Medicare Secondary Payer (MSP) compliance is a rapidly evolving area that has experienced significant changes in recent years, and 2019 looks to be no different. Policy changes, stricter regulations, new legislation, and emerging case law are making MSP compliance more complex and challenging than ever.
But staying on top of the key issues and updates makes it easier to navigate the changes. To help you sort through it all, here are the top 10 MSP trends to keep an eye on in 2019.
1. Stringent Legal Zero WCMSA Submission Requirements
Denied workers’ compensation claims that claims payers intend to resolve via compromise settlement are ripe for setting aside no funds toward future medicals [see 42 CFR 411.46(d)(1)]. When these claims meet review thresholds, the Workers’ Compensation Review Contractor (WCRC) has historically approved zero-dollar proposals without much requested documentation other than claims and indemnity pay histories reflecting no payments were made. But that’s changed recently.
The WCRC is requesting copies of treatment records for zero-dollar submissions. In the past, the WCRC rarely made this type of request. In some cases, these requests can be successfully protested, and there are recent examples of zero-dollar approvals following submission of medical records.
Claims payers should monitor whether the Centers for Medicare and Medicaid Services (CMS) and the WCRC will continue to move toward a more stringent review or formalize new policies around the zero-dollar proposal.
2. New Off-Label Prescription Drug Requirements in MSAs
Since taking over the WCRC, Capitol Bridge, LLC, has consistently required Lyrica to be included in Medicare Set-Asides (MSAs) where it was historically excluded as an off-label medication. CMS formally announced a policy change requiring Lyrica in MSAs in the January 2019 release of the Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide, v2.9. The basis for inclusion, per the WCMSA Reference Guide, is that “[t]here are many off-label indications that are listed in recognized compendia and peer-reviewed sources; thus, they would be covered under the Part D Benefit, and should also be included in a WCMSA” (see section 220.127.116.11).
Based on this rationale, submitters should keep a close eye on whether additional medications with off-label indications will be required in the future.
3. MSA Submission Alternatives
Primary payers can generally achieve complete compliance and cost containment through the formalized MSA submission process. However, there are circumstances where engaging in the traditional submission process results in unfairness and inequality.
At the claim level, CMS’s methodology may be unsound and unreasonable, resulting in a claim that cannot be settled. From a programmatic viewpoint, the risk tolerance of the parties may weigh against submission.
As a result, some claims payers have opted to explore alternatives to the traditional MSA submission process. In addition to forgoing submission, other features and elements are often used to guard against exposure and mitigate costs, including professional administration, insurance/indemnification provisions, and alternative allocation methodologies.
As CMS institutes inflexible and unreasonable allocation requirements, the industry’s appetite to explore alternative options to traditional MSA submission will likely increase.
4. Potential Rules for Liability Medicare Set-Asides
Since the inception of WCMSAs, there has been immense speculation and differing opinions within the industry on the applicability future medicals in the liability arena. Liability Medicare Set-Asides (LMSA) have been the perennial topic du jour in the MSP industry. Regardless of where a practitioner lands on the issue, for years CMS has intimated that settling parties should take Medicare’s interests into consideration in liability claims.
In the latter part of 2018, the Office of Information and Regulatory Affairs (OIRA) released a notice indicating that CMS plans to issue proposed rules regarding options to address future medicals in relation to liability, workers’ compensation, and no-fault claims. This notice further indicated that a notice of proposed rulemaking (NPRM) on this subject is targeted for release by September 2019.
While the released notice doesn’t provide any specifics the forthcoming proposed regulation is believed to be focused on LMSAs, and the industry is closely monitoring to determine if CMS will finally take steps to codify policy around future medicals in liability claims.
5. Movement toward Uniform Medicaid Recovery
Medicaid is an area ripe for more streamlined and uniform recovery. CMS cedes its authority for recovery to the individual states, and each respective jurisdiction handles recovery differently.
The 2013 Congressional Budget Act proposed reform in the way states could recover under the Medicaid program. It would have allowed states to recover the entire Medicaid lien amount versus a proportional share attributable to medical expenses. This federal mandate would have granted states to recovery similar to Medicare under MSP principles. Immediately, efforts were made to repeal this, and after several delays, the Budget Act of 2018 was passed which repealed it outright.
Two states, Rhode Island and Texas currently have instituted electronic reporting and lien identification mechanisms through the Medical Assistance Intercept System (MAIS). Several years ago, the National Conference of Insurance Legislators (NCOIL) proposed a model act relative to Medicaid Interception of Insurance Payments, but, there has been no recent legislative movement. Notably, California appears to be ramping up recovery efforts in workers’ compensation claims.
Uniformity could also be found in potential legislation in the Provide Accurate Information Directly Act (PAID Act), which would require CMS to return Medicaid eligibility information to primary payers. We’ll likely see more activity and interest in this area and its applicability and intersection with MSP principles.
6. Part C Recovery and Double Damage Rights Increase
Over the past four years, judicial decisions in varied jurisdictions have recognized a Private Cause of Action (PCA) right under the MSP, whereby a Part C/Medicare Advantage Plan entity can recover double damages to recoup conditional payments. These rights have increased the activity in Part C recovery against primary payers and have opened the door for litigants seeking to recover under the PCA. CMS provides Non-Group Health Plan (NGHP) Section 111 data to Part C plans, although the details and scope of this process remain unclear. However, this data exchange—along with court decisions—has bolstered Part C recovery.
Proposed legislation in the PAID Act would require CMS to return Part C enrollment data to Responsible Reporting Entities (RREs). This would then permit an RRE to investigate a potential Part C plan lien and take proactive measures to ensure that it’s properly addressed and resolved.
In 2019, we’ll likely see more court decisions addressing the reach of a Part C plan’s recovery rights and continued reforms in this area to level the playing field between primary payers and Part C plans.
7. Rise in Part D Recovery Efforts
Medicare Part D (prescription drug coverage) recovery certainly hasn’t seen the same attention as Part C recovery. But as with Part C, CMS provides Section 111 Non-Group Health Plan data to Part D providers. Collection and recovery have been sporadic, however.
Certain larger entities that make up the lion’s share of the Part D market have been at the forefront of initiating recovery activity against insurers. In October 2018, CMS added stronger language to its Prescription Drug Benefit Manual regarding Part D sponsors’ secondary payer rights, directing plans to ensure that adequate processes are in place to identify and effectuate recovery. Additional updates included provisions precluding plans for paying for prescriptions that should be paid under the MSP or from submitting those claims to CMS for payment.
These changes may usher in additional recovery efforts in 2019. As with Part C and Medicaid, potential legislation in the PAID Act would also require CMS to return identifying information on Part D plans so that primary payers could identify the existence of a claimant who receives Medicare prescription drug benefits.
Lastly, in 2019, look for the judicial waters to be tested to determine the extent of the Private Cause of Action (PCA) provision vis-à-vis Part D, as it has been established in certain jurisdictions with respect to Part C recovery.
8. Monitoring Performant’s Second Year as CRC Contractor
The Commercial Repayment Center (CRC) and the initiation of pre-settlement recovery against primary payers were two of the biggest changes to the MSP program since its inception. The first entity to hold the post, CGI Federal, struggled with a new process and Non-Group Health Plan (NGHP) recovery concepts under the MSP. Within two years, in October 2017, CGI Federal was replaced by Performant Corp., which still maintains the contract.
Performant inherited a significant backlog that it continues to work through. Improvements on turnaround times and general performance have been made; however, the CRC still needs to improve upon many things, such as accuracy of charges, the dispute/appeal process, the MSP Recovery Portal (MSPRP), obtaining refunds, integration with Section 111 data, incorrect referrals to the U.S. Department of the Treasury, and issue resolution, to name a few.
As the CRC continues to increase its recovery efforts, 2019 will be a critical year for the contractor and an area for industry stakeholders to monitor.
9. Treasury Collections Rise
Referrals of MSP debts to the U.S. Department of the Treasury increased in 2018. Many of them originated as mistaken or premature referrals from the CRC. Last year also brought much less involvement from the Private Collection Agents (PCAs), due to a contract dispute (which has since been resolved).
With the PCA referrals on hold, it appeared that there was also an increase in referrals to the Treasury Offset Program (TOP). When a debt is referred to the TOP, federal funds owed to an entity or individual can be intercepted in consideration of the MSP debt that is owed. This especially affects entities that are frequent recipients of federal grants and beneficiaries who rely on benefits such as Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), and the like. Last year, states also became involved in offsets through the State Reciprocal Program (SRP), where states can intercept funds owed for federal debts and vice versa.
Treasury collections, including the TOP, are effective means for CMS to recover delinquent MSP debts. But it’s critical that referral integrity exists and appropriate information is available to primary payers so that, where applicable, inappropriate collections can be contested and refunds can be obtained. CMS is mandated to refer delinquent MSP debts to Treasury, and it will be a developing issue in 2019 as recovery only increases.
10. Pending Section 111 Civil Money Penalty
Section 111 reporting and the associated civil money penalty for noncompliance are grounded in the MSP statute, but currently there is no regulatory mechanism outlining when it may be imposed. The SMART Act of 2013 revised the statutory language to make the penalty optional versus mandatory, and the SMART Act required CMS to solicit proposed regulations regarding when penalties may or may not be imposed.
In 2014, CMS initiated the rulemaking process by soliciting comments but took no further action until the fall of 2018, when the Office of Management and Budget (OMB) issued a notice indicating that CMS is planning to release proposed rules for public comment regarding civil money penalties. The industry will need to be on alert for the release of a formal proposal to comment and advocate for fair and reasonable rules around Section 111 civil money penalties.
Preparing for Changes Ahead
With all these changes and new requirements in the pipeline, it’s important to prepare properly to mitigate the impact of these issues. Despite the complexity and pace of change, achieving compliance and containing costs are possible.
ISO Claims Partners has expert MSA allocation services, holistic conditional payment compliance offerings, and Section 111 reporting that help clients save significant time and money. By combining medical and legal advocacy and analyzing claims individually, we help clients achieve full compliance and expedite settlements.