2017 Medicare watch list

March 20, 2017 / 8 min read

As the first quarter of 2017 comes to an end, it’s clear there will be no shortage of Medicare Secondary Payer (MSP) developments to keep an eye on this year.

Here’s an outline of a few MSP events to watch in 2017:

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WCRC bid: Last year, the Centers for Medicare & Medicaid Services (CMS) opened up the Workers’ Compensation Review Contractor (WCRC) for bid, as they do every few years. The big question is whether the current WCRC, Provider Resources Inc. (PRI), will be retained or if CMS will go with another contractor. We’ve passed the February 15, 2017, deadline CMS set for proposal bids. Now CMS will begin the process of selecting the WCRC with a goal to award the contract on June 30, 2017. We’ll be keeping a close eye on how the “new” contractor will handle possible implementation of LMSA reviews (see #4 below) and the proposed re-review policy change (see #2 below). In both instances, it’s a good bet that these changes will likely be released after the WCRC contract award.
Potential WCMSA changes: There has been recent activity from CMS indicating some possible changes regarding Workers’ Compensation Medicare Set-Aside (WCMSA) Arrangements, including:
Re-review/URs: CMS issued an alert last fall indicating it’s considering expanding its current WCMSA re-review process to allow consideration of post-submission medical evidence in certain situations. Similarly, CMS is considering updating its current Utilization Review position. Hopefully, this signals a policy shift that will give Utilization Reviews more evidentiary weight in the WCMSA review process. Although no further information has been released, we’re watching closely, as both changes could have a significant—and positive—impact on the WCMSA process.
Zero MSAs: An item to watch is whether CMS will revisit its short-lived (and retracted) October 2016 policy proposal to change the zero dollar MSA review criteria. Last October, the industry was blindsided by CMS’ proposal to include a new requirement that either a judicial “order on the merits” or physician determination indicating “future medical treatment is no longer required” be obtained for approval of a zero MSA. This unannounced policy change effectively halted zero MSA approvals for denied claims for a short time. While CMS eventually retracted the change on October 31, 2016, it did not extinguish the possibility that this topic could be revived in the future. We continue to monitor this and will push back against any future proposed changes that would be detrimental to our clients or the WCMSA process.
MSA funding: Another recent topic is CMS’ policy interpretation that an MSA must be funded for a claimant’s lifetime, even when a state’s workers' compensation statute limits the time an insurer is responsible for benefits.

On this note, CMS’ WCMSA reference guide section 10.4.2 specifically states: In order to protect Medicare’s interests, a WCMSA should be funded based on the life expectancy of the claimant unless state law specifically limits the length of time that WC covers work-related conditions.

Given the apparent conflict within CMS’ own policy, we requested a rule clarification directly from the CMS central office, and it agreed to review the discrepancy in a future policy meeting. While this may or may not result in a beneficial policy change, we’re encouraged that CMS is willing to consider this important issue further.

LMSAs: Liability Medicare Set-Asides (LMSAs) are back in the spotlight. In June 2016, CMS issued an industry alert announcing plans to revisit the MSA issue for liability and other non-group health plans (NGHP) claims. While this notice provided no substantive details, CMS noted it planned to work closely with all stakeholders to determine “how best to implement this potential expansion.” And although there was mention of holding Town Hall calls by the end of 2016, there have been none so far, nor any further policy alerts.

While the industry awaits further information, there are signs CMS is preparing internally for a possible expansion of its MSA process. For example, in December 2016, CMS issued a formal solicitation and bid notice regarding the Workers’ Compensation Review Contractor contract. The WCRC is the contractor that CMS uses to review Workers’ Compensation Medicare Set-Aside Arrangements.

This bid contains a draft Statement of Work (SoW) that specifies that the contractor ultimately selected must be prepared to implement “a similar process to what exists currently under the WCMSA process to evaluate MSAs for other applicable NGHP insurances within 90 days of request.” The SoW further revealed CMS was contemplating dividing NGHP cases into two categories—requiring either full or cursory review—based on proposed settlement amounts. CMS estimates that full-review volume could be as low as 800 or as high as 11,000 additional cases per year, while it projects another 40,000 cases to qualify for cursory review. No further details were provided on the specific criteria or thresholds to be used. The WCRC bid process ended on February 15, 2017. CMS is now evaluating the bid submissions with a goal of awarding the new WCRC contract by the end of June this year.

In addition, in February 2017, CMS issued a Change Request (CR-9893) to update its Common Working File (CWF) regarding Liability Medicare Set-Aside (LMSA) and No-Fault Medicare Set-Aside (NFMSA) Arrangements. This notice advises that “CMS will establish two (2) new set-aside processes: a Liability Insurance Medicare Set-Aside Arrangement (LMSA), and a No-Fault Medicare Set-Aside Arrangement (NFMSA).” This notice indicates Medicare will not pay for services related to the diagnosis code (or family of diagnosis codes) associated with an open LMSA or NFMSA Medicare Secondary Payer record “when the claim’s date of service is on or after the MSP effective date and on or before the MSP termination date.” In this situation, such claims will be denied based on the open record. For liability and no-fault claims without an MSA, CMS advises these cases “will continue to be processed under current MSP claims processing instructions.” CR-9893 does not provide any substantive information or policy statements regarding specific criteria, thresholds, or other particulars CMS may be considering for LMSAs or NFMAs.

For a more in-depth status on the LMSA issue, click here.

CRC recovery process: All eyes continued to be glued to CMS’ whacky roller-coaster ride, also known as the CRC recovery process. It’s been a bit over a year since this policy became effective, and this process still remains mired with many challenges. The process continues to be a source of great frustration. As many know, one of the big changes relates to CMS increasingly using CRC to pursue claims payers for reimbursement before settlement in situations where the payer has assumed ongoing responsibility for medicals (ORM). This is a significant 180-degree departure from long-standing CMS policy of waiting until after the claim settled to pursue its actual reimbursement. This is causing challenges because claims payers need to update their protocols and practices to deal with this new change. This contractor has also been slow to understand (and accept) the many legitimate arguments and challenges against its claimed recovery. The good news is that we’re making great progress—all due to our aggressive posture, expertise, and diligence. We’re successfully challenging more and more erroneous conditional payment notices and demands every day—resulting in great savings for our clients. We’ll continue to fight the good fight in 2017 (see related article here).
Medicare Advantage Plans (MAPs): In 2016, we saw an expansion of MAP recovery rights in the Humana v. Paris Blank and Humana v. Western Heritage In both cases, the courts ruled that MAPs enjoyed “private cause of action (PCA)” rights, meaning that they can pursue parties for “double damages” related to lien recovery. The Paris Blank decision was interesting in that the court ruled that MAPs had these rights not only against the claims payers but also against plaintiff lawyers and law firms. In Western Heritage, the 11th Circuit (Alabama, Georgia, and Florida) not only ruled that MAPs had PCA rights against claims payers but also actually imposed double damages against the claims payer. It will be interesting to see where the courts head with MAPs in 2017.
Watching Washington: Last year, the SPARC Act was introduced in Congress, and it was just reintroduced as H.R. 1122 as part of the new Congressional session. The SPARC Act proposes to limit the recovery rights of stand-alone Medicare Part D plans to a subrogation right only and would preclude these plans from using other enforcement mechanisms found in the MSP statute. Specifically, the proposed legislation would bar a Medicare Part D plan from filing a federal private cause of action to recover payments or double damages. The SPARC Act would also establish a web portal to exchange information for Part D plans. We’re watching this and will provide updates as warranted.

Another Capitol Hill matter to watch is whether the old WCMSA reform bill (which has been introduced in just about every congressional session over the past several sessions) will resurface. In the past, this bill has taken aim at tightening up CMS’ WCMSA review thresholds, proposed a formal appeals process, and offered alternative approaches to the traditional WCMSA, along with a host of other proposed changes. The bill has never really garnered traction in Congress over the years. We’ll look to see if this bill (in some form or fashion) gets reintroduced in the new congressional session.

If you have questions or would like more information on the above items, please feel free to email Mark mark.popolizio@verisk.com or Sid at sidney.wong@verisk.com.