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Medicare: Primary Payer Compliance

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Overview of Medicare compliance considerations for liability insurance, no-fault and workers\' compensation

Overview of Medicare compliance considerations for liability insurance, no-fault and workers\' compensation


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  • 1. MEDICARE: PRIMARY PAYER COMPLIANCE Prepared By: Carrie T. Taylor, J.D.
  • 2. Medicare Entitlement
    • Medicare is a health insurance program for:
      • People 65 or older;
      • People under 65 with certain disabilities; and
      • People of all ages with end-stage renal disease (permanent kidney failure requiring dialysis or kidney transplant)
  • 3. Medicare
    • Part A: Hospital Insurance
    • Part B: Medical Insurance
    • Part C: Advantage Plan Coverage (like HMOs and PPOs)
    • Part D: Drug Coverage
    • Exclusions: Coverage and payment rules to determine whether an item or service is covered
  • 4. Medicare Secondary Payer (MSP) Statute
    • Allows the Centers for Medicare & Medicaid Services (CMS) to pursue damages against any entity that attempts to shift the burden of medical costs to Medicare.
    • CMS has the right to seek reimbursement of medical expenses paid by Medicare that an insurance carrier or self-insured should have paid.
    • The MSP statute provides for a private cause of action for double damages for failure to provide primary payment or appropriate reimbursement.
  • 5. Who is a primary payer?
    • Liability insurance
    • No-fault insurance
    • Workers’ compensation
  • 6. Compliance
    • Medicare Set Aside (MSA)
      • Future consideration
    • Conditional Payment Reimbursement
      • Past Consideration
    • Notice/Reporting
      • Section 111 MMSEA
  • 7. Future Consideration I. Medicare Set Aside
  • 8. I. Medicare Set Aside (MSA)
    • Workers’ Compensation Medicare Set-Aside (WCMSA)
      • A Fund of money set-aside at the time of settlement that must be exhausted before a claimant can use Medicare to pay for injury related treatment.
      • CMS publicized the WCMSA as a compliance tool through a series of policy memoranda beginning in 2001.
      • An MSA is designed to protect Medicare’s future interests.
  • 9. Is an MSA necessary when settling a non-WC claim?
    • No, but Medicare’s interests must be considered and protected if the settlement involves waiver of future medical expenses
      • Some Regional Offices will approve/review MSAs for liability settlements depending upon workload factors
      • Medicare Set Aside Allocations may be a helpful tool with significant settlements (perhaps $1 million or higher)
  • 10. Past Consideration II. Conditional Payment Reimbursement
  • 11. MEDICARE AS SECONDARY PAYER
    • Medicare will not make payment if payment has been made or can reasonably be made under WC, auto or liability or no-fault insurance. 42 U.S.C. 1395 y(b)(2)(A)(ii).
  • 12. Medicare As Secondary Payer
    • Exception:
      • Medicare may make a “conditional payment” for medical treatment if a primary plan” has not made or cannot reasonably be expected to make payment…promptly.” These payments are conditioned on reimbursement to the appropriate Trust Fund…” 42 U.S.C. 1395y(b)(2)(B)(i).
  • 13. Historical Obligations
    • Primary payers have been obligated to place Medicare on notice of claims and reimburse Medicare for conditional payments since 1965 for WC and since December 5, 1980 for GL.
  • 14. Learns vs. Demonstrated
    • Effective 3/24/08
      • If it is demonstrated that CMS has made a Medicare primary payment for which the primary payer has made or should have made payment, it must provide notice.
      • Primary plan’s responsibility is demonstrated by judgment, payment conditioned upon the recipient’s compromise, waiver or release (whether or not there is a determination of liability).
    • 1990 to 3/24/08
      • If primary payer learns that CMS has made a Medicare primary payment for which the primary payer has made or should have made, it must give notice.
      • Learns = is, or should be aware.
  • 15. Medicare’s Dilemma? How to determine compliance…
  • 16. MMSEA Section 111 III. Notice/Reporting
  • 17. Civil Money Penalties
    • Failure to comply with Section 111 could result in penalties of $1000 per day, per claim.
  • 18. Medicare, Medicaid and SCHIP Extension Act
    • MMSEA Section 111
      • Enacted December 2007 by President Bush
      • Start date: July 1, 2009
      • Requires all insurers with respect to liability, no-fault and workers’ compensation, as well as self-insurers to determine whether a claimant is entitled to Medicare benefits and, if so, report any settlement, award, judgment or other payment to the Centers for Medicare & Medicaid Services (CMS)
  • 19. Section 111 Solves Medicare’s Dilemma
    • Supply data to Medicare to establish coordination of benefits
    • Achieve recovery of funds and prevent funds from being issued when there is primary coverage
  • 20. Who Must Report? Responsible Reporting Entity (RRE)
    • RRE
    • 42 USC 1395y(b)(8) provides that the “applicable plan” is the RRE
    • Applicable Plan
    • Means the following laws, plans or other arrangements, including:
      • Liability insurance (including self-insurance)
      • No fault insurance
      • Workers’ compensation law or plans
  • 21. RRE Problem Areas
    • Corporate structure
    • Deductable issues
    • Fronting policies
    • Re-insurance, stop loss, excess, umbrella
    • Multiple defendants
    • Liquidation/bankruptcy
    • Foreign nations/tribes
    • Self Insurance Pool
    • If all three are met, the Self-Insurance Pool is the RRE:
      • The self-insurance pool is a separate legal entity
      • The self-insurance pool has full responsibility to resolve and pay claims using pool funds
      • The self-insurance pool resolves and pays claims without involvement of the participating self-insured entity
  • 22. RRE Registration: 5 Steps
    • Step 1
    • Identify an Authorized Representative (AR), Account Manager (AM) and other Account Designees (AD)
      • AR – legally binds the organization to comply with Section 111, cannot be an agent
      • AM – controls the overall reporting process
      • AD – assist with reporting process
    • Step 2
    • Determine reporting structure
      • Influenced by corporate structure, claims systems, data processing systems and agents
  • 23. RRE Registration: 5 Steps
    • Step 3
    • New Registration
      • www.Section111.cms.hhs.gov
      • Registration for the RRE, it provides CMS with the RRE information
      • Must be performed for each RRE ID needed for Section 111 reporting
        • TIN
        • Company name/address
        • AR contact info
        • NAIC company codes
        • NGHP & Subsidiary info
    • Step 4
    • RRE Account Setup
      • Performed by AM
      • Enter RRE ID and PIN
      • Provide contact info for AM
      • Provide estimate of annual claims that will be reported
      • Identify agent, if any
      • Select file transmission method (reporting is done electronically)
      • Obtain login ID and agree to terms of the User Agreement
  • 24. RRE Registration: 5 Steps
    • Step 5
      • Return Signed RRE Profile Report which contains:
        • Summary of information provided during registration & account set up
        • Information needed for data file transmission
        • RRE ID
        • Quarterly file submission timeframe for claim input file
        • Contact information for COBC EDI Representative
  • 25. What will be reported to the COBC?
    • Ongoing Responsibility for Medicals (ORM)
    • Total Payment Obligation to Claimant (TPOC)
  • 26. ORM Reporting Thresholds (Begin 7/1/2009)
    • No-Fault: No threshold, report all
    • Liability Insurance: No threshold, report all
    • Workers Comp: Excluded from reporting through 12/31/2011 if
      • Claim for medical only
      • Time loss less than 7 calendar days
      • All payments made direct to provider
      • Total payment for medicals does not exceed $750
  • 27. TPOC Reporting Thresholds (Begin 1/1/2010)
    • No-Fault Insurance: No threshold
    • Workers’ Comp & Liability thresholds:
      • 1/1/2010 – 12/31/2011 > $5000
      • 1/1/2012 – 12/31/2012 > $2000
      • 1/1/2013 – 12/31/2013 > $600
      • 1/1/2014 No threshold applies
  • 28. Section 111 Reporting
    • Timeline
    • 1/1/09 – 6/30/09
      • Systems development period
    • 5/1/09 – 9/30/09
      • Registration
    • 7/1/09 – 12/31/09
      • Test/Production Query Files
    • 1/1/2010 – 3/31/2010
      • Test Claim Input Files
    • 4/1/2010 – 6/30/2010
      • Submit Claim Input File
  • 29. Use of Agents
    • An RRE may not shift its Section 111 reporting responsibility to an agent, by contract or otherwise.
    • The RRE remains solely responsible and accountable for complying with Section 111 and the accuracy of data submitted.
  • 30. Best Practices
  • 31. Top Ten Best Practices
    • 1. Obtain SSN or HICN at the outset of the claim.
    • 2. Maintain a current/signed CMS and Social Security release.
    • 3. Determine Medicare eligibility early.
    • 4. If ORM or TPOC is expected with Medicare eligible claimant, notify COBC immediately.
    • 5. Obtain conditional payment information early.
    • 6. Make sure conditional payment demand does not
    • contain duplicates, is for the same body part/diagnosis code and payable under WC fee schedule.
    • 7. Have a backup plan to determine Medicare entitlement if there is a “no match” under query access.
    • 8. Carefully monitor agents.
    • 9. Educate adjusters regarding reporting triggers/thresholds.
    • 10. Only utilize Medicare knowledgeable legal counsel.
  • 32. Thank You