signals a departure by CMS from these past practices to a policy which will now give more weight to a weaning or tapering schedule from the treating physician which translates into limitations on the allocation of opioids in the WCMSA. We will take a wait and see approach in this regard.

It should be understood though that even were CMS to limit the allocation of opioids in the WCMSA, this in no way prevents the claimant from using the WCMSA funds for filling opioid prescriptions in excess of what is allocated. The reason being is CMS rules for administering a WCMSA allow for the funds in the account to be used for any Medicare-covered injury-related treatment or medication. As such, with a valid prescription, there is nothing to stop a claimant from converting funds allocated to a surgery to pay for medications, including opioids. It will remain then in the hands of the claimant’s medical provider to wean the claimant off opioids and other medications not intended for long-term use.

Practical Implications

As always, we will monitor CMS WCMSA determinations for signs of any changes to their allocating practices for prescription medications, especially in regard to opioids. However, we have to assume that until we see any changes, CMS will continue to follow its policy of taking the most recent medication dosage and frequency and pricing it out over the claimant’s life expectancy.

What this means then is opioid misuse must be addressed prior to submission of a WCMSA to CMS with any actual elimination of opioids documented in the medical records prior to submission of the MSA. Tower MSA is committed to working with our clients on reduction and elimination of opioids prior to CMS submission. Our Pre-MSA triage service is uniquely designed to identify such MSA cost-drivers and recommend intervention strategies, including escalating the matter to our Internal Pharm. D. for direct contact with the treating physician. Resulting reductions in opioid use limit MSA costs to the employer and provide for a healthier injured worker over his or her lifetime.

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

The workers’ compensation industry’s efforts to reduce unnecessary opioid use doesn’t seem to have caught on with all sectors yet. A new report shows that in California, federal government approvals of funds for opioids in Medicare Set-Aside (MSA) agreements greatly exceed the recommended levels in evidence-based medical guidelines.

It’s a sobering report that experts say places the affected injured workers at increased risk of opioid-related dependence and addiction. The authors suggest public policy changes are needed to the government’s approval process for the MSAs. In the meantime, there are actions payers can take to rein in the costs — and risks — of overuse of these medications and still obtain government approval.

Opioids and MSAs

An MSA is a financial agreement in which injured workers who are or soon will be covered by Medicare are given funds to settle their workers’ compensation claims. Included are allotments to cover estimated future medical expenses.

MSAs are not required to be submitted for approval by Medicare; however, they offer claims administrators a degree of protection against future liability if the funds run out too soon and Medicare becomes the primary payer. Having an approved MSA means the government is less likely to seek repayment.

The California Workers Compensation Institute analyzed nearly 8,000 California MSAs that had been approved by Medicare in 2015 and 2016.  They focused on dollars earmarked for opioids and found “that nearly 70 percent of federally mandated and approved California workers’ compensation MSA settlements for injured workers require funding for decades of opioid use, often at dangerously high levels and in conjunction with other high-risk drugs. Such a requirement exceeds federal and state clinical guidelines and places patients at high levels of risk.”

For comparison, the authors looked at stats from a case-matched control group of 71,771 closed workers’ compensation permanent disability (PD) claims with the same types of injuries.

Here’s what they found:

• 69.4 percent of the MSAs included allocations for opioids, compared to 59.1 percent of the PD claims.
• 27.7 percent of the approved medications in the MSAs were for opioids.
• The average amount set aside for opioids in the MSAs was $33,113, or 32.7 percent of the total prescription drug allocation.
• The average daily morphine equivalent dose (MED) was 54.7, and more than 10 percent of the MSAs with opioids had an estimated MED level of more than 90 per day. Medical guidelines, including the official California Workers’ Compensation Medical Treatment Utilization Guidelines (MTUG), the standard of care for the state’s injured workers, recommend no more than 50 MEDs without concerted efforts to wean the patient to lower levels.
• In terms of opioid strength, the cumulative morphine milligram equivalents (MMEs) in the MSAs was 45 times the cumulative MMEs in the PD claims; and opioid levels for the top 5 injury categories in the MSAs ranged from 33 to 78 times those of the PD claims.
• The time period allotted for opioid use averaged 20.9 years.

“A more coordinated effort and better balance are needed between workers’ compensation programs and workers’ compensation MSAs in order to assure the long-term health and safety of injured workers as they progress through both systems,” the authors wrote.

Another Way

The exorbitant allotments for opioids in approved MSAs may be the average in California currently, but they don’t need to be the norm. There are a variety of strategies payers can use — even before they get to the settlement phase of a claim.

• Physician peer review. A physician reviews the injured worker’s medical history and treatment and may uncover an opportunity to provide the same or better care using fewer, less strong and/or shorter time spans for opioids. A treating physician is likely more comfortable speaking with a peer who has looked into the records.
• Early intervention. Payers can take a proactive approach to prevent injured workers from overuse of opioids by flagging at-risk claims and intervening.
• Pharmacy benefit managers (PBMs). PBMs study data, medical records, lab results, etc., and manage patient care. They can also provide counsel and education to stakeholders involved in a claim, such as an adjuster, physicians, and nurse case managers.
• Integrated approach. Discussions in which stakeholders review metrics can help keep claims on track. Third-party administrators, PBMs, MSA companies and others should be included.
• Managing expectations. Injured workers in chronic pain, which comprises the bulk of those agreeing to settle their claims, often seek a cure to be pain-free. By educating them and their physicians these patients can understand that the pain can’t be eliminated but it can be managed.

Case Study (Provided by Tower MSA Partners) 61.4% Savings

As part of its business model, Tower uses a Triage service to identify challenging issues before an MSA is developed and provides recommendations to address them. The company’s clinical experts analyze the injured worker’s medical issues; they examine the recommended treatment plan to ensure it adheres to evidence-based medicine, and evaluate the need for the future medical care. An internal pharmacist contacts the treating physician to discuss the claim and make recommendations. Once that is completed, the company finalizes and sends the MSA for approval.

The goal is to limit pharmacy to medications appropriate for the long term and reduce the duration and strength of opioids where possible when the drugs are included in MSAs.

Using this integrated approach has led to the following results:

• 7 percent of MSAs approved by the government include $0.0 for pharmaceuticals.
• 6 percent of approved MSAs include opioids.
• 4 percent MSA savings.

Conclusion

The opioid epidemic has been declared a public health emergency by the administration. The workers’ compensation industry has made tremendous strides in the effort to prevent opioid-related problems and wean injured workers off the drugs. The approaches that have been shown to be successful should be also be utilized when MSAs are involved.

Author Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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/

©2017 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.

Benjamin Franklin must have been contemplating Medicare Advantage Plan reimbursement when he uttered one of his famous lines: “If you fail to plan, you are planning to fail.” Over the past few years Medicare Advantage plans have increasingly been seeking reimbursement for payments made stemming from workers’ compensation, liability and no-fault claims, otherwise known in Medicare circles as Non-Group Health Plans (NGHPs). Despite these increasing efforts, many NGHPs have not planned how they should respond to such reimbursement claims.

With the goal of working with our clients to educate and assist with proper planning, earlier this month, Tower MSA was privileged to have Brian Bargender, Subrogation & Other Payer Liability Business Consultant for Humana, participate in a webinar to discuss reimbursement rights of Medicare Advantage plans, and best practices for investigating and responding to reimbursement claims. For those who were unable to attend, or would like a refresher, we are pleased to provide below a summary of Mr. Bargender’s presentation along with some final thoughts and takeaways.

Medicare Advantage Plan Background

Part C Medicare Advantage plans (MA plans) are alternative delivery mechanisms for traditional Medicare benefits (Parts A and B) provided by private companies under contract with CMS. Medicare beneficiaries have the option of choosing one of these Medicare Advantage plans during annual or special enrollments periods. The three largest MA plan sponsors (representing almost half of the available plans) are UnitedHealthcare, Humana and Aetna. As of 2017, one-third of Medicare beneficiaries are enrolled in MA plans.

Medicare Advantage Plan Recovery Rights

Pursuant to CMS direction, MA plans must enforce the Medicare Secondary Payer Act (MSP) and will be audited by CMS for compliance with the Act. Consequently, these plans are obligated to coordinate benefits such that MA Plan coverage is denied when a primary payer is covering treatment and when the MA plan pays, but later learns of primary payer responsibility, seek reimbursement for payments made relating to the particular workers’ compensation, liability or no-fault claim.

MA plans right to reimbursement, including double damages, from NGHPs under the MSP Act has been acknowledged in at least two significant federal appellate court decisions:

• In re: Avandia, 685 F.3d 353 (3d Cir. 2012)
• Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 832 F.3d 1229 (11th Cir. 2016)

Medicare Advantage Plan MSP Enforcement Challenges

Despite CMS’s direction to MA plans regarding enforcement of the MSP Act, including coordination of benefits, the data available to the MA plans to perform this task is inconsistent and error prone. Consequently, MA plans have taken one of three approaches to MSP enforcement:

Inactive: Minimal effort
Reactive: Relying upon member and medical provider reporting of primary plans
Proactive: Claim screening and investigation

As Mr. Bargender explained, Humana is taking the proactive approach. Nonetheless, the challenges faced by Humana in identifying coordination of benefits situations has proven difficult as a result of gaps in medical provider and Medicare beneficiary self-reporting and data provided by CMS which is “too little, too late, often wrong.” Additional challenges faced by MA plans are incomplete direction from CMS and non-cooperation of Medicare beneficiaries and plaintiff attorneys to MA plan reimbursement claims. As such, Humana utilizes a multi-faceted approach of member questionnaires, public records, such as accident reports and workers’ compensation claims, and non-public records, such as data relayed by CMS, to determine possible MSP coordination of benefits and reimbursement opportunities.

Best Practices for Non-Group Health Plans and MA Plan Reimbursement

Humana’s proactive approach then has the ultimate goal of reimbursement for charges related to the claimed injury. Mr. Bargender shared the following basic precautions to be taken by NGHPs:

• Train front-line staff on MSP basics – including MA & Part D
• Assume older & disabled claimants have some form of Medicare
• Be proactive when told claimants don’t have original Medicare
• Watch for other payer info in medical records
• Watch for notices from other payers
• No-fault and accepted work-comp claims
• Pay treating providers directly for outstanding medical bills
• Be suspicious of billing gaps (other payer?)

And when it comes to Liability and disputed or denied workers’ compensation claims:

Find out who paid for medicals

• Providers rarely wait for settlements
• CMS “no payment” letters aren’t the last word
• Request benefit ID card(s)
• Ask to see other payer “no payment” letters
• Medicare/Medicaid dual beneficiaries? …assume Part D paid Rx

Address MSP repayment before agreeing to settlement

• Determine amount before settlement is finalized
• Don’t assume plaintiff will reimburse MA plan or unpaid providers
• What does settlement indemnification language actually accomplish?

In terms of negotiating and resolving MA plan claims for reimbursement, Mr. Bargender offered as follows:

Most MA plans are open to working with primary payers.

Focus on these:

• Rationale for denying beneficiary’s underlying claim, not MA/Part D rights
• Limits exhausted, treatment not allowed/capped, etc.
• What’s related (was it in the demand or release?)
• Errors in plan’s payment ledger
• Extenuating circumstances

Not on these:

• Reasonableness of amounts paid by MA
• Claim filing time limits vs. MSP statute of limitations
• Contract language” in the MA Evidence of Coverage document

Final Thoughts and Takeaways

In working with Mr. Bargender and the subrogation team at Humana, we have found them very helpful in promptly identifying specific reimbursement claim information where the claimant was enrolled in a Humana Medicare Advantage plan. Further, they are open to understanding the particular liability issues and bases for settlement, something not typically found with the Medicare conditional payment recovery contractors.

The primary takeaway from Mr. Bargender’s presentation is NGHPs must be proactive in identifying whether a Medicare eligible claimant is enrolled in a MA plan, and, if so, investigate whether the plan is seeking reimbursement for payments made related to the claim. As there exists no central database accessible to NGHPs in which to identify the MA plan a claimant is enrolled, the claims handler must be proactive in inquiring of the claimant whether they are enrolled in such a plan.

Tower MSA Partners will work with our clients to assist in identifying whether a claimant may be enrolled in a MA plan, identify the name of the plan and investigate whether such plan is seeking reimbursement stemming from the claim. We stand ready to assist you through general consultation on ensuring your MSP compliance program appropriately addresses MA plans or consultation on MA plan recovery* in a specific claim.

*While we did not delve into Part D Prescription Drug plans in this article, such plans arguably have similar reimbursement rights as Part C Medicare Advantage plans. NGHPs should also be aware of the potential for reimbursement claims from these plans.

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

It’s been characterized as “almost unintelligible to the uninitiated,”  and it’s about to further complicate things in the workers’ compensation system. As of October 1, state Medicaid programs are allowed to assert a full recovery against all amounts paid to a claimant.

We can most likely expect states to ramp up their reimbursement efforts for affected workers’ compensation claims. It means if you haven’t paid much attention to Medicaid’s secondary payer recovery rights, it’s time to start.

Medicaid

Similar to Medicare, Medicaid provides healthcare to certain Americans. But unlike Medicare, Medicaid involves both the federal and state governments — think workers’ compensation with some federal oversight.

Here are some of the specifics of Medicaid:

• Expansion. It was created by Congress to provide healthcare to the disabled and those living in poverty, but was expanded under the Patient Protection and Affordable Care Act. Just about anyone under 65 who has a household income under 133 percent of the federal poverty level is now eligible.
• Quasi-federal/state program. States administer eligibility and claims processing functions, while the federal Centers for Medicare & Medicaid Services (CMS) oversees state compliance with federal Medicaid rules.
• Voluntary. The voluntary program allows states to determine how to address the needs of their own populations; but they must adhere to rules established by CMS in order to receive some federal funding for the program.
• Needs based. Unlike Medicare, which is an entitlement program generally available to anyone over 65 and/or disabled, Medicaid is based on a person’s income level.

Secondary payer

Like Medicare, Medicaid is designed to be the payer of last resort and its interests are supposed to be considered in settlements. However, court decisions over the years have limited reimbursement to only the amount designated for medical care, something not typically identified in workers’ compensation claims. That’s made it more difficult for states to go after settlement money. Until now.

The October 1 change allows Medicaid programs to go after the entire settlement of program beneficiaries. Just as Medicare has the right to recover conditional payments made from settlement amounts, Medicaid will likewise impact claims resolution. In fact, one of the federal government’s Medicaid requirements has been for states to seek reimbursement from third party sources. The October 1 change simplified that process — at least, for Medicaid agencies.

Workers’ Compensation

Because Medicaid programs are administered by states, every jurisdiction has a different set of laws and regulations — similar to workers’ compensation; and Medicaid recovery rules also vary from state to state. That fact complicates the situation for employers that operate in multiple states, as they try to determine Medicaid’s rights of recovery.

What the change will mean for workers’ compensation is something of a mystery at this point, at least in terms of the specific steps to consider Medicaid’s interests in settlements. Many questions need to be answered, such as reporting requirements, compliance and repayment.

One issue that further complicates things is the fact that recovery for Medicare and Medicaid are not mutually exclusive; each must be considered at settlement. Estimates are that roughly 20 percent of Medicare beneficiaries also collect benefits from Medicaid programs.

In anticipation of the rule change, states began the process of implementing strategies to identify Medicaid beneficiaries who receive workers’ compensation. Many state Medicaid agencies have implemented reporting requirements through data exchange programs and registries.

Rhode Island, for example, established the Medical Assistance Intercept System and requires all insurers operating in the state to participate. The program electronically matches Medicaid recipients with liability and workers’ compensation insurance claims. It is designed to intercept payments of $500 or more for reimbursement to the state’s Medicaid program.

What to Do

1. Proactively monitor developments. Watch for CMS guidance, for example to understand how best to comply with reporting requirements and compliance.
2. Understand state laws. It’s important to stay abreast of Medicaid recovery statutes and case law in each jurisdiction in which you do business, since each one has a unique system.
3. Identify Medicaid beneficiaries and those who will be, among your claimants, and report them to your state’s Medicaid agency.
4. Don’t forget Medicare. The rule change for Medicaid has no bearing on Medicare, so procedures for considering its interests should remain the same.
5. Carefully read any correspondence you receive from CMS and/or state Medicaid agencies.
6. Adopt best practices. Work with your attorney(s), carrier and claims managers to develop a plan to consider Medicaid’s interests in claims.

Conclusion

Medicaid has always been a payer of last resort when other sources of funding are involved. The change in language as of October 1 will likely lead states to become more aggressive in seeking recovery in claims involving Medicaid beneficiaries. It’s important to stay up to date on the very latest developments to ensure you are in full compliance.

Author Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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/

©2017 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.