2010 PLUS International Conference MMSEA: Hurry Up and Wait for the Feds
Jan 11, 2016
2010 PLUS International Conference
MMSEA:Hurry Up and Wait for the Feds
2010 PLUS International Conference
The Round-Up…
Moderator:• Thomas Paschos, Esq., Partner, Thomas Paschos &
Associates, P.C.
Panelists:• Tom Blackwell, MSCC, National Vice President of Sales,
Gould & Lamb, LLC• Theresa J. Bradley, Esq., Staff Attorney, ProAssurance
Corporations• James Reed, Esq., Associate General Counsel, Loyola University
Health System• Michael C. Stinson, JD, Director of Government Relations,
Physician Insurers Association of America
2010 PLUS International Conference
Medicare as a Secondary Payer
• Insurer is responsible for paying medical expenses “Responsible” = when case has settled or gone
to verdict
• Medicare either does not pay OR
• Medicare pays conditionally Insurer, plaintiff or attorney has to reimburse
Medicare
2010 PLUS International Conference
Present Day Medicare
• Medicare is under funded
• CMS wants its money
• No consistent way for Medicare to discover claims
• MMSEA Section 111
Payers required to report claims
2010 PLUS International Conference
Penalties for Failure of Insurer to Reimburse Medicare
• Medicare has a claim, not a lien
• Medicare can sue the insurer, plaintiff &
plaintiff’s attorney
• Double damages under the SSA
• Treble damages under the FCA
(All in addition to fines for failure to report)
2010 PLUS International Conference
Medicare Secondary Payer Act (M.S.P.)
• Omnibus Reconciliation Act of 1980.
• MMA 2003, Title III, §301
Acceptance of Liability not needed
• Medicare-Secondary Payer Status-all linesof insurance
• WC primary to Medicare since 1965
2010 PLUS International Conference
Medicare Secondary Payer Act (M.S.P.) cont’d
• Liability and No-Fault insurers Responsible to protect Medicare’s interest
• MSP gives Medicare two rights:
1. Right of Recovery
2. Consideration for Future Medicals
2010 PLUS International Conference
Medicare Secondary Payer Act & Section 111
• Carriers and self-insurers can suffer penalties
• Delayed Settlements – increased adjudication
• Medicare is ready to move forward
• Reporting began 10/1/2010
• MSP compliance is their main focus
• Settlement language is critical
2010 PLUS International Conference
Medicare, Medicaid, and SCHIP Extension Act (2007)
• MMSEA is government’s method to enforceMSP rights
• Requires insurers to “vet” Medicare statusof plaintiffs
• The reporting requirement carries heavy penalties
• Data is being reviewed by third parties
• Timing is critical
2010 PLUS International Conference
Penalties for Failing to Report
• Subject to a $1000 / day fine.
• Penalty can be assessed for data integrity issues.
• Only 1 period per quarter that you can send data
• Miss that opportunity? The penalty will be at
least $90,000!
2010 PLUS International Conference
Underwriting Implications: MMSEA and MSP
• Increased uncertainty regarding loss development pattern
• Limited actuarial information regarding cost implications Increased claims handling costs Increased claims settlement values Increased no-fault payments Increased defense costs
2010 PLUS International Conference
Assessing Risks Associated with Medicare & MMSEA
• Cost implications
• Insured’s medical specialty
• Insured’s venue
• Jurisdictional limits of liability
2010 PLUS International Conference
Understanding the Medicare and Lien Process
• Major steps in the lien process: Report claim to Medicare Request a “conditional payments” letter Determine payments “related” to claimed injury Report settlement to Medicare Obtain “final demand” letter from Medicare Pay Medicare’s claim or appeal determination
(60 days to appeal)
2010 PLUS International Conference
Importance of Medicare Lien Process
• It slows the claims process: Increased time for resolving cases
Requires additional discovery related solely to Medicare data
May need to adjust indemnity and expense reserves
Cases with large medical specials may require Medical Set Asides
2010 PLUS International Conference
• Creates difficulty evaluating risks:
Files open longer (more open at a given time)
Difficult to obtain information on pending claims
Difficult to assess risks with little claims information
Importance of Medicare Lien Process
2010 PLUS International Conference
ProAssurance –Satisfying MMSEA Reporting Requirements
• Designated a Medicare compliance attorney
• Redesigned claims system to capture required data
• Drafted claims procedures to ensure compliance
• Conducted employee and defense attorney education
• Information Systems created programs to automate the reporting
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Involvement with CMS
• Consulted with CMS from the start
• Explained Medical Professional Liability insurance to them
• One-on-one meetings
• Industry meetings
2010 PLUS International Conference
CMS
• Will be overwhelmed by reporting
• Guidance will continue to change
• May seek change to legislative authority
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CMS
• Trying to be realistic
• Wanted to accommodate industry (somewhat)
• Had no idea how P/C insurance worked
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Implementation of Reporting Requirements
• Even after a company complies; you may still not be able to relax:
Guidance may change at any time
Continue to monitor CMS
Must be focused on MSP issues now
2010 PLUS International Conference
Congress Reaction to Reporting Requirements
• Remains to be seen• Nothing this year• Legislation this year could be base for 2011 action
Medicare Secondary Payer Enhancement Act
Requires Medicare to promptly respond to demand letters
$5,000 threshold for reimbursement
Safe harbors for reporting
No SSN requirement
User fees to pay for system
2010 PLUS International Conference
Medicare Enforcement - Nationwide
• CMS will probably allow for an “adjustment period”
• Within 6 months, CMS will expect compliance
• CMS are likely to refer claims to DOJ when insurers: Should have known about a claim
Knew of a claim & intentionally failed to report
2010 PLUS International Conference
Medicare Enforcement - Regional
• “Tough” regions include Chicago & East Coast
• Southern regions (Dallas/Atlanta) known to “negotiate”
• Recent trend– coordination & cooperation among regions:
Establish consistent thresholds
Handle all similar cases similarly
2010 PLUS International Conference
Who Has Exposure?
• Anyone involved in the claims process
• In practice:
Any source of payment (insurers/self-insured entities) is highly exposed
CMS and DOJ rarely actively pursue patients/claimants and their attorneys
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Insurers – How to Avoid Litigation and Ensure Compliance
• Don’t get complacent
• Monitor CMS for guidance changes
• Get active with Congress
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Insurers – How to Avoid Litigation and Ensure Compliance
• Develop Compliant Settlement Language
• Record all attempts to collect MMSEA data
• Initial claimant - include request for 5 fields
• Start MSP compliance process early
2010 PLUS International Conference
Insurers – How to Avoid Litigation and Ensure Compliance
• Familiarize yourselves with the reporting requirements
• Designate a compliance specialist
• Develop systems within claims department to obtain and capture data
• Develop safety net to ensure compliance
• Educate staff and defense attorneys
• Educate plaintiffs’ bar
2010 PLUS International Conference
Self Insured's - How to Avoid Litigation and Ensure Compliance
• Insist that your attorneys protect your interests when payment is made: Issue a multi-party check (Medicare as a payee) Demand indemnity language in the release
• Take advantage of CMS resources: Computer-based, on-line training Town hall conference calls CMS, MMSEA Section 111 web site
2010 PLUS International Conference
Self Insured's - How to Avoid Litigation and Ensure Compliance
• Make sure your defense attorneys are MMSEA/MSP educated
• Include Medicare compliance language in all settlement documents
• Collect query Data early in Claim’s Life Expectancy
• Keep records of all attempts to collect data.
2010 PLUS International Conference
Avoiding Litigation andEnsuring Compliance
• TPAs and attorneys: Inform clients of handling protocols for
Medicare claims
Develop Compliant Settlement Language Record all attempts to collect MMSEA data Initial claimant contact should include request
for 5 fields Start the MSP compliance process early
2010 PLUS International Conference
Preventing Actions and Ensuring Compliance
• Notify Medicare of claim prior to reporting
• Take steps to ensure Medicare reimbursement/ set-aside
2010 PLUS International Conference
Preventing Actions and Ensuring Compliance
• Report Timely
• Keep Records
• Verify data
• Strictly follow your handling protocols,once established
2010 PLUS International Conference
Preventing Actions and Ensuring Compliance
• Establish strong professional relationship with contractor
• Your reputation at claims professional level is very valuable
• Establish a process to identify every potential claimant
• Catch all claimants who become Medicare eligible during pendency of case
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Predictions – Effect on Industry/TPA/Attorneys/Claims
• Crippling effect on settlement negotiation process
• Increased frustration
• Initial confusion and mistakes (on both sides)
• Eventually will become part of business process
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Predictions – Effect on Industry/TPA/Attorneys/Claims
• More Clients from liability and auto
• More E&O issues
• Claim Frequency will diminish
• Severity will increase
• Case management will become a priority forall lines
• No long term effect on number of settlements
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Predictions - Costs
• Increased settlement values
• Increased defense costs
• Increased business costs
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Predictions – Future Enforcement by the Government
• Concern is “bundling” of claims with insurers on the hook for all reimbursements
• No dramatic change
• Congress still wants Medicare to be solvent
• “Fixes” may be possible - bipartisan
• 2012 election will dominate agenda – spending will be the key issue
2010 PLUS International Conference
Questions&
Answers
2010 PLUS International Conference
Many Thanks To…
• Thomas Paschos, Esq., Thomas Paschos & Associates, P.C.,
PH: 215-636-5555/856-354-1900; E-Mail: [email protected]• Tom Blackwell, MSCC, Vice Pres. of Sales, Gould & Lamb, LLC.
PH: (941) 798-2098; E-Mail: [email protected]• Theresa J. Bradley, Staff Attorney, ProAssurance Companies
PH: 205.877.4466; E-Mail: [email protected]• James L. Reed, Jr., Associate General Counsel
Loyola University Health SystemPH: (708) 216-3708; E-Mail: [email protected]
• Mike C. Stinson, JM, Director of Government RelationsPhysician Insurers Association of AmericaPH: 301.947.9000; E-Mail: [email protected]