The Official Medicare Set Aside Blog And Information Resource

March 08, 2010 – MHAYES Surrenders

Medicare Set Aside Services — Tue, 09 Mar 2010 17:05:00 GMT

MHayes the field case management, telephonic case management, catastrophic case management, utilization management, life care planning, litigation support services, Spanish language services, interpretation and translation services, critical incident and stress debriefing company (that’s a mouthful) is no longer MHayes the Medicare Set-Aside company.

Citing the growing “complexity and unpredictability” of the MSA practice, management has decided to focus on their core business(es) above. I admire their decision. It isn’t easy admitting you made a wrong turn and taking the painful steps to get back on track.

I must admit that I am a bit surprised. It was just 45 days ago where they were declaring victory over CMS with respect to accepting off-label drug utilization arguments in MSAs. Their email/press release gushed about how they saved their clients $141,736! (their exclamation point not mine). Said press release has since been removed from their site and all evidence of their MSA practiced erased. Melinda “The M in MHayes” Hayes clearly deep sixed that product line and ordered the historical record expunged.

But in the interest of nostalgia, let’s take a trip down memory lane and revisit the marketing email.

M Hayes Prevails with CMS over Off-Label Drug Use

Hunt Valley, MD - January 20, 2010 - We recently obtained a reversal from CMS on a case where they had initially added three very costly prescription drugs to the MSA, despite our detailed explanation that the law and their own Manual dictated otherwise. In short, what this win means is that certain expensive and inappropriate drugs such as Lidocaine patch, Fentora/Actiq, Lyrica and, in some instances, Neurontin and even Celebrex, can be kept out of the MSA when it can be shown that they are not being used for a "medically accepted indication" and are therefore not covered Part D drugs. Only items covered by Medicare and related to the work injury must be in the MSA - either alone is not enough.

As many of you know, CMS took over review of the Prescription Drug Component (PDC) of MSA's on June 1, 2009. Prior to that, it was to some extent "anything goes" and some dubious practices were applied by a few to reduce the PDC as much as possible. We maintained all along that when it came to "off label" (non-FDA approved) use, Federal law is clear that additional analysis is mandatory and, without that analysis, one cannot state the drug is not a covered Part D drug. That analysis requires reference to three prescription drug reference guides (compendia). Even before June 1, 2009, we were consulting those compendia and jumping through all the hoops required by law to assure that your MSA was solidly based and defensible in the long run, even though that approach seemed to be rare.

After June 1, 2009, we were surprised to find CMS including drugs that failed this test for Part D coverage. Worse, CMS' own memo of June 1, 2009 stated:

"Off-label use: Off-label use of medications in the United States is both legal and common. Once a drug has been approved for sale by the Food and Drug Administration ("FDA") for one purpose, physicians are free to prescribe it for any other purpose that in their professional judgment is both safe and effective. Physicians are not limited to prescribing a drug only for official, FDA-approved indications."[1]

While it is true that physicians may prescribe a drug for off-label use, that does not mean it automatically becomes a covered Part D drug. CMS may change and even ignore its own memos, but it cannot disregard Federal law. Moreover, its own Part D Precription Drug Manual contains the correct test, although it was being ignored. With the backing of several of our clients, we continued to remove the drugs in question and challenge CMS on this issue. As each MSA would come back wrongfully including a non-covered drug or drugs, we filed a written Request for Reconsideration with the CMS Regional Office. Last week we received the first of these back where CMS changed its decision and accepted our argument. As a result Lidoderm, Celebrex and Lyrica were taken back out of the MSA reducing the original CMS approved amount by $141,436!

We have other Requests for Reconsideration on file with CMS and several other cases pending with this issue - we believe that we should prevail on all of these although due to the fact they are in several CMS regions it may take some additional persuasion. if you would like more information about this issue or we can assist you in any other way with your MSA needs, please do not hesitate to contact me or any of our MSA team members.

William R. Van Wambeke, General Counsel

voice: 410.628.4050 ext. 1132

fax: 866.724.9650

mobile: 443.618.7206

[1] CMS' Prescription Drug Set-Aside Guidance for Submitters

This communication may contain information that is privileged and confidential as attorney/client communication or attorney work product, or is otherwise legally protected. It is not intended as legal advice to any recipient who is not an officer or employee of M Hayes and should be evaluated by such recipient's legal counsel before any action is taken hereon.

Interesting argument and a close variant of one we have been making for the better part of a decade on behalf of clients. Problem is that CMS doesn’t buy it in their independent review process.

The argument to be made isn’t that a prescription is automatically excluded because it is used off-label. Van Wambeke correctly points out that a listing in one of the compedia is all it takes to legally prescribe an FDA approved drug for off-label purposes. The argument is that a specific drug regimen would not meet the standards for Part D coverage. I can guarantee you that the average Medicare Part D plan is not as generous as the average states workers’ compensation law. Rules for Part D coverage are complex and vary from plan to plan. In a Part D formulary, certain classes of drugs must be offered as part of the plan, while others are severely limited. I wonder how many part D plans allow unlimited use of Actiq for back pain?

I question the wisdom of sending a blast email trumpeting a victory on a single case. Getting something changed with CMS is as much a matter of catching someone on the right day in the right frame of mind then any type of rational argument or skill on the part of the requester. I suspect this situation proved the exception and not the rule since I haven’t seen any mention of the other cases they reference above and how they ultimately turned out. A better strategy would be to count your good fortune, high five the person in the next office and quietly steal away into the night before said CMS employee changed their mind (even better would be to resolve the Rx issues in the record prior to submitting to CMS or forego the approval process altogether on claims where there is a viable defense supporting the exclusion of certain drugs).

Nonetheless, Mhayes is a good company with a good reputation among its clients with respect to its other services. Others should take note that the MSA business is a lot more complicated than it looks from the outside. Kudos to MHayes for recognizing this fact and not exposing their customers to adverse outcomes for the sake of making a few extra bucks. I can think of quite a few others that should follow their lead.

WCRC Contract out to bid

Medicare Set Aside Services — Thu, 04 Mar 2010 15:27:00 GMT

R -- Workers' Compensation Review Contractor (WCRC) Recompete - Competitive 8(a) project - Addendum#2- Q&A's from RFI - Addendum#1-Draft SOW

Notice Date

2/26/2010

Notice Type

Presolicitation

NAICS

524298 — All Other Insurance Related Activities

Contracting Office

Department of Health and Human Services, Centers for Medicare & Medicaid Services, Office of Acquisition and Grants Management, 7500 Security Blvd., C2-21-15, Baltimore, Maryland, 21244-1850

ZIP Code

21244-1850

Solicitation Number

CMS-2010-8A-0005

Archive Date

3/15/2010

Point of Contact

Alan F Fredericks, Phone: 410-786-8622, Mark W Werder, Phone: 410-786-7839

E-Mail Address

Alan.Fredericks@cms.hhs.gov, mark.werder@cms.hhs.gov
(Alan.Fredericks@cms.hhs.gov, mark.werder@cms.hhs.gov)

Small Business Set-Aside

Competitive 8(a)

Web Link

FBO.gov Permalink
(https://www.fbo.gov/spg/HHS/HCFA/AGG/CMS-2010-8A-0005/listing.html)

Place of Performance

Address: Contractor Facility, United States

Record

SN02077775-W 20100228/100226235456-73ab5182f16eccc8ff555b5f64f0e4aa (fbodaily.com)

Source

FedBizOpps Link to This Notice
(may not be valid after Archive Date)

MEDVAL Comments: Finally, CMS has put the WCRC contract out to bid, two years after the original contract was supposed to expire. The solicitation gives some insight as to the flaws in the current program. Consider this excerpt

“The WCRC shall, IAW CMS guidelines, and acting as an impartial entity, evaluate workers' compensation Medicare set-aside arrangement (WCMSA) proposals, and independently project the future medical costs, including prescription drugs, related to the workers' compensation (WC) injury, illness, or disease, that would be otherwise reimbursable by Medicare. The WCRC will utilize, and work within, the CMS-developed and owned Workers' Comp Case Control System (WCCCS), an electronic distributed case & correspondence database system, on a distributed basis from the New York City host server; as well as the RedBook prescription pricing tool. CMS will provide internet interface for the contractor's use. The contractor shall, upon reviewing each complete WCMSA proposal(case), recommend the WCMSA dollar amount for each proposal, and which is subsequently reviewed and approved/rejected by CMS final determination. For staffing and other resource considerations, the contractor shall anticipate receiving and completing, 2000 - 2500 WCMSA proposals per month”

Look, there is no way to review upwards of 30,000 cases with the money CMS is willing to spend on this process. That is why the WCRC review program is full of mistakes, inaccuracies and just plain misinterpretation of the records. But if you read the statement of work contained in this solicitation, just look what CMS is demanding! The standards are impossible to meet within the expected budget constraints. This contract should cost $15,000,000 or more per year to effectively administer. I doubt the winning bidder will get 1/3 of that amount.

So since I have the #1 blog in the country regarding Medicare Set-Asides (out of 2 total), I am going to tell CMS what they SHOULD be asking for instead of what we ARE ultimately going to get.

1. Spend the money certifying firms and individuals to provide MSA services. Decide what qualifications are acceptable, develop uniform protocols, provide uniform training and certify interested parties.

2. Once certified, allow MSAs prepared by these firms to be reviewed and approved in a streamlined fashion. Do not waste time duplicating efforts (mostly by reading hundreds of pages of medical records that are already succinctly summarized and re-pricing medical services/Rx with outdated fee schedules and NDC numbers) and second guessing minor details. Push these approvals through in 14 days.

3. To keep the certified vendors honest, set up an audit team that will review one out of 20 MSAs submitted to make sure there are no shortcuts or deviations from CLEARLY ESTABLISHED protocols taken. If a firm is found to be in violation, revoke their certification after some due process. Generally I think the industry follows CMS protocols better than the WCRC does as it is.

4. With a portion of the contract, set up an appeals process to handle complicated cases that deviate from the norm. Abandon the one size fits all approach currently employed and take the time to review and understand matters that have additional issues in play. Also, allow this group to handle “advocacy files” where an argument needs to be made because the normal protocols do not fit the fact pattern of a particular case. This would allow more skilled vendors and attorneys to be more than a convenient conduit for CMS approvals and command higher fees for better results.

5. Open a dialog with industry stakeholders to constantly improve the process and service. The result will be a happier industry, less burdened CMS employees, better MSP compliance, a lower cost/better quality WCRC contract, less litigation, better protected claimants and a program that us not pilloried at every opportunity.

There it is. Anyone have anything to add?

Ryan Roth

MSA Vendor v. Attorney – Round One

Medicare Set Aside Services — Wed, 03 Mar 2010 18:30:00 GMT

Yesterday, a question was posed on the NAMSAP listserv inquiring as to whether RN licensure was necessary to prepare Medicare Set-Aside Arrangements in a given jurisdiction. While most of us were content to ignore this rather uninformed question, the President of the nations largest MSA vendor felt the need to weigh in as follows:

“CMS has absolutely no requirements with respect to who prepares an allocation. Anyone can sit down, write a report, and submit it to CMS. Doesn't mean it is right, will get approved, or even remotely addresses the needs of the elderly and disabled person in question. It is highly improbable that the allocation properly addresses any of the medical, pharmaceutical, legal, coding issues, and claims facts specific to the case. You can be certain that the allocation is either way high or way low, totally indefensible and inaccurate based on the claim. We see this all the time when we take over a submitted case from some firm who had their paralegal work up the MSA projection. The insurer spends about $4000-$7000 in hourly attorney fees (depending on how long they've been working it with CMS) to get a CMS rejection that the firm can't defend or change and now the settlement is in jeopardy of falling apart.

In the end when adjusters choose unqualified and inexperienced individuals to prepare their allocations, they open themselves to serious ramifications in the settlement process. They risk blowing the entire settlement when it doesn't work out as expected with the CMS determination and the funding isn't there to consummate settlement or the allocation is to high to permit a settlement discussion at all. Insurers have been and continue to do their diligence on potential MSA vendors. Unfortunately several firms are hiding these costs in the legal fees to get around insurer vendor panels and many adjusters ignore these panels to pass business along to a friend or colleague. Thankfully with Mandatory Insurer Reporting, every settlement with a Medicare beneficiary will be known by management and these off-panel practices will be obvious in the future.

To answer the question, CMS has no standard so the insurance industry must establish them and monitor that they are being met”.

Ouch….Looks like he just called out every attorney firm that prepares MSAs as part of their practice. To which one of the NAMSAP member attorneys responded

“It is interesting bc from a lawyer's perspective, I am always concerned with and seeing indefensible and inaccurate MSAs from non-attorney "vendors," who advertise $2500 MSA's but once all that needs to be done for Medicare compliance on a particular file is completed, it ends up costing $7500 or more. Or, on the other hand, those "other matters" (which are crucial) like conditional payment inquiries or "lien" negotiations (which necessarily must involve legal arguments and legal opinions), just never get addressed, which is even worse…”

So who is right in this war of words? Well our vendor should consider that it was his company’s billing practices, questionable work product and indifferent service that spawned so many competitors. After all, you can’t install your disbarred lawyer family member as your “director of compliance” and be taken seriously by anyone. Their only hope of continued survival is to cling to insurance panels and hope that their tying of MMSEA reporting to MSA referrals stems the outflow of clients looking for a better, cheaper and more competent solution.

One the other hand, he is right that many of the companies that have hung a shingle in the last several years are grossly incompetent and learning on their client’s nickel (one needs only to look at 80% of the questions posted on the NAMSAP listserv for confirmation of this fact). Getting an MSA completed, submitted to CMS and conditional payments resolved should probably cost somewhere between $2,000 and $3,000 for most cases if handled by a competent firm. Paying a defense lawyer $350 per hour to learn on the job (who will probably get it wrong in the end) is a pretty poor strategy. And I have seen adjusters circumvent their approved panels to direct business to friends just as our vendor friend suggests. Considering the high stakes involved in getting the MSA process wrong, this practice is indefensible.

That being said, there is a place for all types of providers in the industry. It really depends on the specific clients needs as to who should be used. I do not think a one size fits all model works in every situation. The assembly line approach works for the big-box companies serving big-box insurers. The sole practioner (whether a nurse or attorney) is a good fit for smaller clients that want a more personalized, claim/jurisdiction specific solution. Generally this comes with a more hands on relationship that flourishes in a lower volume environment. Companies of our size can service larger accounts but still maintain the personal nature of the business and focus on individual case results. So if you have an extra 5,000 cases you need MSAs prepared for this year, go to a big-box company. If you have 1,000 or less come to MEDVAL. If you have 50 or 5, call a smaller regional company or sole practioner.

The only constant regardless of who you use is to look for competent people with sufficient experience. There really is no substitute in this business for seeing a lot of cases consistently. Avoid the “we do everything” vendors that moonlight in MSAs or think that just because they have an MSCC they are qualified to handle claims. Price, as noted above, constitutes the appropriate range of what the market should be paying right now. If you are buying your MSAs from a low cost vendor, you are most certainly getting what you pay for. If buying from someone priced higher, you are paying for someone to bring donuts by the office and a private equity firm’s ROI and not any additional level of skill or expertise.

Using the above criteria, it is possible to find that right fit and have strong win/win relationship over the long term.

MMSEA Section 111 Reporting - Postponed

Medicare Set Aside Services — Thu, 18 Feb 2010 15:07:00 GMT

From CMS website

February 16, 2010

CMS advises all NGHP RREs that the date for first production NGHP Input Files is changed from April 1, 2010 to January 1, 2011, effective immediately.

NGHP File data exchange testing will continue. All NGHP RREs should now be registered with the COBC, and either in or preparing for file testing status. NGHP file data exchange testing may continue during 2010, as needed.
All NGHP file data exchange testing will be completed by December 31, 2010. NGHP RREs that have completed file data exchange testing at any time are encouraged to proceed to production file data exchange status.

During the week of February 22, on this Website CMS will post the next version of the "Section 111 NGHP User Guide" and a number of Alerts relating to particular NGHP policy issues.

Also during the week of February 22, on this Website CMS will post an alert for NGHP RREs describing the steps those RREs can take to assure their ongoing compliance with the Section 111 reporting requirements.

MEDVAL Comments: This news comes as no surprise given the technical difficulties clients have been facing during the initial testing and production phases. I think CMS may have bitten off a little more than they can chew given the magnitude of the RRE universe and the complexity of gathering required fields. With so many unresolved issues and no guidance forth coming from CMS, the only logical step was to postpone live reporting. This should give the industry more time to decide how to best comply with the requirement and give clients more time to consider their reporting agency relationships.

MEDVAL recommends ISO Claim Search as a reporting agent for those clients that do not develop an internal capability.

Coventry Priority Services goes extinct

Medicare Set Aside Services — Wed, 17 Feb 2010 15:32:00 GMT

Industry sources indicate that the once ferocious and feared competitor Coventry Priority Services has succumbed to natural selection and as of February 2010 has all but disappeared from the Medicare Set-Aside landscape. Reports indicate that they have laid off all but seven of their employees from Woodland Hills, CA and Scottsdale, AZ and will be referring any new cases to Crowe Paradis in exchange for CPSC’s agreement to refer Drug Utilization review files.

February 17, 2010 – Coventry Priority Services is added to the fossil record of MSA companies.

PS, Former Coventry employees with medical and/or legal backgrounds please apply to careers@medval.com .

CMS Wins Again

Medicare Set Aside Services — Tue, 16 Feb 2010 20:47:00 GMT

Hi Jen,

I have been preparing and submitting MSA proposals to CMS for about 6 very long years. I believe CMS has finally beaten me down to the point that I have given up. However, I still must deal with a recent fiasco. I recently submitted a proposal, idiotically assuming that the actual retail price at the pharmacy actually used by the claimant would be more conservative than the average wholesale price under the Red Book. When the set-aside came back dramatically higher, I reviewed the NDC codes and the price suggested by CMS.

I learned that the drug in question, 10mg of Ramipril, has 28 different NDC codes, with prices ranging from $.26 per pill to $5.36 per pill. I suppose I should be pleased that CMS came back with a price of $1.89 per pill on this case -- but only $.33 per pill on another case I had -- even though the claimants in both cases had previously obtained Ramipril prescriptions under multiple NDC codes, including the $.33 per pill code.

How do you handle this random act of violence???

Thanks for your help and your excellent blog.

Attorney in FL

______________________________________________________________________
Jen Responds:

Dear Attorney in FL:

That would be a funny story if it didn't have such a tragic ending. Here is what we would do:

1. Not submit to CMS in the first place. Is the cost really worth the benefit?

2. If submitted and countered ask for a reconsideration by the regional office (good chance of that happening on this type of case)

3. If denied contact MSP central and ask for reconsideration

4. If denied, appeal to the Office of the General Counsel

5. If denied, sue in Federal Court

Let us know if you need help with Option 5. We are looking for motivated clients with damages to challenge CMS and their arbitrary acts. Sorry to hear of your misfortune. Hopefully your story will help other readers of our blog.

Social Security Benefits

Medicare Set Aside Services — Mon, 08 Feb 2010 15:48:00 GMT

We have recently been working on a block of workers' compensation claims involving indemnity payments to spouses of deceased workers. While trying to design workable settlement options, Social Security survivor benefits have come into focus as an important part of the plan. The following are general eligibility criteria.

•         A widow or widower may receive full benefits at full retirement age or partial benefits as early as age 60.
•         A disabled widow or widower – as early as age 50 (pursuant to Social Security’s definition of disability).
•         A widow or widower at any age if he or she is caretaker of the deceased’s child who is under age 16 or disabled, and receiving Social Security benefits.
•         Unmarried children under age 18 or up to age 19 if they are attending high school full time. There are some circumstances in which step-children, grandchildren, or adopted children can also become eligible for benefits.
•         Children at any age who were disabled before age 22 and remain disabled (per Social Security’s definition of disability).
•         Dependent parents age 62 or over.
•         Divorced spouses: If a divorced spouse dies, the surviving spouse can receive benefits if the marriage lasted at least 10 years and the surviving spouse is age 60 (unless disabled, then can become eligible as early as age 50). However, if remarriage occurs, there are special considerations that apply.

There is a maximum family benefit that applies in these cases. There is some variation in the calculations, but the maximum is usually between 150% and 180% of the deceased’s benefit amount.

Proper Social Security Benefits planning can be crucial to settling dependency claims and often makes the difference when figuring out what a surviving spouse will need as part of a settlement to maintain or improve his/her financial situation.

The SSDI Offset Game

Medicare Set Aside Services — Thu, 28 Jan 2010 20:51:00 GMT

Frequently we are involved in claims where claimants spend an inordinate amount of time trying to "maximize" their settlement through creative accounting. As you are likely aware, claimants may not receive more than 80% of their pre-disability income through a combination of workers' compensation and Social Security disability. Unless a reverse offset state, settlement proceeds are prorated over the claimant's life expectancy and the monthly amount used to reduce the SSDI benefit. While methodologies for calculating the off-set are laid out in the SSA's POMS the number that feeds those calculations can be detailed in the workers' compensation settlement documents and for the most part, will be taken at face value by the SSA. How the number is calculated can be very creative. The life expectancy table selected alone can push the life expectancy 2 to 5 years out on the basis of race and gender.

On January 25, 2010, the South Carolina Supreme Court upheld a circuit court decision that the state's workers' compensation commission lacked the authority to force the insurer to stipulate in the settlement agreement the prorated calculation desired by the claimant. Claimant felt that the SC WCC possessed the power to order the language and frequently did and therefore should in her case. However the state courts concurred with the commission that it lacked the authority to force the insurer to include the language. The reasons for the insurers steadfast refusal to include the language were not provided. Perhaps insurers in general are tired of watching claimants game the system and just decided not to participate.

Opinion available here

Comment: I have no problem with someone getting every dollar they are entitled to from our friends at the SSA and Medicare. As a taxpayer, I would like to see those entitlements pared back some. But if available, they sometimes make the difference between settling a case and leaving it open.

Ask Jen

Medicare Set Aside Services — Thu, 21 Jan 2010 22:20:00 GMT

Attorney:

My client has a workers’ compensation MSA. She has now been forced into bankruptcy. She thinks she has been told by the bankruptcy attorneys that the creditors can deplete her MSA trust account. What if any, protection does an MSA have against non medical creditors?

Jen Answers:

MSAs are generally not protected funds even within federal entitlement programs also overseen by CMS (such as Medicaid). As you can guess CMS has given little consideration to the impact of MSAs on anyone or anything other than Medicare. I'm no bankruptcy expert but apparently only WC indemnity benefits are exempt under 11 USC 522(d)(10)(C), however debtor has a right to exempt property not in excess of $18,450 traceable to personal bodily injury compensation under 522(d)(11)(D)&(E). The MSA is arguably outside the scope of the 522(d)(10)(C) exemption since not technically representative of lost future earnings given the medical intend of the funds. Subsection (d)(11) is typically not applicable to WC awards, intended for use in tort claims, however judicial interpretation seems to also not see anything in the language that prohibits its use in WC related claims. Again, not a subject that I have researched extensively, but I would point you to In re Sanchez (362 BR 342 - Jan. 31, 2007). If that matter eventually reached a resolution of the disputed issues, your answer may be found there.

Do I have to deal with the MSP?

Medicare Set Aside Services — Thu, 14 Jan 2010 01:51:00 GMT

Question:

I have heard that an RRE is not required to report certain liability claims if they have a certain date of loss. What does that mean? I have several occupational exposure claims I am working on and am not sure how the MSP applies.

Answer:

I believe you are referring to claims that pre date the enactment of the Medicare Secondary Payer Act (MSP).
RREs generally are not required to report liability insurance (including self-insurance) or no-fault insurance settlements, judgments, awards or other payments where the date of incident (DOI) as defined by CMS was prior to December 5, 1980. (See exception in discussion below of cases involving “exposure.”)

For claims involving “exposure”, this means that there was no exposure on or after December 5, 1980, alleged, established, and/or released. If any exposure for December 5, 1980 or a subsequent date was claimed and/or released, then Medicare has a potential recovery claim and the RRE must report for Section 111 purposes. For example, if the date of 1^stexposure is prior to December 5, 1980, but that exposure continues on or after December 5, 1980; Medicare has a potential recovery claim.

MMSEA Reporting Question

Medicare Set Aside Services — Mon, 11 Jan 2010 19:45:00 GMT

Question:

I am reading the CMS townhall transcripts are am a little confused. Are they saying we need to report all WC claims that involve a Medicare beneficiary? I heard $600 was the threshold?

Answer:

This question is actually a little tricky. Through 12/31/2011, WC TPOCs (settlements) of $0 - $5K are exempt from reporting; however, RREs are not required to adhere to the thresholds if the RRE also has ongoing responsibility for medicals (ORM). Many are saying that if there is ORM, then it's easier for them to go ahead and report all TPOCs despite the thresholds as a matter of course. Basically, it's one less variable to consider so that is what makes reporting everything easier. As long as there is ORM, reporting TPOCs of all amounts is acceptable.

I think you are thinking of where the threshold eventually ends up down the road - $0-$600 is the threshold for exemption from 1/1/13 - 12/31/13. Section 11.4 of the User Guide lays it out, but honestly, I refer to it every time there is a question. It's not an easy read.

The most typical course for a WC claim is going to be

1) RRE submits an Add Record - reporting ORM

2) RRE submits an Update Record - reporting ORM termination + TPOC

If a denied claim and ORM is never accepted, but they settle, then there would just be one Add Record and thresholds would apply. The threshold amount now is $5K, but slowly decreases until 1/1/14 when thresholds no longer apply and all TPOCs must be reported.

I hope that helps/answers the question...

Predictions for 2010

Medicare Set Aside Services — Fri, 08 Jan 2010 04:14:00 GMT

In the tradition of Joe Paduda and his excellent weblog (www.joepaduda.com), MEDVAL would like to make its own predictions as it relates to the Medicare Set Aside market in 2010.

1. Ringler Associates, the structured settlement firm, will try their hand at MSAs by hiring David Hays from Xchanging and cost their clients millions while they learn on the job.

2. Chartis will replace their current MMSEA reporting agent with ISO because the solution initially sold to them will not work as advertised.

3. Protocols will spend another $100,000 suing CMS and nothing will change. (But kudos for fighting the good fight)

4. HIG Capital will not find a buyer for PMSI as their turnaround strategy fails to take hold and clients realize WC PBM's have never lived up to their promise. Their iPhone app will be used by double the number of people as in 2009 which will be four.

5. Crowe Paradis will be this blog's #1 MSA industry reader exceeding their 228 visits in 2009. They will also change their incorrect marketing and no longer claim to be "the only national MSA firm to use both a nurse and attorney on every file" when they realize MEDVAL has been doing exactly that three years before they were founded.

6. Coventry will settle at least one lawsuit brought under their guaranteed MSA program of yesteryear.

7. An MMSEA reporting agent will not report an eligible claim(s) and their client will pay a $1,000 per day penalty.

8. One CMS official will officially acknowledge that MSAs are appropriate for liability claims.

9. Another CMS official will officially deny that MSAs are appropriate for liability claims.

10. Gould and Lamb will add new clients faster than they lose their old ones.

We will revisit these predictions at the end of the year and see just how much comes to fruition.

Welcome to 2010

Medicare Set Aside Services — Sun, 03 Jan 2010 03:28:00 GMT

2010 will bring some changes to The Official Medicare Set-Aside Blog and Information Resource. Expect more provocative industry commentary, a greater emphasis on liability claims, weekly feature columns by our attorneys and clinicians and a whole new look and feel.

Our goal is to prepare one new post per day so check back often and feel free to contribute your own content by commenting on a post or emailing us items of interest. Our full blog schedule will begin next week so check back often.

MEDVAL 1-888-SET-ASIDE

Medicare Set-Aside Allocation/Arrangement Recommendations

Submissions to Centers for Medicare and Medicaid Services

Post-Settlement Administration

Liability MSA

Interesting call

Medicare Set Aside Services — Mon, 07 Dec 2009 21:05:00 GMT

We received a call today from the claimant in New Jersey that has a settlement hearing tomorrow. After going through the usual "are you represented" and "who is the insurer/tpa" questions to avoid stepping on any toes, he launched into the saga that is his workers' comp claim.

The long and short of it is that he has a CMS approval letter from 2007 approving $18,000 for the MSA. However, he is currently taking $15,000 PER MONTH in Medicare covered Rx which according to him is the full responsibility of his prior employer and the TPA.

The TPA is representing that the 18k MSA that was approved more than two years ago fully protects Medicare's interest under the theory that MSA approvals never expire. The claimant is very hesitant to settle his case because he will spend the 18k in exactly 40 days instead of the 18.9 years it is projected to last. He wisely concluded that even if Medicare was to pay his claim under Part D, there would be substantial out of pocket funds required to fill his Rx going forward. (of course his settlement may be for 2MM and that isn't an issue. Not enough information to draw a conclusion here).

So the question is, did the TPA adequately protect Medicare's interest by relying on a two year old MSA that was approved by CMS or do they have a duty to add additional funds to the MSA since they have knowledge that the amount is completely inadequate? What liability does the employer, TPA and claimant have under this scenario?

What would you do if you were the adjuster, attorney or TPA? Comments welcomed.

MEDVAL 1-888-SET-ASIDE

Medicare Set-Aside Allocation/Arrangement Recommendations

Submissions to Centers for Medicare and Medicaid Services

Post-Settlement Administration

Pharmacy Benefit Management

THE COST OF DYING

Medicare Set Aside Services — Wed, 25 Nov 2009 19:34:00 GMT

Sixty Minutes aired an excellent special last night dealing with the difficult issue of end of life treatment costs. As Congress debates health care and the future of Medicare, this is an important ethical component to debate.

http://www.cbsnews.com/video/watch/?id=5737138n&tag=api

While we deal primarily with issues concerning the Medicare Secondary Payer Act and CMS' efforts to enforce the law, it seems like a tiny sliver of the pie when you examine the staggering end of life costs paid by Medicare. Last year it was estimated that Medicare paid $50 billion for expenses incurred for beneficiaries during the last two months of life.

The white elephant in the room is right in front of us yet there is precious little leadership willing to take on the issue. Medicare can have a blank check policy or fiscal solvency. I don't see how it can have both.

CMS is going to have to hustle down a lot of $50,000 workers' compensation settlements to balance that checkbook.

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Trapped for 23 years

Medicare Set Aside Services — Mon, 23 Nov 2009 18:01:00 GMT

How much would you award this person if you were on the jury during his Medical Malpractice trial?

http://www.guardian.co.uk/world/2009/nov/23/man-trapped-coma-23-years

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Need a job? PMSI is hiring!

Medicare Set Aside Services — Fri, 20 Nov 2009 20:17:00 GMT

And the best part is you do not need to be terribly qualified. You just need to have a GED, two years of work experience and only make mistakes in 20% of your cases (what else could 80% accuracy mean?).

HIG Capital has reportedly been spending some serious capital upgrading the badly floundering PMSI. But clearly they are not at all interested in investing in the human capital required to produce a top notch Medicare Set-Aside product.

For a company that has been in the MSA business for a pretty long time, it is hard to believe they still don't get it. Read their job description and then compare it to MEDVAL’s newest “MSA Specialist I”.

Description

MSA Specialist I:

Responsible for the production of Medicare Set Aside Allocations.

Basic Functions:

Reviews and analyzes medical records and Medicare payout information to determine an appropriate Medicare Set Aside (MSA) Allocation for recommendation to clients.
Conducts research on Medicare expenses allowed in appropriate state for workers’ compensation and keeps abreast of all changes in law and Centers for Medicare/Medicaid Services guidelines.
According to PMSI MSA Services guidelines, writes the MSA report, calculates financial grid for injury- and non-injury-related medical expenses and coordinates with PMSI for related pharmaceutical costs.
Works with claim adjusters to obtain clarification on outstanding issues for MSA.
Works with claim adjusters and attorneys in negotiating and defending recommended allocations as necessary.
Works with Case Management Specialists in coordinating daily work deadlines per PMSI MSA Services’ production standards.
Maintains level of 80 percent accuracy in monthly quality control evaluation.
According to PMSI MSA Services guidelines, maintains a minimum production level of 25 Medicare Set-Aside allocations per month.

Requirements

Job Qualifications:

Education:

Required: High School Education
Desired: Bachelor’s Degree in Business Administration or Insurance, Bachelor’s of Science or equivalent experience

Work Experience:

Required: Minimum of two years workers’ compensation or liability claims experience or RN with case management and workers’ compensation or liability claims experience.

Licenses/Certifications:

Desired: RN, CLCP, MSCC

***Please apply via our website:www.pmsionline.com***

MEDVAL’s newest team member:

MARILYN J. LARRIMER, JD/RN

Practicing Attorney, Civil Litigation (21 years)
Licensed Registered Nurse (21 years)
Captain, United States Army Reserve (8 years)

BSN Nursing – University of Pittsburgh

Juris Doctor – Duquesne University

Who would you rather have doing your MSAs?

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To submit or not to submit

Medicare Set Aside Services — Tue, 17 Nov 2009 16:05:00 GMT

Question by an attorney looking to do the right thing for her client:

This is a workers’ compensation claim involving full and final settlement for future medicals. The MSA was prepared March 25, 2009. Settlement documents were completed and approved by the judge in October 2009. Because the MSA was done prior to CMS’ June 2009 revamping of prescription costs, donut hole, co-pays, etc., the MSA proposal would need to be increased to bring it in line with the changes.

The recommendation by my clients’ third-party vendor is to not submit the Settlement Agreement with MSA proposal to CMS for formal approval. Their recommendation seems to be to make no changes to the MSA we already have. The theory is that the purpose of the Medicare Secondary Payer Act is to ensure that Medicare’s interests are considered and adequately protected when there is a settlement closing future medicals. There is no specific requirement stating that CMS approval is mandatory.

I appreciate there has never been a formal statutory requirement that parties to a workers’ compensation claim with MSAs for future medicals submit the proposals to CMS and gain formal approval. However, my personal belief has been that the submission to CMS with the resulting letter from CMS approving the proposed MSA has provided at least some extra level of protection to my clients in case there is ever a question (or assertion) as to whether the MSA was properly funded.

I think regardless as to whether we ultimately submit the settlement with proposed MSA to CMS, at a minimum we would need to have the MSA revised and funded to account for the changes that became effective this past summer. I am not sure how comfortable I am with the “let sleeping dogs lie” approach being recommended by the vendor.

MEDVAL answers:

For the record, we are not the vendor in question but would probably agree with their recommendations depending on the specifics of the case.

This attorney is correct that there is no formal statutory requirement to submit an MSA to CMS for approval (nor a requirement to do an MSA at all for that matter). She is also correct in her analysis that seeking CMS approval provides a benefit to her client, presumably the insurer. Namely, CMS has indicated that if the parties go through the formal WCMSA review process, CMS will probably not come knocking on anyone's door in the future looking for reimbursement in the event the claimant eventually taps Medicare for treatment of a work related injury.

But it also has an associated cost. Sometimes a MASSIVE cost.

For example, we recently had a case where an MSA was prepared 18 months ago and the Insurer settled based on the amount at the time (around $130,000). When updating the MSA to new CMS protocols, the cost ballooned to over $500,000. Not because the treatment changed, not because we used some sort of loophole to artificially reduce the MSA (more on that subject later) but solely because of AWP and the idea the CMS will look to the claimant's current medication regimen as a reliable predictor of future utilization.

No one involved in the claim has any doubt that $130,000 is more than adequate to make sure this claimant never seeks Medicare coverage for her work related injury. Her exact drug regimen can be purchased for 60% less than the AWP pricing used by CMS. So the question becomes, is the CMS approval worth $370,000 extra dollars? Are the real and imagined risks of CMS "coming after" the insurer worth paying $370,000 today for an injury that will likely never consume the $130,000 originally set-aside?

I don't know. That is a risk management decision for the client to make. If you want my opinion, as long as the MSA was based on a rational, logical and reasonable course of future treatment, then CMS has an almost insurmountable burden of trying to prove that the insurer did not meet their obligations under the MSP. If the claim is worth $130,000 for future medicals than that is what should be set-aside. No more and no less.

I think it would be appropriate to look at what the new review protocols would cost relative to the actual value of the case and the amount that would reasonably protect Medicare's interests. If it is in an acceptable dollar range and the client feels the review process provides a benefit, then by all means submit the case. If the MSA was calculated using some dubious method (like deducting the donut hole or using Medicare co-pays which in my opinion was a massive fraud perpetrated upon the insurance industry and genuinely injured workers to increase market share and profits by a few MSA vendors) then it should be recalculated to reflect the correct amount to be set-aside. Not because CMS or WCRC protocols demand it, but because it is your client's obligation under the MSP.

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Bosserman Pontificates

Medicare Set Aside Services — Tue, 03 Nov 2009 17:34:00 GMT

CMS employee Tom Bosserman of the San Francisco regional office, prolific clarifier of opaque Health and Human Services policy, had this to say regarding Medicare's recovery rights in a wrongful death action.

"If the beneficiary's Estate pursues a Liability insurance settlement,

then Medicare will assert a right of recovery. However, if the

settlement is solely for Wrongful Death, then Medicare will not pursue

recovery.

Wrongful Death statutes are State laws which permit a person's survivors

to assert the claims and rights that the decedent had at the time of

death. These laws may include recovering for the deceased's medical

expenses. When a liability insurance payment is made pursuant to a

Wrongful Death action, Medicare may recover from the payment only if the

State statute permits recovery of these medical expenses. Generally, if

the statute permits recovery of the deceased's medical expenses,

Medicare may pursue its payments, even if the action fails to explicitly

request damages to cover medical expenses. Thus, in that event, even if

the entire cause of action sets forth only the relatives and/or heirs

damages and losses, then Medicare may still recover its payments. If a

Wrongful Death statute does not permit recovering medical damages,

Medicare has no claim to the Wrongful Death payments.

When State law permits a full recovery of medical damages but limits the

amount of the recovery which is payable to creditors as a result of past

medical expenses, Medicare may recover against the entire tort recovery,

up to the full amount of past Medicare payments. However, when State law

limits the amount of the past medical expenses which may be recovered

from the tortfeasor and responsible insurer, Medicare may recover only

up to that amount (or the amount of the settlement, if the settlement is

less than or equal to Medicare's claim.)

Any Wrongful Death settlement agreement would have to be closely

examined to ensure that only a wrongful death claim is involved. There

may be instances when the settlement also specifically provides for

payment of a decedent's medical damages that would not be properly

classified as a purely Wrongful Death action, no matter how the matter

is captioned. In such a situation, Medicare is entitled to recover its

medical expenses from the proceeds of a settlement from the defendant's

insurer (or from any defendant who is self-insured). Because the

Wrongful Death action joins the damage claims of the Medicare

beneficiary's heirs with the claim for medical expenses asserted by the

beneficiary's Estate, the plaintiff's attorney may contend that any

settlement / judgment is intended solely to compensate the heirs.

Therefore, it is important to note that (in the absence of a specific

Court determination of the recovery amount attributable to medical

damages) where any portion of recovery could relate to medical

expenses, Medicare asserts its recovery rights against the entire amount

of the settlement"

Compliment to Tom Bosserman from the NAMSAP listserv:

"I love Bosserman, he is a smart guy who helps when he can and does the right thing" - Henry Krohnlein - Protocols, LLC

To profess YOUR love to Tom, email him at Bosserman, Thomas M. (CMS/WC)

Email Provided courtesy of:

Linda Nelson, CCM, CLCP, MSCC

Medical Management Resources, Inc.

PO Box 4818

Helena, Montana 59604

406-449-3600

Fax: 406-443-2088
www.mmrimt.com

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Medicare Cuts = patient hardships

Medicare Set Aside Services — Mon, 02 Nov 2009 16:22:00 GMT

It appears that 2010 could certainly be a troubling year for many physicians, especially those whose practices are primarily directed to Medicare beneficiaries. A scheduled 21% cut in Medicare reimbursement rates to physicians is looming as the Senate voted last week against stopping that cut, as well as more annual cuts over the next decade. CNNMoney.com posted an article yesterday summarizing the plights of several physicians who want to continue to treat Medicare patients but will not be able to cover the expenses associated with doing so if the planned cuts are made. In fact, in cities such as Las Vegas and Anchorage, Alaska, Medicare beneficiaries are already finding that they are often unable to secure physicians’ services. What’s happening in Vegas may not stay in Vegas this time but may actually be a prelude to what’s to come in other cities next year.

The Centers for Medicare and Medicaid Services (CMS) weighed in on the subject and noted that its data actually supports the finding that there is only a small percentage of current Medicare beneficiaries that are unable to obtain physician care at this time. CMS referenced a Government Accountability Office (GAO) report that revealed less than 3% of Medicare beneficiaries reported “major difficulties” when trying to obtain treatment from physicians in 2007 and 2008. While Congress has blocked cuts in physicians’ reimbursement rates in recent years, Federal statutes require that an annual adjustment be made to these rates based on the strength of the economy. As more seniors become Medicare eligible and the economic outlook continues to be uncertain, healthcare reform agendas need to address this issue while preserving the quality and availability of medical care to our seniors and others who receive Medicare benefits.

To read this article in its entirety, please visit: http://money.cnn.com/2009/10/27/news/economy/healthcare_medicare_doctors/index.htm

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