• No results found

2012 SUPER CONFERENCE

N/A
N/A
Protected

Academic year: 2021

Share "2012 SUPER CONFERENCE"

Copied!
26
0
0

Loading.... (view fulltext now)

Full text

(1)

Medicare Secondary

Payer Update

Timothy K. Michels, Esq. Chief Operations Officer

Jennifer C. Jordan, Esq. General Counsel

(2)

A National Look at WCMSAs

• Many procedural improvements at CMS during past 12 months (New WCRC and MSPRC contractors & web portals)

• Supreme Court clarification on recovery rights forthcoming? (Hadden cert. petition scheduled for discussion on Sept. 24th)

• Official Regulations regarding future medicals proposed after 11 years of administration by memo (CMS-6047-ANPRM)

• 2 bills sitting before Congress attempting to resolve MSP issues (HR1063/SB1718 and HR5284)

• Widespread confusion continues as to MSP obligations v. CMS recommendations

(3)

A National Look at WCMSAs

MSAs Approved by CMS: Year # MSAs Total Approved

2008 20,255 $905,202,448 2009 24,203 $1,125,261,415 2010 26,296 $1,443,739,397 2011 28,847 $1,102,662,414

• Impossible to track WCMSAs funded but not submitted to CMS

• CMS approval is voluntary, so cases not submitted cannot be assumed to be non-threshold

• MEDVAL submitted only 22.8% of cases evaluated in 2011

• CMS likely reviews less than half WCMSAs funded annually, meaning $2.5-$3 billion annually could be funded in WCMSAs alone

(4)

• New contractor effective 7/2/12

• Cases submitted after 7/2/12 have average turn around of 28 days

• Estimated that backlog exceeds 10,000 cases

• Average turn around time for backlog cases exceeds 180 days

• New contract did not include responsibility for the “backlog”

• CMS blames backlog on MD emergency regs and 2010 computer system problem – so long as no similar influx of cases or inhibited productivity, there is little reason to believe problem will be repeated Note: WCMSAP (web portal) can also be attributed to improved TAT

(5)

WCMSAs Approved by CMS

• Represents essentially a WC carrier’s lifetime exposure under state law of the worse possible medical scenario

• Drugs are unrealistically projected based upon regime at time of

settlement projected over life expectancy and priced at AWP without consideration of anticipated patent expirations

• No considerations for evidence of malingering or fraud

• No refund for post-settlement miracles

• Essentially tendering reserves to close the claim (if even adequately reserved to cover the unreasonable MSAs “recommended” by CMS)

(6)

Cost Considerations of CMS Approval:

• MSA Vendor Fees (update information/submission fee)

• Approval Time (9 month average in 2011)

• Ongoing Indemnity & Medical Expenses During Wait

• Additional Defense Costs (particularly if bifurcated)

• Opportunity for Claimant to Back Out of Settlement

(7)

Injured Workers’ Insurance Fund

• Leading writer of WC in Maryland / 23% market share

• $190M in annual premium / 20,257 in force policy count

Settled: Year # Cases Total Settlement Amount

2008 2873 $64,789,446

2009 2678 $71,801,195 [no CMS submissions after 6/1]

2012 1270 $48,930,226 [MD emergency regs instituted]

2011 1296 $62,794,511

(8)

IWIF Sample MSA Set Evaluated

135 randomly selected cases settled with MSAs between 1/1/11 and 6/1/12 and funded with structured settlements. Of the sample:

• 64 cases were not submitted (47%)

• 29 cases were approved as submitted (41%)

• 28 cases were countered higher (40%)

• 9 cases were countered lower (12%)

(9)

MSA Figures

• $17,084,795.00 total proposed MSAs

[$6,316,977.00 medical / $10,767,817.37 Rx]

• $15,070,481.25 in corresponding annuity premium (inclusive of any indemnity & custodial fees – 11.75% savings from just lump sum funding of corresponding MSAs)

• Of the $12,437,499.47 approved by CMS: – counter higher = $1,552,767.85 [low: $3,426.21 (8%) – from $41,204 to $44,631] [high: $237,425.30 (56%) – from $409,795 to $647,221] – counter lower = $44,575.58 [low: $12,941 (9%) – from $137,995 to $125,054] [high: $106,160 (56%) – from $190,415 to $84,265 ]

Note: CMS tolerance is 5% so no counter if proposed MSA is +/- 5% of WCRC independent review. Counters primarily due to Rx addition or AWP changing between submission and CMS review.

(10)

Turn Around Time

• Of the 66 cases reviewed by CMS, turn around time ranged from 4* to 390 days (179 days on average)

• Once approved by CMS, days to MD WCC approval ranged from 13 to 352 days (98 days on average)

• $1,016,475.44 paid in ongoing WC benefits between date MSA submitted to CMS and approved by the MD WCC

– $394,600.21 medical / $621,875.23 indemnity

(11)

Rx Pricing Considerations

• Evaluated 200 IWIF MSAs calculated between 8/1/10 and 8/11/11

• Compared Rx cost at AWP v. mail-order pharmacy program

Total MSAs AWP Total MEDVAL Rx

$50,089,412.96 $39,799,341.64 $29,190,096.97

_______________________ Difference = $10,609,244.67 Conclusions:

1) Rx expense made up 79% of total MSA spend

2) CMS approved WCMSAs average 27% more than a

reasonable/defensible future medical cost projection using pharmacy program available to the public

(12)

Professional Administration

• Of 135 IWIF cases evaluated, 19 are professionally administered (14%)

• Cost ranged from: $10,278 ($500/19yrs) - $33,749 ($1750/25yrs)

• 6 claimants have never submitted a bill

• 1 account was arranged for and paid by claimant

• 1 account ordered by the Maryland WCC due to mismanagement

• IWIF maintains a reversionary interest in unused funds

• Examples of Post-settlement treatment changes:

{ $142K/27yrs of OxyContin => now using Methadone at $8.46/mo. (overfunded by $139K) { $13K/40yrs of Morphine Sulf. ER => Exalgo 8mg at $651.77/mo. (underfunded by $300K)

(13)

0 5 10 15 20 25 30 35 40 45

MEDVAL Administered MSA Account Trends

2003 - 2012

Have Never Submitted a Claim

Exhaust Every Year

Treat In Accordance with MSA Projections Average 25% Surplus Every Year

(14)

Funding MSAs with Annuities

• CMS approved method of funding MSAs at present value

• If self-administered, a protection from unrelated total dissipation

• As life expectancy increases, savings increases due to longer payout period, but so does exposure to medical cost inflation

• Annuity can be used to maintain a reversionary interest MSA funds projected beyond death of claimant

• Savings of funding with annuity v. lump sum averages 34%

Total MSA Total Cost Savings % Annual Deposit LE $89,097.35 $56,792.08 $32,305.27 36% $3,556.94 18

(15)

Conclusions about CMS Approval

You are paying between 25% and 35% in additional MSA expense to obtain CMS’ opinion, frequently in

(16)

Does Funding an MSA End Your MSP Exposure?

CMS states it will cover treatment beyond the amount of an approved MSA, but what if:

• CMS approval was not available?

• Claimant used the funds for other “needs”?

• Medicare gets billed anyway & makes payment?

• Medicare coverage changes?

• Physicians refuse to bill at calculated rate?

(17)

Purpose of an MSA

To

 

avoid

 

post

settlement

 

recovery

 

actions

 

by

 

the

 

federal

 

government

 

for

 

reimbursement

 

of

 

Medicare

 

overpayments

 

made

 

for

 

excluded

 

treatment

 

related

 

to

 

the

 

insurance

 

settlement.

 

(18)

This is a Risk Management Issue, Not Compliance

What happens if you:

• Fund MSA & Claimant never treats again

• Elect self-administration & Claimant goes shopping

• Fund MSA not approved by CMS but professionally administer

• Fund MSA w/life only annuity & Claimant dies next day

• Don’t/can’t get CMS approval & Claimant’s condition worsens

• Promise to pay whatever CMS says & it counters higher

(19)

5 things that are NOT true about MSAs:

• The MSP expressly obligates parties to an insurance settlement to “protect Medicare’s interests.”

• MSAs are only necessary when established thresholds are met

• CMS approval of MSAs is required if certain thresholds are met

• CMS approval of a WCMSA is binding

• A claim exists under federal law for failing to protect Medicare’s interests with an MSA in an insurance settlement.

(20)

Medicare May:

• Seek reimbursement for related Medicare payments

• Deny benefits/payments for related treatment

• Suggest an amount that protects its future interests

• Demand a certain settlement allocation for future medicals

• Demand funding of a debt not actually incurred

• Demand medical reimbursements in excess of state law and/or contractual obligations

(21)

Actual Obligations Under the MSP

That

 

Medicare

 

not

 

make

 

payment

 

when

 

an

 

insurance

 

payment

 

has

 

been,

 

or

 

should

 

be,

 

made

 

(statute

 

silent

 

to

 

timing

 

in

 

relation

 

to

 

settlement

 

so

 

applicable

 

post

settlement?)

If

 

Medicare

 

makes

 

a

 

conditional

 

payment

 

&

 

there

 

is

 

insurance

 

coverage

 

or

 

a

 

settlement,

 

judgment

 

or

 

award

 

inclusive

 

of

 

medical

 

damages,

 

then

 

Medicare

 

must

 

be

 

reimbursed

 

by

 

the

 

primary

 

payer

 

or

 

anyone

 

in

 

receipt

 

of

 

the

 

insurance

 

payment

 

(22)

Settlement Goal

Take measures to reasonably provide for future medical expenses so that Medicare will not make any related post-settlement

payments that would require reimbursement. Options to Avoid Medicare Exposure:

– Seek CMS approval of & fully fund a WCMSA

– Allocate a reasonable portion of settlement funds and use the same to pay for future medicals

– Create alternative means of providing for medical payments as they occur (custodial admin, trust, captive, etc.)

(23)

Remember…

• There is no legal claim for failing to fund an MSA

[MSA represents unliquidated, inchoate damages – Frazer v. Transcontinental Insur., 374 F. Supp. 2d 1067 (N.D. Al. 2004)].

• No debt exists until related treatment has been obtained and paid by Medicare

• Don’t put too much faith in CMS’ overreaching tendencies

[An administrative agency’s interpretations such as those in opinion letters, like interpretations contained in policy statements, agency manuals and enforcement guidelines, do not warrant deference under Chevron, but instead are only entitled to respect under Skidmore (Christiansen v. Harris Co., 529 U.S. 576 (2000))].

(24)

Federal Claim for Double Damages…

• MSA must exhaust (preferably on related treatment)

• Related conditional payments must be made by Medicare

• Reimbursement demands must be made and not paid

• Medicare appeal process must be exhausted (4 steps)

• Judicial review of the Medicare appeal is available (through to the Supreme Court if necessary)

• The debt must still remain unpaid and the DOJ must file suit for the double damages to attach, and then potentially

navigate the entire federal court system

(25)

Some Parting MSP Thoughts…

• Treat MSP with a holistic approach / incorporate into the entire claims process from acceptance to settlement

• Conquer the fear / make informed MSP decisions

• Evaluate potential future exposures from a financial & risk management perspective

• Consider alternative solutions & case by case considerations

• Avoid “buying” assurances from CMS that are not commensurate with your risk

(26)

Questions?

Timothy

 

K.

 

Michels

tmichels@iwif.com

References

Related documents

A Medicaid claim for Medicare coinsurance is called a “crossover claim.” Generally, the amount Medicaid pays for a crossover claim is the Medicare-approved amount less the

Medicare Secondary Payer Manual, Ch. • Medicare is secondary to no-fault insurance even if State law or a private contract of insurance stipulates that its benefits are secondary

The mandatory reporting requirements in the MMSEA take matters a step further, however, and allow Medicare, armed with settlement details, to protect its interests as

 The claimant is a Medicare beneficiary Medicare beneficiary Medicare beneficiary and the total Medicare beneficiary settlement amount is greater than $25,000.00 greater

For settlements outside Medicare thresholds, the settlement agreement must contain: A statement that Medicare’s interests have been considered.

amount, are health insurance liens boardable under medicare conditional payment in going to your case of settlement amounts paid to hire an.. unsecured claim is

permanent containment of CO 2 to prevent and, where possible, eliminate as far as possible negative effects and any risk to the environment and human health!. 229-28: The

Tef flours from mill 2 have the lower mean particle size and higher starch