Medicare: Primary Payer Compliance


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

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Medicare: Primary Payer Compliance

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