A Practical Approach to MSP

Charleston County BarFebruary 14, 2014

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Medicare Insurance Worker’s Compensation Insurance Medicare Secondary Payer Regulations Cost Projections Affordable Care Act Preparing for Settlement Settlement Language Roadblocks to Successful Settlements Post Settlement Issues

Overview

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Registered Nurse Certified Nurse Life Care Planner Medicare Specialist Certified Consultant Legal Nurse Consultant Certified Disability Management Specialist Certified Case Manager Certified Insurance Rehabilitation Specialist

Who Am I?

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15 years clinical and community health

nursing 15 years medical case management nursing 15 years legal nurse consulting and life care

planning 5 years Medicare compliance

Experience

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Jenny Glasgow

Medical Case Manager ProjectWorks Shawn Davis

Paralegal Joye Law Firm

Team

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Ask/answer questions of me Ask/answer questions of each other Offer comments Bring your own experiences to this seminar A lot of information today

Your Class

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How many represent plaintiff clients How many represent carrier/defense How many work only cases in SC How many work cases outside SC

Who are you?

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Define and explain:

MSP LOR SMART COB CHIP MSPRC ANPRM R&R WCMSA LR LMSA CMS ACA HELP

Pop Quiz

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If can answer less than 5, need to stay for full

class If can answer 5-10, can use texting while in

class If can answer 10-13, will be called upon to

help teach If can answer all 14, provide contact

information

Scoring

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MEDICARE INSURANCE

Part 1

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Eligibility

Age Disability Certain medical conditions

Premiums Part A Part B Part D Medigap

Medicare Insurance

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Hospital, with per occurrence and daily co-

pays Skilled nursing facility, with co-pays after 20

days Home health, skilled services only Medical office visits, with 80/20 co-pays Physical & occupational therapy, with 80/20

co-pays Durable medical equipment, with 80/20 co-

pays Diagnostics, with 80/20 co-pays Counseling, with 65/35 co-pays

General Coverage

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Significant co-pays Significant deductibles Significant exclusions

Medications

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Medicare fee schedule Some physicians not accepting Medicare rates Billed rate, then adjustments on paid rate 80% of Medicare rate

Fee Schedule

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TNS unit and supplies Bathroom equipment Home attendant care Transportation Some wheelchair equipment Dental services Vision and hearing services and equipment Podiatry visits

Not covered

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Chart on Medicare coverage

Handout #1

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WORKERS COMPENSATIONINSURANCE

Part 2

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Payment of all inpatient treatment Payment of all outpatient treatment Payment of prescription drugs Payment of durable medical equipment

WC Insurance

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Payment of all required premiums

Employers buy insurance from WC carriers Employers are self insured State Accident Fund

WC

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No co-pays No deductibles No exclusions

WC

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Claim’s administration

Pays bills Schedules appointments Reports to CMS Negotiates rates Authorizes treatment Case management

WC

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Each state has its own WC fee schedule Differs from Medicare fee schedule Differs from group health insurance fee

schedule SC WC fee schedule updates about every 5

years Providers offer additional discounts to WC

carriers

WC

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Medical mileage reimbursement Transportation to/from medical appointments Pays for out of pocket expenses

WC

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Medicare covers whole body but has co-pays

and deductibles

Workers Compensation has no co-pays and deductibles but covers injury related parts only

Summary

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MEDICARE SECONDARY PAYER

Part 3

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MSP regulations, 1980

Medicare Secondary Payer SMART Act, January 2013

Strengthening Medicare and Repaying Taxpayers

ANPRM, October 2013 Advanced Notice of Proposed Rule Making

cms.gov

MSP

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Says Medicare is secondary to all other

insurances and medical funding, including settlements Group health insurance VA benefits Workers Compensation Auto liability insurance Any liability coverage Settlements

MSP

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…for past medical payments …for current treatment …for future medical care

Secondary

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Who is impacted

Class 1: already a Medicare beneficiary Class 2: going to be a Medicare beneficiary

within 30 months

MSP

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CMS will do a pre-settlement review:

Already a Medicare beneficiary and settlement $25,000 or more (Class 1)

Going to be a Medicare beneficiary within 30 months and settlement $250,000 or more (Class 2)

MSP

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Post-settlement review for all cases CMS very often wants more than MSA

allocation How to handle this Who is responsible for additional monies Settlement language

MSP

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Impacts Worker’s Compensation cases Impacts Liability cases

MSP

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Affects all parties

Insurance carriers Defense attorneys Plaintiff attorneys Claimants Physicians and providers

MSP

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4 questions to ask each and every client

Handout #2

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Consider each case as being impacted until

proven not to be Categorize each case as:

Not impacted Class 1 Class 2

Universal Precautions

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Add 4 questions to intake sheet Add 4 questions to settlement checklist Be mindful of age and hitting the 62.5 mark

Do

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Continuously update records with information

Insurance coverage Application to SSDI Application to SSI Medicaid eligibility Medicare eligibility Social Security Administration correspondence

Do

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Obtain copies of all insurance cards

Do

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Sign in-house medical authorization Sign CMS authorization

Do

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Look at internal file management systems Look at daily work flow Look at computer management programs

Do

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Look at contract language Do you need to add anything to clarify

Additional expenses for experts Reporting requirements Other case costs specific to MSP Outsourcing to experts

Do

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Start educating client from day 1 on

settlement impact of MSP

Do

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Plaintiff and defense work together to obtain

all necessary reporting information for CMS

Do

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Questions Comments Discussion

This was the easy stuff

Break

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Regulations require reasonable consideration

for future medical treatment Regulations require reasonable consideration

for future prescriptions Pay back of any/all conditional payments

made

More MSP

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Paralegal with Joye Law Firm Conditional payments her “specialty”

Contact:Joye Law Firm: 843.725.4279

sdavis@joyelawfirm.com

Shawn Davis

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Set up claim with Medicare Coordination of

Benefits (COB) and provide a copy of letter to MSPRC. These are two different offices.

Include as attachments the signed Consent to Release and Proof of Representation forms (available on Medicare’s website).

Conditional Payments

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Be sure the R&R letter includes the correct

claim and/or policy number

Will also provide you with a Case ID Number

Rights and Responsibilities

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Case ID Number is the “key” to the claim All treatment-related claims are filed under

this Case ID Number All correspondence to Medicare should

reference this Case ID Number Contact Medicare if receive correspondence

with more than one Case ID Number to get all claims moved to the correct case

Make sure other cases are closed

Case ID Number

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Notify Medicare of all treatment-related claims

by provider, date of service, and total charge amount

Request specifically a “conditional lien amount” to avoid getting a final demand amount

Be sure to review all claims outlined in the conditional lien letter from Medicare to ensure related to injury

Send a Notice of Dispute to Medicare for any unrelated claims

Requesting Conditional Lien

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Send notice of settlement letter to Medicare

and request “final demand” Include injury summary, itemization of

treatment-related claims, and settlement information

This amount is the total paid to Medicare Be sure to request Release of Claim from

Medicare when payment is sent Interest will run if not paid within 60 days of

receipt of the letter

Requesting Final Demand

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Must have an account set up in order to

access Must have Case ID Number in order to pull

case information Upload Consent to Release and Proof of

Representation forms if not noted on the portal as having been received

Medicare Portal

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Allows access to check status of Conditional

Lien and/or Final Demand quicker instead of waiting on actual letter

Portal still “under construction” phase, so be sure to always check the letter sent by mail

Does not allow access to review claims paid

Access to Portal

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Letter of Representation Conditional Lien Notice of Dispute Notice of Settlement

Letters to Medicare

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send at the time of sign up or when notified

Medicare has an interest for treatment-related claims

Letter of Representation

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At end of treatment or within 3 months of date

of initial treatment Request updated conditional lien amount

every 3 months

Conditional Lien

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At the time listing of unrelated claims is

received

Notice of Dispute

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On the date of the settlement if certain will be

able to pay within the next 60 days Interest starts to accrue on day 61

Notice of Settlement

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Here are some, you might have others

FAQ

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Insurance carrier insists on putting Medicare

on check or issuing payment directly to Medicare

#1

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Medicare sends final demand amount after

receiving notice of settlement from insurance carrier

#2

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Medicare sends lien notice on third-party case

when treatment is approved by WC carrier

#3

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Medicare opens more than one case for a

specific date of injury

#4

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Notice of Representation to Medicare COB Rights and Responsibilities letter from

Medicare Request for Conditional Lien Amount Notice of Dispute of Claim Notice of Medpay coverage Notice of Settlement, Request for Final

Demand Payment of Medicare lien and Request for

Release

Handout #3: Packet

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Carrier

At time of claim if WC case At settlement if liability case Every 3 months until medicals closed out (WC)

Reporting to CMS

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Claimant

If WC: After settlement, if MSA set up, annual reporting

If liability: no reporting guidelines in place

Reporting to CMS

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Not all clients impacted by MSP are

represented How do carriers handle MSP with non-litigated

cases

Question

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Questions Comments Discussion

Session break

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COST PROJECTIONS

Part 4

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Is this a Work Comp case Is this a Liability Case Is this a third party case Is claimant impacted by MSP Do you have an MSA or requested one Are there discovery deadlines Is there a mediation date

My own questions

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Worker’s Compensation MSA Non Covered Allocation Disability Cost Projection Liability MSA Life Care Plan

Cost Projections

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An apportionment tool Not required Whole settlement subject to spend down if no

MSA Prepared prior to settlement Retrospective analysis

WC MSA

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Written to protect Medicare’s interest Not a cost projection or a life care plan Typically prepared at request of carrier Based on last 2 years of medical/pharmacy

records Payout history required Uses standard of care projection models No updated information from claimant or

physician

WC MSA

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CMS requires certain fields in the MSA:

Medical treatment Prescriptions If annuitized, seed money and annual payments WC fee schedule

WC MSA

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Rated age CDC life expectancy charts Off label drug review Pharmacy review AWP of drugs Limited standard of care scheduling

Discounting factors

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Separate, interest bearing account Annual reporting to CMS Early approved withdrawal Inappropriate withdrawals Seed money to establish account Annual payments Death benefits Using MSA prior to becoming a beneficiary

MSA Account

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MSA reporting paperwork

Handout #4

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Self Professional

Required if brain injury or incompetent Full administration Limited administration

Administration

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How do you educate your clients with MSA Who educates the docs on using the MSA Has anyone had feedback from clients using

an MSA

Questions

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Both defense and plaintiff usually agree to

MSA recommendations and amounts Knowing CMS will eventually review the MSA

(if not done prior to settlement), important to include language in settlement documents regarding WHO will be responsible for additional amounts to fund the MSA

Practice tips

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CMS guideline on MSA administration

Handout #5

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Medical Case Manager ProjectWorks Non-covered allocations Post settlement apportionments Cost Projections

Contact:843.813.7375

Jenny Glasgow

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Medicare says “thou shalt not shift the burden

to Medicare” MSA protects Medicare’s interests but only

addresses the treatment and costs of Medicare covered items

Non Covered Allocation

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In essence, then, when medicals are closed

out using a MSA, the carrier is shifting a portion of the burden to the claimant UNLESS the non-covered treatment and costs are also considered, along with all the other administrative costs typically paid for by WC insurance

Burden Shift

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New trend Negotiation tool Informed decision

Protects claimant Protects attorney

NCA

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Companion report to WC MSA Prepared before settlement, part of

negotiations Plaintiff requests report Written to protect claimant’s exposure Current medical/prescription information No discounting factors or reduced life

expectancy

NCA

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Administrative costs Cost of required premiums Cost of co-pays/deductibles for covered

prescriptions Cost of non-covered prescriptions Cost of non-covered medical treatment Cost of transportation

Costs not covered

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Self Administration Professional Administration

Administrative Costs

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Part A—required by CMS Part B—required by CMS Part D—optional, but no drug coverage

without it Medigap—optional, covers co-pays and

deductibles

Penalties if not purchased when first eligible Open enrollment period Qualifying event

Required Premiums

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Annual deductible 25% co-pay until reach donut hole, standard

level 50% co-pay while in donut hole 5% co-pay after donut, catastrophic level

If no Part D insurance, or drug plan, then claimant pays 100% of all drug costs

Prescription co-pays

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Benzodiazepines Barbiturates Weight loss Erectile dysfunction No over the counter preparations or drugs

NC Prescriptions

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Home attendant care Any bathroom equipment TNS unit Wheelchair accessible vans Home modifications

NC Medical treatment

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Multiply $18 by 8 by 365 by 25

Exercise

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$1,314,000.00

Answer

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Mileage reimbursement for medical

appointments

Transportation

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Comparison chart for MSA and NCA

Handout #6

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Some actual figures

Handout #7

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Typically prepared for WC cases only Based on standard of care or specific medical

recommendations Uses WC fee schedule Not reduced to present day value or factored

for inflation Informational tool only, not used as basis for

expert testimony

Disability Cost Projection

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Addresses:

Surgery Diagnostics Physician visits Therapy Equipment Injections Other

DCP

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Prepared after:

Interview with client Review of medical records Review of depositions Review of 14B Standard of care protocol Research costs

DCP

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Sample disability cost projection, MSA, and

non-covered allocation

Handout #8

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Comments Questions Discussion

Before we get to the really hard stuff

Break

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Warning: enter at your own risk Content may be harmful to your mental health Management not responsible for damages Expletives allowed

Liability MSA

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Liability MSA is truly a plaintiff problem and a plaintiff attorney responsibility

Personal commentary

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Not required Voluntary basis No review process in place Minimal guidelines from CMS An apportionment tool to avoid 100% spend

down Prepared post-settlement Documents claimant’s consideration of

Medicare’s interest

Liability MSA

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Settlements below $300 have no obligation Settlements between $300 and $5,000 can set

aside 25% to satisfy MSP/CMS If physician provides a letter stating no future

treatment needed, can project a zero allocation….but still need the document packet

CMS guidelines

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Carrier reports case at time of settlement Plaintiff responsibility to consider Medicare’s

interest for conditional payments and future medical treatment

Plaintiff determines need for apportionment tool, the voluntary MSA

Liability MSA

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Steps to take when considering MSA for

liability cases We are going to spend a lot of time on this

topic If need additional information, call me, or call

someone with knowledge and experience

Special Section

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If Medicare lien (conditional payment) exceeds

amount of settlement, negotiate with CMS for waiver or reduced repayment amount

Pay back the money…………………..or else

Conditional Payments

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Does the settlement include money for future

medical care? General or implicit language

Release to “any and all future claims” Specific or explicit language

A specific dollar value

Settlement Language

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If yes to either implicit or explicit language,

best course is to consider if MSA needed

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Is Medicare going to be primary payer at time

of settlement or shortly (30 months) thereafter Future medical care must be recommended Settlement monies must be available for

future medical care

Do you need MSA

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If not going to be a Medicare beneficiary at

time of settlement or shortly thereafter, document file showing how you arrived at this and retain documents forever

If “no”

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If no future treatment going to be needed, get

medical documentation, document file showing how you came to this conclusion and retain all correspondence and documents forever

If “no”

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Even if claimant will be eligible for Medicare at time of settlement or shortly thereafter, and even if there will be future medical care needed, there might not be enough money left over to set aside for anything……………….

Enough money?

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Start with settlement amount Subtract:

Attorneys fees Case costs Conditional payment lien Any other liens, such as Medicaid, VA, group

health Lost wages and lost earning capacity Pain and suffering

Calculating available funds

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Out of pocket expenses for future treatment

Home attendant care Transportation Home modifications Non-covered equipment Non-covered prescriptions OTC drugs Co-pays and deductibles Insurance premiums

Then subtract

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If net recovery is close to gross damages, then

use reasonableness standard to determine if MSA needed

If net recovery not close to gross damages, then can calculate percentage of monies available Need attorney to help you with this

Net recovery

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Need to calculate value of future medical

treatment Cost projection or life care plan Eliminate all non-covered treatment Use discounting factors allowed by CMS

Determine dollar amount of available money MSA should be the lower amount of the

amount of future treatment or the net recovery

If money available

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To have MSA prepared by someone who can

meet CMS guidelines, while minimizing the impact to the claimant

Prospective analysis, not retrospective work that is done for WC MSA

Be cost effective for the claimant Be consistent and reliable

Critical

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Setting up MSA account Administration of MSA monies Funding the MSA account Attestation language, letters, documents

Educate client

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Retain for your file forever:

Questionnaires on eligibility Medical records pertaining to future medical

care Questionnaires to physicians for zero allocation MSA determination packet Client attestation letters

Documentation

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Do you do all this yourself Do you outsource Where to get help

Outsourcing

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Sample questionnaire to physician

Handout #9

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CMS memo of 9-30-11 regarding exposure

claims

Handout #10

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Sample attestation language Sample letter to client

Handout #11

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Questions Comments Discussion

Session break

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Used in catastrophic liability cases Follows standard methodology Build a strong medical foundation Usual and customary fee schedule Collateral source rule Economic analysis Basis for deposition and trial testimony

Life Care Plan

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If costing surgical procedures, then use

disability cost projection

If this, then that

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If a WC case not impacted by MSP, then use

disability cost projection

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If a WC case impacted by MSP, then need MSA

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If a WCMSA prepared, then need non covered

allocation

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Liability case:

Pre-settlement: full life care plan for damages Post-settlement, if impacted by MSP:

Cost projection or life care plan broken down into covered vs. non-covered expenses

Voluntary MSA

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Compliance tips

Handout #13

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SMART act summary

Handout #14

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Questions Comments Discussion

By now, eyes are glazed, brains are numb

Session Break

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AFFORDABLE CARE ACT

Part 5

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As we go through the next set of slides, think

through each of the points and consider how each will impact/affect either a worker’s compensation case or a liability situation…..

…..and especially if have any bearing on settlements

Affordable Care Act

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Essential benefits Mandatory coverage No pre-existing exclusions No lifetime maximum Tiered level of co-pay Qualifying event Provides treatment for injury or disability Provides treatment for rehabilitation

Affordable Care Act

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All policies, through either the state exchange or through

federal program have to include: Ambulatory patient services Emergency services Hospitalization Laboratory services Maternity and newborn care Mental health services and addiction treatment Rehabilitation services and devices Pediatric services Prescription drugs Preventive wellness services and chronic disease treatment

Essential Benefits

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Can stay on parent’s policy until age 26 Can be on employer provided policy Can purchase own policy through state

program Can become eligible for Medicare either by

age or through SSDI program Can qualify for Medicaid

SC did not expand Medicaid eligibility criteria as some states did

Mandatory Coverage

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No pre-existing condition exclusion No lifetime maximums Has own network of providers Fee schedule for payment

ACA policy

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Can purchase varying levels of co-pay options

from 60/40 to 80/20 ACA says there is a 90/10 premium tier level

available, but not commonly available yet Maximum out-of-pocket amounts determined

to be $6350 for individuals Need to make sure policy has dual coverage

for medical and prescriptions, or there will be a dual out-of-pocket amount of $6350 for medical and another $6350 for prescriptions

Tiered level of co-pay

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Can purchase individual and family insurance

coverage through state exchanges during open period

Can purchase a policy if there is a qualifying event, but have a 60-90 day window

Can purchase a policy for short periods of time. An example being to fund coverage while waiting for Medicare eligibility.

Enrollment

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Loss of coverage due to injury Loss of coverage due to termination of

benefits Loss of coverage due to inability to work

Qualifying Event

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Prior to ACA, injury and other medical

conditions often were classified as pre-existing and excluded from insurance coverage

With ACA, injury/disability and all medical conditions are now fully covered without waiting periods, higher premiums, or excluded completely

Injury/Disability

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ACA covers rehabilitation treatment for

injuries, including hospitalization, medical treatment, medications, counseling, physical therapy, and equipment

Rehabilitation

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All folks All conditions Medical treatment Prescriptions

Coverage

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Need discussion on what is non-covered and

importance of being able to identify and calculate for this

Non-Covered

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Discussion

Impact on WC Cases

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Discussion

Impact on Liability Cases

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Questions Comments Discussion

Session Break

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PREPARING FOR SETTLEMENT

Part 6

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Determine Medicare and Medicaid liens Determine group health liens Determine public benefits protection Determine MSP impact future treatment

Preparing for Settlement

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Determine group health liens

Preparing for Settlement

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Determine public benefits funding and

protection

Preparing for Settlement

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Determine MSP future treatment impact

Preparing for Settlement

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Have cost projection Have MSA Have non-covered allocation Have life care plan

Preparing for Settlement

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Have annuity figures

Preparing for Settlement

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SETTLEMENT LANGUAGE

Part 7

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WC, not impacted by MSP WC, impacted by MSP Liability, not impacted by MSP Liability, impacted by MSP

Settlement Language

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Sample settlement language for WC case not

impacted by MSP Sample settlement language for WC impacted

by MSP

Handout #12

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Intake sheets Contracts Pre-settlement conferences Settlement discussions At disbursement Follow-up letters Attestation documents Packets of information

Client Education

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ROADBLOCKS TOSUCCESSFUL SETTLEMENTS

Part 8

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POST SETTLEMENT ISSUES

Part 9

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Final thoughts

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Karen Shelton

843.270.0140

karen.projectworks@gmail.comwww.projectworks4.com

Contact