By Jon Gunter & Barbara Fairchild, Co-CEOs, IMPAXX
Last week we explored four key lessons learned in Medicare Secondary Payer (MSP) compliance in 2022. From the potential for Civil Monetary Penalties and the responsible use of artificial intelligence to managing funds and reducing settlement costs. This week we will delve into issues, both new and old, that played a significant role in 2022.
Lesson Five: Confusion Clouds the Issue
The year started off with a bang in January with the addition of Section 4.3 to Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide version 3.5. The Centers for Medicare and Medicaid Services (CMS) sought to clarify its position on the “Use of Non-CMS Approved Products to Address Future Medical Care.” But the language used in the Guide was confusing to many, especially given the fact that it was not consistent with previous statements by CMS or the MSP statute and accompanying code of federal regulations.
Many are not aware that CMS updated Section 4.3’s language only two months later with the release of WCMSA Reference Guide version 3.6 in March. The importance of the updated language cannot be overstated. CMS made clear in March 2022, that it “may” deny medical benefits only if the claimant mismanages his or her MSA funds and/or if the MSA is not reasonable. This language is very different from the language CMS used in January indicating that it “will” deny payment for medical services if a non-submit is utilized by the parties. In addition, CMS representatives noted during their town hall meeting on February 17 that this language did not represent “new” policy for CMS.
Although to a lesser extent, confusion remains prevalent around this issue. Many industry publications and blogs stay focused on the January edition of the reference guide and either fail to discuss or downplay the amended version from March. The differences between the two are significant, and it pays to understand the distinction. Compliance with the MPS statute is key, and there remains a variety of ways to comply with the law.
Lesson Six: Medicaid Recoveries Are Real
Medicaid is a state managed program with eligibility based on income requirements. Beneficiaries typically do not need to reimburse Medicaid for payments made for medical treatment. An exception occurs, however, when a third party is liable for a beneficiary’s injury and subsequent treatment. In that instance, a state may assert a lien for the portion of a settlement that represents payment for medical care. But the state is barred from asserting liens on other amounts in the settlement, such as awards for pain and suffering, lost wages, etc. In 2022, the Supreme Court of the United States in Gallardo v. Marstiller1, determined that the State of Florida could assert a lien on settlement amounts representing past medical care AND future medical care, as indicated by the Florida Medicaid Third Part Liability Act.
Under the prior standard from Arkansas Dept. of Health and Human Servs. v. Ahlborn2, states could not assert a lien on amounts for future medical care. Whether lien recovery will be affected by the decision in Gallardo depends on each state’s third-party liability recovery laws. Based on Gallardo, Medicaid liens are likely to increase in amount and be less defined during the settlement process. As such, it is important to ensure that any Medicaid lien issues are resolved and addressed as soon as possible to prevent settlement delays and future exposure.
Lesson Seven: Medicare Advantage Plans Are Part of Your Life Now
Medicare Advantage Organizations have always asserted that they could recover conditional liens in addition to double damages for non-payment by primary payers, and courts around the nation have agreed with them. However, uncovering whether a Medicare beneficiary was enrolled in a Medicare Advantage Plan has been a difficult task for settling parties. The Provide Accurate Information Directly (PAID) Act, which became effective in December 2021, has made this data more accessible.
The PAID Act requires CMS to provide Responsible Reporting Entities (RREs) with a beneficiary’s Medicare Advantage Plan (Part C) and Medicare Prescription Drug Plan (Part D) enrollment information for the past three years (up to twelve instances) as part of the query response process for Section 111 Reporting.
In 2022 we saw the first full year of PAID Act data. We also saw efforts by certain Medicare Advantage Plans to use Section 111 data to establish that primary payers were aware of potential lien obligations.
However, while the PAID Act imposed requirements on CMS, not all RREs (or their agents) obtained the proper software necessary to receive the enrollment data.
The events of the past year have made it clear that updating Section 111 platforms and software to obtain plan information through the query process and establishing a program to use this information and investigate and resolve liens, is key to preventing liability in the future.
Lesson Eight: Pros and Cons of an MSP Program vs. an MSP Panel
From conditional lien investigation and resolution, future medical allocations, and Medicare Set-Asides to Section 111 and post-settlement administration, there are different Medicare compliance elements involved in each case. Insurers, self-insured employers, and third-party administrators often use a variety of vendors to perform these services for many reasons, some of which may include having options to choose from, obtaining competitive pricing, and using multiple vendors because some vendors cannot provide services for all aspects of Medicare compliance.
However, there is potential risk in this approach as well. When using a panel of vendors, providers may use different approaches for allocations, reporting, conditional lien disputes, and post-settlement solutions, which can lead to confusion, and more importantly, to inconsistencies that can negatively impact the settlement process.
Creating an MSP program with a single vendor can offer benefits like streamlined processes and time savings and, in some cases, be less risky, especially when it comes to consistency in approach. Having a dedicated partner allows you to customize your program and receive training and implementation support from one source. A comprehensive MSP program can also help confirm that all areas of Medicare compliance are addressed without case elements slipping through the cracks.
Every year in the Medicare Secondary Payer Compliance world brings new challenges, insights, and opportunities. The safest way to navigate MSP compliance is to be educated, and stay informed of key changes, while having a deep enough understanding of requirements to identify messaging from the marketplace that is inconsistent with the statutes and your obligations. After all, building strong MSP programs requires not just reaction but reflection about what changes should be made, if any, and what to avoid going forward. There will inevitably be more lessons to learn in 2023.
About Jon Gunter
Jon has over 30 years of experience in the insurance industry including 10 years with a national property/casualty carrier where he functioned as an SIU specialist, Claims Manager, and Corporate Trainer before moving on to a national third-party administrator where he managed a team responsible for the WC claims oversight of one of the largest hotel chains in the country. He transitioned to the Medicare compliance space in 2004 and has focused on providing innovative MSP solutions for over 19 years.
Jon has written and contributed to articles on Medicare Secondary Payer related matters, is a former instructor with the California Insurance Education Association (IEA), is a Certified Medicare Secondary Payer Professional (CMSP) and is a member of The National Medicare Secondary Payer Network (MSPN). In addition, Jon frequently presents at both national and regional industry conferences and events. He is a graduate of California State University, Fullerton, and holds a Bachelor of Arts in Business Administration.
About Barbara Fairchild
Barbara brings 35 years of experience and proven performance in the insurance industry, specializing in catastrophic case management, drug and medical utilization review, and critical-care nursing. She transitioned into Medicare Secondary Compliance in 2003 providing extensive business development and significant growth nationwide.
As an instructor, Barbara has taught multiple courses and participated in conference presentations and webinars across the United States. She is also a member of The National Medicare Secondary Payer Network (MSPN), the Medicare Advocacy Recovery Coalition (MARC), and a commissioner for the International Commission on Health Care Certification CLCP board. Barbara holds a Bachelor of Science degree in Nursing from St. Louis University, graduating with honors. Additional professional credentials include Registered Nurse, Certified Life Care Planner, and Medicare Set-Aside Consultant – Certified.
From Section 111 Reporting, Medicare-Set Asides, Cost Projections, and Structured Settlements to MSA Administration, AI Solutions, Lien Resolution, and Settlement Consulting, IMPAXX offers a comprehensive suite of innovative products and services to help you effectively navigate the constantly changing Medicare Secondary Payer (MSP) landscape. IMPAXX is one of the nation’s largest Medicare Set-Aside solution providers, and our dedicated and knowledgeable team of professionals use their decades of experience, extensive industry knowledge, and sophisticated understanding of Medicare Secondary Payer requirements, to create customized options to meet your unique needs.
1 Supreme Court of the United States in Gallardo v. Marstiller, June 6, 2022 Decision (PDF)
2Supreme Court of the United States in Arkansas Dept. of Health and Human Servs. v. Ahlborn, May 1, 2006 Decision
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