CMS is Hard at Work in Summer 2020

Incoming Changes to WCMSA Activities

Even in the face of the health and civic challenges the country is enduring, the Centers for Medicare and Medicaid Services (CMS) maintains its pursuit its institutional goal of keeping its constituents current with evolving standards. Recently, the CMS issued two new directives, one for MSA calculations and one for improved MSPRP portal functionality, which became or will become operable on April 25 and July 13 of this year, respectively. Readers are encouraged to update their practices and policies to reflect the changes.

New 'Life Table' for MSA Life Expectancy Estimates

On April 25, the Agency switched over to using the 2017 version of the United States Life Tables for calculating life expectancies, as the National Vital Statistics Report publishes those. The 2017 table replaces the 2016 schedule, which has been in official use just since October 12, 2019. The newer version, reflected in Manual Version 3.1 released May 11, 2020, reflects the differences in life expectancies revealed by 2017's final mortality data.

The CMS uses life expectancy tables for many reasons, only one of which is to calculate an estimated term for the duration of a Medicare Set-Aside Account (MSA). The life expectancies' statistical values provide guidance for MSA participants to determine the number of years and the projected value of costs to include in the overall calculation of the MSA financial reserve.

Many Uses for Life expectancy Data

The availability of an MSA is an enticing option for anyone who suffers a debilitating injury that will impede their earning capacity for their foreseeable future. The account will ensure that the costs incurred because of those injuries will be paid for by the entity legally responsible for making those payments. Only a small percentage of Medicare-eligible or recipient people will suffer injuries that will require the establishment of a life-long MSA. At this time, only those injured on the job and who have Workers’ Compensation claims are specifically identified as appropriate candidates for an MSA. However, CMS has recently been considering also adding cases involving injuries legally caused by neglect or intention (claims arising from 'liability' cases) to their roster of 'encouraged' MSA candidates.

But, as an agency, CMS also has an interest in establishing an MSA for any person who may need long-term funding for injuries AND who is also Medicare-eligible or will be eligible for Medicare within two years. By law, CMS is responsible for funding healthcare costs for millions of current and future Medicare beneficiaries. The Agency must manage the funding received for that purpose to allow for comprehensive coverage as its recipients need it, and that pool of beneficiaries is growing as the general population ages. Also, by law, however, CMS is NOT responsible for covering healthcare costs for injuries or damages caused by a third-party, such as injuries that occur in a job-related accident or car crash. Any healthcare costs attributable to those injuries must be paid for by the legally responsible entity. To establish an MSA for any reason, the claimants must clarify which entities are responsible for covering costs of specific injuries or damages, to ensure that Medicare doesn't inadvertently pay for something that is rightly the responsibility of another person or company.

Data Reveals Significant Changes

CMS's capacity to properly manage Medicare payments is becoming more complex, too. In just the last ten years, the number of Medicare recipients has more than doubled, rising from 11.1 million in 2010 to over 24 million today. By 2060, the number of Americans aged 65 and over will grow by 23% (up from 16% in 2018). CMS will be responsible for funding the healthcare services for most, if not all, of them. During that same decade, as well, improved living standards and evolving healthcare capacities are also helping Americans live longer lives, and the healthcare funding supplied by CMS will have to cover those extended lifespans as well. Accordingly, when Medicare-eligible people or recipients are injured, their potential lifespan - the number of years they expect to live - becomes an integral factor in the calculation of their long-term healthcare costs.

According to the Vital Statistics Report, between 2016 and 2017, overall life expectancies declined by .1, from 78.7 years to 78.6 years, for whites in general (primarily white males) and non-Hispanic whites. It did not change for blacks, non-Hispanic blacks or Hispanic populations, however. MSA applications submitted on or after April 25, 2020, are required to be calculated per the new statistical measurement. Considering the size of the Medicare-eligible population, even small drops in lifespan can make a difference in long-term CMS funding decisions.

Making CMS Recovery Cases Easier to Manage

As readers know, CMS works hard to recover payments made on behalf of Medicare beneficiaries that should have been made by other parties or entities. The recovery of unnecessary fees is critical to the mission of CMS, which must limit its healthcare coverage payments only to legitimate Medicare and Medicaid beneficiaries, including those who have established a Workers’ Compensation Medicare Set-Aside Account (WCMSA). The CMS Benefits Coordination and Recovery Center (BCRC) will open a recovery case to retrieve funds when the Agency makes provider payments erroneously or as a conditional payment made before the establishment of legal liabilities.

To facilitate the recovery action, the BCRC provides an online portal - the Medicare Secondary Payer Recovery Portal (MSPRP) - through which third-parties and MSA case participants can communicate about recovery case data and details. Cases that originate through the BCRC and through the Commercial Repayment Center (CRC) can be managed through the portal. Users of the portal include claimants, their representatives, attorneys, insurers, beneficiaries, and recovery agents. The portal allows users to interact digitally with the Agency about the case, whether they're requesting updates, contesting claims, or signaling that a resolution has been reached, among many other actions.

In recovery cases, the Agency has begun proceedings to retrieve reimbursement of previously made payments from the claimant or party that is ultimately responsible for paying an obligation. To maintain current recovery-related communications among the parties and with CMS, users can access the portal to retrieve files needed to support their claims or record their activities. The recovery case file is organized around the various actions taken by both the Agency and case parties and includes tabs related to:

payment information,
electronic payment histories,
refund information,
letter activities (mail),
waivers, redemptions, and
compromise information, and
final conditional payment processes.

The portal helps users find the information they need to respond to, defend, and resolve the recovery case.

Currently, however, the portal isn’t particularly user-friendly. Users haven't been able to view or print documents contained in the Letter Activity tab, which has hindered their capacity to maintain a complete file of documents issued by the Agency, or track case developments. CMS has recently remedied that situation, however, and, as of July 13, 2020, users who access the site through double authentication procedures will be able to both view and print the documents they seek through the portal's Letter Activity tab.

The Letter Activity tab is rife with crucial case data because it contains all the documents generated by the Agency concerning the claim. Maintained chronologically, each record sets out information about the status of issues arising within the materials, including the opening date of the document, its closing date, and a sent date if the Agency moved the matter onto another agent or office.

Accessing the portal to view and print documents gives users better control over the information they need, so there is no longer any confusion about the opinion or standing of the CMS at any point within the recovery case. The CMS issued version 4.8 of the MSPRP User Guide on March 30, 2020.

Medicare and the Workers’ Comp System

The Medicare and Medicaid systems are fundamental sources for healthcare services for America's seniors and disabled people. The Centers for Medicare and Medicaid Services (CMS) runs the healthcare networks that span the country and provide medical services for millions of people. When Medicare-eligible people suffer injuries at work, CMS can only provide healthcare funding when there is no other entity who is or should be held liable for those costs. It is this circumstance - the nexus of the CMS and Workers’ Compensation (WC) systems - where numerous issues and concerns arise in many, many injured worker cases.

History of Medicare and Medicaid

Most people recognize that maintaining good health becomes increasingly expensive as one ages. The number and severity of chronic conditions - diabetes, high blood pressure, arthritis, etc. - often increase as strength and agility decline. For these reasons, in 1965, the United States government developed the Medicare system - to ensure older Americans had access to appropriate health care services. The system assured a universal right to health care at the age of 65 years, which also reduced the cost to public hospitals of caring for otherwise uninsurable elderly patients.

However, establishing the system took time, and its implementation was fraught with delays, confusion, and arguments: what services should be offered? By Whom? Who will pay for those services, and how will those payments be made? Over time, various state and federal officials worked through many of those 'kinks,' and today's system runs relatively smoothly, considering it retains thousands of healthcare professionals and provides services to more than 44 million Medicare recipients.

Back in 1965, during the development of the Medicare system, several decisions were made that have proved critical to the success of the public health care system:

A compromise among three competing structural proposals resulted in a two-part senior healthcare plan, with a third prong covering low-income and disabled persons:
- Medicare Part A provides insurance coverage for hospital costs of seniors, and
- Medicare Part B covers outpatient physician services.
- The third prong established a right to healthcare for low-income families (regardless of age), the blind, and the disabled and eventually was titled, "Medicaid."

The money to pay for these services would come from every employed worker in the country, who would contribute a small portion of every paycheck into the national fund. The system would record their contributions and, when those funds were needed, the worker would be guaranteed access to healthcare services, regardless of actual cost.

These two decisions - the services to be available and who would pay for them - laid the foundation for today's Medicare and Medicaid programs. These programs provide healthcare services for millions of seniors and disabled people who would otherwise have no access to relevant medical resources.

Medicare

Generally, one's age, legal status, and/or diminished capacity determines their eligibility for Medicare.

Medicare Part A - Hospital Insurance

Medicare Part A services are provided to every person 65 years or older who paid (or whose spouse paid) Medicare taxes for at least ten years. It is also available for younger people who have disabilities, and anyone with End-Stage Renal Disease. Recipients aren't required to pay premiums for the services if they are eligible to receive or are receiving Railroad Retirement or Social Security benefits. Otherwise, recipients can purchase Part A coverage.

Medicare Part B - Medical Insurance (Outpatient)

Part B coverage is optional, and everyone who wants it must pay for it. To qualify, each recipient must be at least 65 years and a citizen or legal resident of the United States. These payments are deducted from Social Security or Railroad Retirement benefits, or the recipient is billed every three months.

Medicare Part C – Privately Provided Add-ons

Part C is offered through private healthcare companies that provide additional services as well as Medicare Parts A and B (usually vision, dental, and hearing services, among others). These companies received payment from Medicare for their Medicare-eligible recipients, and charge an additional premium for the additional coverages.

Medicare Part D – Prescription Drugs

Neither Part A nor Part B includes coverage for prescription drugs, which are covered by Medicare Part D.

Exceptions

People under 65 years can also receive Medicare benefits if they have qualified for Social Security Disability Insurance (SSDI) and have been receiving those benefits for at least 24 months. The Social Security Administration manages these benefits.

Medicaid Eligibility

Medicaid is separate from Medicare in that it is administered by the States, according to federal rules. Both the state and federal governments pay into the funds providing Medicaid services. Medicaid recipients include low-income individuals and families, children, pregnant women, and people with disabilities.

Medicare's Connection to WC cases

As we noted in our post of September 3, 2019, Workers’ Compensation insurance gives both injured workers and their employers a 'litigation-free' venue for resolution of issues arising from on-the-job injuries. The process eliminates the need to determine liability (via expensive lawsuits) while ensuring that injured workers receive the medical and injury care they need to recover. In these cases, most often, the proceeds from the WC insurance are the sole funds used to cover the injured person's medical costs during recovery and rehabilitation.

Recently though, as the American population ages, more people are working well into their 60's and beyond. They may be eligible for both Medicare coverage in addition to WC coverage if they are hurt at work. A fundamental challenge arises from this scenario based on the original purpose of the funds that are used:

The employer pays a premium that provides WC funding for the specific purpose of ensuring its workers have access to medical resources in the event of an on-site injury. Several factors influence WC premium values, such as relative levels of on-site risk, available safety mechanisms, and worker safety training, among many other variables. Each of these worksite factors is designed to reduce the likelihood of an injury. The employer and its WC insurance company must use those calculated WC funds specifically to assist the injured worker while concurrently holding the employer safe from liability claims.
Medicare funds, on the other hand, are available only due to the worker's age or capacity and are earmarked to cover costs when there are no additional insurance or other funds available. Most importantly, these funds are intended to be used only when the person has no other healthcare resources available, and Medicare funds are their sole means of obtaining healthcare services.

In the case of an injured worker who is also over 65 years of age, these two funding sources are available for those medical costs because they qualify in both systems. Further, either or both sources are often tapped for use early on, in the immediate aftermath of the injury, when urgent care is necessary. It's usually only after that immediate care is provided and the patient is stabilized that the financial professionals look into the cause of the injury, and that's where Medicare funding can muddy up the WC case.

Causation and Medicare in a WC Case

In a straight-up WC case, the actual cause of the accident may not be significant to the case's final resolution (that's what the insurance is for). In the WC/Medicare cases, however, causal factors may matter a lot.

Under the Medicare Secondary Payor Act (MSP), Medicare funds are deemed 'secondary' (to be used after primary funds are exhausted) to those of other, non-employer entities if they contributed to the cause of the injury. However, that 'secondary' classification can't be made until those contributing factors are established, and that determination may not be made for days or even months after the incident. The MSP Act asserts that when another entity is deemed to have caused the injury, then it is improper to use Medicare funds to cover the cost of the recovery. Further, when that determination is made, but Medicare funds are already dispensed, then the CMS has a legal duty to go after that other entity to retrieve those funds back.

Investigations are Critical for Protecting Medicare Funds

Ergo, the investigation of both the cause of and the responsible parties for a workplace injury often drags out the WC case, and creates the need for CMS oversight and also, in many cases, litigation. As we noted in our October 1st blog post, there can be many contributors to the cause of a workplace injury. Many companies use third-party contractors in their business, whose on-site activities may have caused a dangerous situation. Other participants in the work at hand may also be contributors, such as the manufacturer of tools or machinery in use at the time. Consequently, in any case when a non-employer entity may be responsible for the conditions that caused the injury, then CMS will pursue the case to ensure that no Medicare funds are spent inappropriately for medical services related to that injury.

The Medicare Set-Aside Account

After making those determinations and identifying the entity(ies) responsible for causing the injury, then an account is often created to maintain the funding needed for those healthcare services until they are no longer necessary. For injured workers who are also Medicare-eligible or recipients, that account is (in most cases) a Medicare Set-Aside account, which holds injury-specific healthcare funds to prevent the use of Medicare funds for that purpose. Additionally, CMS tracks the use of those funds over time; entities responsible for managing those funds must report on how they are used and can be fined if they fail to report or misuse the money.

See our post next month to learn how Medicare Set-Asides are established and managed to protect the interests of both the Medicare recipient and the Medicare system in general.

Looking Ahead to 2018

On October 1, 2017, the Centers for Medicare and Medicaid Services (CMS) was scheduled to stop paying for health care services that should, instead, be covered by parties deemed responsible for those damages pursuant to liability and no-fault insurance cases. In early 2017, the agency had announced that Medicare-beneficiary claimants in both liability and no-fault legal cases should consider adding a Medicare Set Aside account term to their settlement negotiations, to ensure adequate protection for Medicare if/when those injuries require long-term care services. At the same time, CMS asserted that it would establish two new processes for Liability Medicare Set-Asides (LMSA's) and No-Fault Medicare Set-Asides (NFMSA's), each of which would trigger use of a new code - N723 for LMSA cases, and N724 for NFMSA's - when the agency rejects requests for payment due to the existence of the alternative payor funding. Now that the October 1 date has passed, what has changed, if anything, in the MSA administration world, as it relates to LMSA's and NFMSA's? Let's just say it's been a bumpy Autumn.

New Contractor; New Challenges

The addition of LMSA's and NFMSA's to the already busy CMS reimbursement system has been made more challenging by the September 1, 2017, entry into that system of a new Workers’ Compensation Review Contractor (WCRC), Capital Bridges, LLC. The contract title notwithstanding, the new administrative entity will be responsible for managing all of the LMSA and NFMSA cases, as well as the Workers’ Compensation cases already on its agenda.

Under optimal circumstances, a new contractor in such a complex field will face many challenges with which it may have little or no experience. In this case, unexpected events have delayed the commencement of the contract, which has delayed any forward movement on the LMSA and NFMSA front as well:

Shortly after CMS awarded the WCRC contract, two other corporate candidates filed protests with CMS about that appointment. Arch Systems Inc. and KEN Consulting, Inc. each filed a complaint with CMS protesting the award to Capitol Bridge, which caused a stop-work order preventing Capitol from beginning work. It was only this past week, on December 13, that the General Accounting Office (GAO) denied the protests, thereby allowing Capitol to (finally) get to work on its reviews of the Workers Compensation cases.
Despite promises contained within a September 19, 2017, article to offer guidance and support for LMSA and NFMSA claimants, on October 3, 2017, CMS rescinded those comments. The September 19 article addressed how health care providers should manage those cases where their patients have a WCMSA, LMSA, or NFMSA. Despite the gap, CMS has not offered any guidance on the subject after the October 3 date.
Further, despite its promises to provide more comprehensive instructions for LMSAs and NFMSAs, as well as its assertion that it will stop paying for care in cases that should have an LMSA or NFMSA, the agency remains quiet about the processes or structure of its potential LMSA and NFMSA policies, leaving claimants, insurers, employers, and settlement agencies in the dark about their next steps.

Prognosticating the Future

So, as Winter 2017 begins, we still don't know what CMS is going to do about the management of LMSA's or NFMSA's. It appears likely that the agency will include both liability and no-fault carriers as alternative payors and reject claims for which those entities have the obligation to pay for healthcare services. It also appears likely that the new WCRC will be the entity that that reviews proposed LMSA's and NFMSA's, although the processes to get the case in front of it aren't yet known. Not surprisingly, our clients are understandably nervous about what the incoming changes at CMS and in the MSA system will mean for them moving forward.

So, here at CompEx MSA, we have determined that our best practices and next steps will be to ensure that our clients continue to receive the best possible service for all their MSA needs. In addition to keeping our clients and customers informed about the ongoing drama at the CMS, we will also continue to evolve our practices to conform to industry changes:

Since WCMSA's are voluntary, we believe that LMSA's and NFMSA's will also be voluntary. Therefore, we will apply WCMSA best practice protocols to incoming cases with an LMSA or NFMSA potential.
As each case comes in, it will be vetted for CMS interests that might trigger the possibility of the development of an MSA, regardless of whether it is a worker’s compensation, liability, or no-fault case.
As always, we will complete an exhaustive medical-legal evaluation of each claim, adding now the possible ramifications of the varying legal obligations that might arise in each party to the case, including insurance policy limits, negligence rules, and applicable statutory and case law.
When necessary or appropriate, we will also evaluate liability or no-fault cases to identify next steps in cases of insufficient funds on the part of the liable parties.

CompEx MSA is Here to Help

As one of Florida's certified minority-owned businesses, CompEx MSA is proud of its reputation for providing high-quality MSA services to both state- and nationally-based customers. We value all our clients equally and are looking forward to serving their MSA needs in future workers’ compensation, liability, or no-fault cases, regardless of how CMS elects to move forward with those processes.

Meet the Newest CMS WCRC Contractor

There is a new Worker's Compensation Recovery Center WCRC contractor in place as of September 1, 2017. The new contractor is Capital Bridge LLC, headquartered in Arlington VA., which replaces Provider Resources Inc. (PRI). The contract award is notable for several reasons:

It comes two months later than its announced date. Since early July, all parties to Medicare Set-Aside agreements have been waiting to learn whether the CMS would reaffirm PRI, of Erie Pennsylvania, as the continuing WCRC contractor. PRI has held the contract since 2011 and is responsible for speeding review and turnaround times as well as implementing an improved approach to re-review considerations and development letters. The announcement reveals that the CMS awarded the contract to Capital Bridge LLC. instead of PRI.
Part of the delay in announcing the award is believed to be because PRI needed the time to complete the reviews it still had open. Allegedly, those claims are now complete, and Capital Bridge began taking in new claims as of September 1.
Additionally, the new contract comes with a much larger dollar amount. The previous contracted dollar amount was $5,124,084, while the new dollar amount totals $60,759,236. Although there were no details given in reference the enhanced dollar value of the contract, many industry insiders believe the agency is preparing to cover the MSA costs for more liability and non-group health-related MSA claims in addition to workers compensation MSA claims.

Potential Impacts of the New Contractor

Slow Turnaround Times?

New contractors must often go through a learning curve as they come up to speed on contract terms, exceptions and other anomalies related to the MSA process. That learning curve can slow down the review process, at least for a short period. PRI had reduced the MSA review turnaround time to an average of 14 days, which allowed insurers, injured workers, and other MSA agencies to move forward quickly with the settlement of the worker's compensation claim.

This new contractor may take more time to come up to speed with current practices, so parties with existing or newly filed cases may experience longer delays. Additionally, the recently issued new reference guide, which became effective as of July 21, 2017 instituted new re-review practices, now titled Amended Reviews, which some parties to MSA's may not yet have mastered. How MSA review and management processes will roll out under the new contractor remains to be seen.

In Other News …

Recovering from Other Responsible Entities

In other CMS news, the agency is reporting recovery of over $100 M in net collections for the Medicare program for its fiscal year 2015-2016. The amount represents monies paid by Medicare to medical providers when there was another responsible payer available. That sum was only a part of the over $240 M that Medicare paid but which should have been covered by another responsible payor. The agency continues to work to collect the balance of those 2015-2016 accounts.

CMS has an obligation to taxpayers to collect back funds paid to providers before the worker's compensation case settles and liability for the payments is established in another insurer or entity. In the 2013-2014 fiscal year, the agency collected a net of $59 M, but in the 2014-2015 fiscal year, it collected substantially more, a net $150 M. The bump up between the 2013 and 2014 fiscal years is attributed to the increase in collections from non-group payers, an payer category only recently opened for review by CMS.

The drop in collections from 2015 to 2016, however, is attributed to more group health payers stepping up and assuming their obligations before the agency is compelled to pursue those claims, a trend that the industry hopes will continue. As every industry participant works to achieve peak efficiency, some are reaching out to CMS to identify Medicare patients earlier in the claims process. By doing so, they can resolve the Medicare aspect of the case earlier and move the case faster to eventual resolution.