Skip to Main Content

Medicare watch list: Staying ahead of the Medicare Secondary Payer compliance curve

As another new year settles in, we know at least one thing is certain: Medicare Secondary Payer (MSP) compliance will continue to present formidable challenges for claims payers. With each passing year, MSP issues seem to grow in both number and complexity—and 2018 promises to be no different.

To help prepare for another year of Medicare fun, the following provides a quick MSP level set and key items to watch in 2018:

Medicare Part D The Next Recovery Frontier?

SSNRI/MBI Initiative

Starting this April, the Centers for Medicare and Medicaid Services (CMS) will begin replacing all Medicare cards with a new unique 11-byte Medicare Beneficiary Identifier (MBI) number. This is all part of CMS’ Social Security Number Removal Initiative (SSNRI) as mandated under the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. This law requires CMS to discontinue all SSN-based Medicare identifiers and to reissue all Medicare cards with a new MBI by April 2019.

MACRA contains a special MSP exemption that provides claims payers with flexibility in dealing with CMS on MSP matters. Specifically, claims payers will still be permitted to use a claimant’s Health Insurance Claim Number (HICN) or SSN (in addition to using the new MBI) in connection with standard MSP practices, such as Section 111 reporting, conditional payments, Medicare Set-Asides, and using CMS’ various MSP portals.

Section 111 Reporting

It is unknown if 2018 will finally be the year CMS revisits the issues of Section 111 penalties and good-faith safe harbors. In December 2013, CMS sought public comment on what circumstances and factors should be considered in establishing Section 111 penalties and compliance “safe harbors” when a Responsible Reporting Entity (RRE) is unable to determine a claimant’s Medicare status despite “good faith” efforts to do so. However, to date, CMS has not taken any further action on these issues.

On another front, CMS recently released an updated Section 111 Non-Group Health Plan (NGHP) User Guide (Version 5.3, December 15, 2017). This latest edition provides reporting updates involving CMS’ SSNRI/MBI initiative, ORM termination, ICD-10 exclusions, matters related to the retiree drug subsidy (RDS), and contact protocol for Section 111 data escalation.

Read: Overview of CMS’ latest NGHP User Guide.

Conditional Payments

All eyes are closely watching what will unfold regarding CMS’ recent award of the Commercial Repayment Center (CRC) contract to Performant Financial Corporation (Performant). Performant assumed responsibilities from previous contractor, , CGI Federal, on February 12, 2018.

The CRC is the contractor that CMS uses to process conditional payment recoveries for Non-Group Health Plan (NGHP) claims where the claims payer is the debtor. Under this process, CMS uses the CRC contractor to pursue recovery against claims payers when the payer has assumed ongoing responsibility for medicals (ORM) prior to claim settlement. This process typically impacts workers’ compensation, no-fault, and med-pay claims as these claims often involve ORM.

CMS and Performant held a Town Hall call in January to discuss pertinent transition items. Performant advises that its goal is for a seamless, smooth, and efficient transition. Toward these objectives, Performant plans to reach out to industry stakeholders and vowed to be available to stakeholders during its tenure as the CRC.

Other key items discussed on the call included:

  1. Performant will maintain the same recovery processes that CGI Federal has been using (i.e. seeking recovery against payers in ORM situations).
  2. All current case information will be transitioned from CGI to Performant.
  3. Performant will have access to completed case histories, copies of communications, correspondence and contact information, including authorizations.
  4. All recovery processes, including established timeframes, will remain the same

As Performant takes over, the industry will need to closely monitor what changes (if any) the new contractor makes to the CRC recovery process, and evaluate any differences from the industry’s interaction with CGI Federal over the past few years.

Read: For a more in depth overview of our Town Hall summary.

Read: ISO Claims Partners can help you address conditional payments and reduce costs.

Workers’ Compensation Medicare Set-Asides (WCMSAs)

New days are coming for WCMSAs with CMS’ award of the Workers’ Compensation Review Contract (WCRC) to Capitol Bridge, LLC, in July 2017. The WCRC is responsible for reviewing and approving WCMSA submissions. Capitol Bridge will replace the current contractor, Provider Resources, Inc. (PRI). Capitol Bridge took a step closer toward full transition as CMS’ new WCRC in mid-December, when the Government Accountability Office (GAO) denied the bid protests filed by two contractors that challenged CMS’ award.

As with previous contractor changes, it remains to be seen how the WCMSA review process will change once Capitol Bridge assumes the full WCRC reins, including what impact this may have on WCMSA determination turnaround times, which had greatly improved under PRI. How the new contractor will handle re-review requests and other challenges is also another important area to watch—especially in relation to CMS’ new Amended Review process, which provides parties with unprecedented opportunity to seek re-review of prior CMS approvals in certain situations.

Understand: The new Amended Review policy and to help you optimize the process and settle claims. how you can optimize this new process to settle claims.

Liability Medicare Set-Asides (LMSAs)

Where CMS plans to head next regarding LMSAs is another item to watch in 2018. Back in June 2016, CMS announced intentions to revisit MSAs for liability cases and indicated that it planned to hold a series of Town Hall calls to address the matter. In 2017, there were some indications that CMS was preparing internally for possible expansion of its MSA process. For example, one of the qualifying criteria for the WCRC included the contractor having the ability to handle MSAs for liability and no-fault claims in the event CMS elected to expand its process. CMS also issued certain internal change requests prepping its contractors on potential LMSAs and No-Fault Medicare Set-Asides (NFMSAs).

Despite these “behind the scenes” signs, to date, CMS has not set any Town Hall calls or issued any additional information, memoranda, guidance, and so forth to the industry regarding what it may be contemplating for LMSAs (and potentially NFMSAs). A key point to watch is exactly how CMS plans to do this. That is, will CMS use the formal rulemaking process to establish legal regulations in the Code of Federal Regulations (as they attempted in 2012–2014), or will it simply expand its MSA process through informal agency policy memoranda, and guidance?

See: A summary of a recent court decision on LMSAs.

Medicare Advantage Plans (MAPs)

What 2018 has in store regarding Medicare Advantage Plans (MAPs) is another area that warrants attention. MAPs continue to grow in popularity—with 19 million individuals (roughly 33% of total Medicare beneficiaries nationally) now covered under a private MAP.

At the claims level, the ongoing legal battle regarding the nature and extent of MAP lien rights continues. The big question here is whether MAPs enjoy private cause of action rights permitting them to seek double-damages against claims payers (and other parties) under 42 USC 1395y(b)(3)(A). Over the past few years, several federal courts have ruled that this statute does in fact apply to MAPs, thereby giving them double-damages rights. These jurisdictions include the Third Circuit (Delaware, New Jersey, Pennsylvania, and the U.S. Virgin Islands) and Eleventh Circuit (Alabama, Florida, and Georgia); as well as the Western District of Louisiana, the Eastern District of Texas, the Eastern District of Tennessee, and the Eastern District of Virginia.

In 2017, this growing list of double-damages jurisdictions held steady. However, the industry needs to stay vigilant in 2018 to see if other jurisdictions weigh in on the MAP/private cause of action issue. On this note, there are two cases pending in the Central District of California that may ultimately address this issue.

Medicare Part D (Rx Plans)

Another emerging compliance issue quietly inching up the charts involves Medicare Part D recovery. Part D is Medicare’s voluntary outpatient prescription drug benefit. Beneficiaries enrolled in traditional Medicare can purchase what is known as a “stand-alone” Part D plan, while MAP beneficiaries may purchase a plan as part of their coverage under their particular MAP program.

Initially, these plans were simply sending letters to claims payers asking them to confirm primary payer status, injury date, claimed injuries, and other claim-related information. However, over the past year or so, Part D providers have started to send letters asserting recovery rights and providing a breakdown of alleged payments for reimbursement. Similar to MAPs, the exact nature and extent of Part D lien rights may ultimately need to be fleshed out by the courts. In the meantime, claims payers should note this growing area and be prepared to address potential Part D recovery issues and claims.

Read: A more detailed overview of Medicare Part D.

ISO Claims Partners will be monitoring all these areas in 2018 and provide updates as warranted. Please do not hesitate to contact the author if you have any questions about MSP compliance trends.

This article is the feature of an in-depth Medicare trends report. To access the full report Medicare Today: Understand Upcoming Changes and the Impact on Claims click here.

Mark Popolizio, J.D.

Mark Popolizio, J.D., is vice president of MSP compliance, Casualty Solutions at Verisk. You can contact Mark at

Visualize Subscribe

Get the best of Visualize!

Get the latest news and insights straight to your inbox.

Subscribe now

You will soon be redirected to the 3E website. If the page has not redirected, please visit the 3E site here. Please visit our newsroom to learn more about this agreement: Verisk Announces Sale of 3E Business to New Mountain Capital.