Slowly, but surely, the Centers for Medicare and Medicaid Services (CMS) is making sure medical providers are aware, informed, and prepared to deal with Medicare beneficiaries who must pay their future medical expenses related to a settlement, judgment, award, or other payment from a Medicare Set Aside (MSA). As I blogged about on March 10, 2017, in early 2017, CMS announced a set of codes for Medicare contractors to deny providers’ request for payment of a claim if there existed an open MSA. https://www.flagshipservicesgroup.com/blog/yet-another-clue-that-cms-is-getting-ready-for-liability-and-no-fault-msas
On September 19, 2017, the Medicare Learning Network (MLN), which provides free educational materials for health care professionals on CMS programs, policies, and initiatives, published MLN Matters Number SE17019, intended for providers, physicians, and other suppliers who are told by patients that they must pay the bill themselves because they have a Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA), a Liability Insurance Medicare Set-Aside Arrangement (LMSA), or a No-Fault Insurance Medicare Set-Aside Arrangement (NFMSA). https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE17019.pdf
Medicare beneficiaries, their legal counsel, and other entities, including family members and professional administrators of MSAs that assist these individuals pay for future medical services and prescriptions related to the settled auto, liability, no-fault, or work comp claim, oftentimes indicate that physicians, providers, and other suppliers are reluctant to accept payment directly from Medicare beneficiaries who state they have an MSA and must pay for their accident related services themselves. As a result, MLN is providing such medical professionals with information that explains what an MSA is and explains why it is appropriate to accept payment from a patient that has a funded MSA.
Medicare is Always Secondary Payer to Liability, No-Fault, and Work Comp
SE17019 makes it clear that “Medicare is always a secondary payer to liability insurance (including self-insurance), no-fault insurance, and workers’ compensation benefits. The law precludes Medicare payment for services to the extent that payment has been made, or can reasonably be expected to be made promptly, under liability insurance (including self-insurance), no-fault insurance, or workers’ compensation. (See Section 1862(b)(2)(A) of the Social Security Act, cited in the U.S. code at 42 U.S.C. Section 1395y(b)(2)(A)(i)). When future medical care is claimed, or a settlement, judgment, award, or other payment releases (or has the effect of releasing) claims for future medical care, it can reasonably be expected that the monies from the settlement, judgment, award, or other payment are available to pay for future medical items and services which are otherwise covered and reimbursable by Medicare.”
SE17019 indicates that “whether those services are associated with a liability insurance, no-fault insurance, or work comp situation, Medicare should not be billed for future medical services related to the settlement, judgment, award, or payment until those funds are exhausted by payments to providers for services related to the claim that would otherwise be covered and reimbursable by Medicare.”
Liability Insurance, No-Fault Insurance, and Workers Compensation Plan
SE17019 defines “liability insurance (including self-insurance) includes all types of liability insurance. No-fault insurance includes automobile no-fault, med-pay or personal injury protection/PIP. Workers compensation (WC) includes a WC law or plan of the United States or any state. It also applies to the WC plans of the District of Columbia, American Samoa, Guam, Puerto Rico, and the Virgin Islands as well as to the Federal WC plans provided under the Federal Employees Compensation Act, the U.S. Longshoremen’s and Harbor Workers’ Compensation Act (and its extensions). (See also 42 C.F.R. Sections 411.40, 411.43, and 411.50.)”
Protecting the Medicare Trust Funds Thru Medicare Set Asides
- SE17019 defines an MSA as a “financial arrangement that allocates a portion of a settlement, judgment, award, or other payment to pay for future medical services. The law mandates protection of the Medicare trust funds but does not mandate a MSA as the vehicle used for that purpose. MSAs are the most frequently used formal method of preserving those funds for the Medicare beneficiary to pay for future items or services which are otherwise covered and reimbursable by Medicare and which are related to what was claimed or the settlement, judgment, award, or other payment had the effect of releasing. These funds must be exhausted before Medicare will pay for treatment related to the claimed injury, illness, or disease. Medicare beneficiaries are advised that before receiving treatment for services to be paid by their MSA, they should advise their health care provider about the existence of the MSA. They are also notified that their health care providers should bill them directly, and that they should pay those charges out of the MSA if the treatment or prescription is for the liability insurance, no-fault insurance or workers’ compensation injury/illness/accident; AND the treatment or prescription is something Medicare would cover.”
Voluntary Review of Proposed Medicare Set Asides
SE17019 points out that “for WC, the Centers for Medicare & Medicaid Services (CMS) has a formal process that allows for the review of proposed MSA amounts if specific criteria are met. While CMS recommends use of this process, proposed WCMSA amounts are not required to be submitted to CMS for review. CMS utilizes its Workers’ Compensation Review Contractor (WCRC) for the review of voluntarily-submitted proposed WCMSA amounts.”
SE17019 also points out that although “CMS currently has no such review process for proposed LMSA amounts or proposed NFMSA amounts, the obligation to protect the Medicare trust funds exists regardless of whether or not there is a formal CMS approved MSA amount. Because the CMS review process is voluntary for WCMSA amounts, and there is no formal process for reviewing proposed LMSA or NFMSA amounts, a Medicare beneficiary may or may not have documentation they can provide the physician, provider, or supplier from Medicare approving a Medicare Set-Aside amount.”
Appropriate for Medical Provider to Accept Payment from Beneficiary
SE17019 concludes that “where a patient who is a Medicare beneficiary states that he/she was involved in a liability insurance, no-fault insurance, or workers’ compensation situation; and indicates that he/she is required to use funds from the settlement, judgment, award, or other payment to pay for the items or services related to what was claimed or which the settlement, judgment, award, or other payment released, it is appropriate for the medical provider to document your records with that information and accept payment directly from the patient for such services.”
About Medicare Conditional Payments
42 CFR Section 411.21 indicates that Medicare conditional payments are payments made by Medicare for medical treatment where a primary payer (insurer or self-insurer) has or may have an obligation to make such payment. Primary payers must reimburse Medicare for conditional payments it has made. 42 USC Section 1395y indicates that primary payers include group health providers, workers’ compensation, liability and no-fault insurers and self-insured entities, as well as physicians, attorneys, hospitals, or clinics that receive payment from a primary payer must make reimbursement.
42 USC Section 1395y also indicates responsibility as a primary payer arises even if liability for the medical expense is contested. Such a responsibility can be demonstrated by entry of a judgment or by payment conditioned on a release or waiver of payment, even if liability is denied. 42 CFR Section 411.24 indicates Medicare has a direct right of action against all primary payers responsible for making payment. And, Medicare has a direct right of action against any person or entity that received a primary payment, including the Medicare beneficiary, medical provider, physician, attorney, state agency or private insurer.
About Medicare Advantage and Prescription Drug Plans Reimbursement
42 CFR Section 422.108(f) provides MAPs with the same rights of recovery that the Secretary of HHS has under the MSP regulations in subparts B through D of part 411 of 42 CFR. Additionally, the same MSP regulations at 42 CFR Section 422.108 are extended to PDPs at 42 CFR Section 423.462. Therefore, PDPs have the same MSP recovery rights as MAPs, which have the same recovery rights as HHS. This includes, as recent federal appellate and district court decisions have indicated, the ability to pursue double damages through MSP private cause of action pursuant to 42 USC Section 1395y(b)(3) should the primary payer deny the MAP or PDP reimbursement of any due conditional payments.
About Medicaid Liens
42 USC Section 1396a mandates that all reasonable measures to ascertain legal liability for Medicaid payments and reimbursement of same be taken. The state or agency administering a Medicaid plan must take all reasonable measures to ascertain the legal liability of third parties to pay for care and services paid by Medicaid. Federal law also provides that in any case where such a legal liability is found to exist after medical assistance has been made available on behalf of the individual, the state or local agency must seek reimbursement for such assistance to the extent of such legal liability. 42 U.S.C. Section 1396a(a)(25).
The 2013 Strengthening Medicaid Third Party Liability Act, effective October 1, 2017, allows state Medicaid agencies or the insurers/managed care organizations contracted with to provide such benefits to seek reimbursement from any responsible third party of all payments made from the entirety of settlement, judgment, award funds, not just a portion thereof.
About Flagship Services Group
Flagship Services Group is the premier Medicare compliance services provider to the property & casualty insurance industry. Our focus and expertise has been the Medicare and Medicaid compliance needs of P&C self-insureds, insurance companies, and third party administrators. We specialize in P&C mandatory reporting, conditional payment resolution, and set aside allocations. Whether auto, liability, no-fault, or work comp claims, we have assembled the expertise, experience and resources to deliver unparalleled MSP compliance and cost savings results to the P&C industry. To find out more about Flagship, our folks, and our customized solutions, please visit us at www.flagshipservicesgroup.com. To speak with us about any of our P&C MSP compliance products and services, you may also contact us at 888.444.4125 or firstname.lastname@example.org.
About Rafael Gonzalez
Rafael Gonzalez, Esq. is President of Flagship Services Group. He speaks and writes on mandatory insurer reporting, conditional payment resolution, set aside allocations, CMS approval, and MSA and SNT professional administration, as well as the interplay and effect of these processes and systems and the Affordable Care Act throughout the country. Rafael blogs on these topics at Medicare Compliance for P&C Insurers at www.flagshipservicesgroup.com/blog. He is very active on LinkedIn, Twitter, Instagram, and Facebook. He can be reached at email@example.com or 813.967.7598.