CMS Clears Up Uncertainty Regarding TPOC Reporting Threshold: $2,000 Threshold Remains in Place

Last week, CMS announced an "increase" in the $300 threshold below which claims do not have to be reported to Medicare and for which Medicare will not seek recovery of conditional payments.  That threshold was changed from $300 to $1,000 and was effective immediately with the publishing of the alert.  Given the wording of the CMS alert, it remained unclear, however, whether the $2,000 TPOC reporting threshold currently in place until October, 2014 was also changed.

Today, CMS issued an updated version of the NGHP User Guide which clarified the issue.  The new threshold does NOT affect the current $2,000 TPOC threshold.  The User Guide now provides as follows: 

• If the most recent TPOC Date is on or between October 1, 2013 and September 30, 2014, and the cumulative TPOC Amount is greater than $2,000, the TPOC(s) must be reported no later than the end of the RRE’s submission timeframe in the quarter beginning January 1, 2014.
•  For this date range, TPOCs greater than $300 through $2,000 may be reported, but there is no requirement to do so.
• If an add record is submitted for this date range with a total TPOC Amount less than or equal to $300, the claim report will reject with a CJ07 error. 
• If the most recent TPOC Date is on or after October 1, 2014, and the cumulative TPOC Amount is greater than $1000, the TPOC(s) must be reported no later than the end of the RRE’s submission timeframe in the quarter beginning January 1, 2015.
•  For this date range, TPOCs greater than $300 through $1,000 may be reported, but there is no requirement to do so. 
• If an add record is submitted for this date range with a total TPOC Amount less than or equal to $300, the claim report will reject with a CJ07 error.

The NGHP User Guide may be found by clicking here.  

New CMS Alert: Liability Settlements Below $1000 Do Not Have to be Reported and CMS Will Not Seek Reimbursement

On February 18, 2014, CMS issued two alerts concerning settlements in liability cases.  The first alert raised the minimum threshold for reporting liability settlements under Section 111 and for determining whether Medicare’s conditional payment claims must be reimbursed.  The threshold was raised from $300 to $1000.  In a second alert issued on the same date, CMS indicated that the new threshold applies immediately to physical trauma-based liability settlements only.  The threshold does not apply to settlements for ingestion, implantation or exposure or to workers’ compensation cases.  CMS stated: "CMS is increasing its current reporting threshold from $300 to $1000.  This new threshold is effective immediately.  This means that physical trauma-based liability settlements of $1000 or less do not need to be reported and recovery of  Medicare’s conditional payment amount from these settlements will not be pursued."  You may find each of these alerts at:

http://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Mandatory-Insurer-Reporting-For-Non-Group-Health-Plans/Downloads/New-Downloads/Computation-of-Annual-Liability-Insurance-Settlement-Reporting-and-Recovery-Threshold.pdf

and

http://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Mandatory-Insurer-Reporting-For-Non-Group-Health-Plans/Downloads/New-Downloads/Alert-Change-in-Reporting-Threshold-for-Certain-Liability-Settlements-Judgments-Awards-or-Other-Payments.pdf

We will continue to stay ahead of developments concerning the Medicare Secondary Payer Act and ensure that you remain informed.  Please contact us if you have questions regarding the most recent CMS alert or any other Medicare Compliance issue.

Medicare Advantage Plan Can Recover From Settlement Proceeds Despite State's Anti-Subrogation Doctrine

In the recently decided case of Estate of Deborah A. Ethridge v. Recovery Mgmt. Sys., 2014 Ariz. App. LEXIS 23 (February 13, 2014), the Court of Appeals of Arizona decided that a Medicare Advantage plan's recovery rights under the Medicare Act preempt Arizona's common law anti-subrogation doctrine. When Ms. Ethridge died in 2007 due to alleged nursing home negligence, her estate and her beneficiaries pursued recovery and sought (among other damages) compensation for medical expenses. Ethridge's Medicare Advantage plan had paid for care stemming from her alleged injury. Her estate and beneficiaries ultimately settled for $1.2 million and, thereafter, the Medicare Advantage plan sought reimbursement for its claims. In response, her estate sought a declaration from the court that the Medicare Advantage plan could not obtain any recovery under Arizona's anti-subrogation doctrine. 

 

Under the court's close reading of the controlling statutes, it was clear to the court that "Medicare Advantage plans [do not enjoy] the same right to reimbursement enjoyed under traditional Medicare." Id. at *11-*12. Because the statute provides Medicare Advantage plans with the right to obtain reimbursement from the settlement proceeds of personal injury claims, however, and because there is an express preemption provision that (through amendment) broadly preempts 'any' state law, Arizona's anti-subrogation doctrine was preempted. Therefore, the Advantage plan could seek reimbursement from the estate's recovery.

 

This decision was silent as to a Medicare Advantage plan's reimbursement rights against a settling defendant, such as an insurance company or self-insured. The court only specifically addressed the rights of a Medicare Advantage plan in respect to the estate's recovery proceeds. However, this decision is yet another example (in a growing line of cases) in which a Medicare Advantage plan is more actively engaging in collection efforts. Given this trend, we continue to caution parties to investigate whether claims of a Medicare Advantage plan exist when settling any case with a Medicare beneficiary.

CMS Proposes Expansion of Re-Review Process for Medicare Set-Asides

CMS has proposed a rule to expand its current, limited appeal ("re-review") of Medicare Set-aside determinations. Until now, CMS has only allowed an appeal of its determination when the submitter omitted documentation from the original proposal or when a mathematical error was made by Medicare’s review contractor.  The notice concerning the proposed rule can be found at:


http://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/Downloads/WCMSA-Re-review-Expansion.pdf.

Under CMS's proposed expansion of re-review, a new reviewer at Worker's Compensation Review Center will consider a re-review for the same reasons as they now allow (mathematical error or accidentally omitted documentation). They also plan to consider re-review requests for additional, specifically enumerated reasons: when the submitter disagrees with how the medical records were interpreted, when medical records dated prior to the submission date were mistakenly omitted, when items or services priced in the approved set-aside amount are no longer needed or there is a change in the beneficiary’s treatment plan, when a recommended drug should not be used because it may be harmful to the beneficiary, to dispute of items priced for an unrelated body part, or to dispute of the rated age used to calculate life expectancy. To consider this latter list of reasons, the re-review request must be submitted within 180 days of the original determination, the case can not have settled, no prior re-review request can have been submitted for the WCMSA, and the re-review must request a change to the approved amount of 10% or $10,000 (whichever is more).

Even the notice suggests there may be additional grounds to request a re-review, however. CMS suggests that a request can be "elevated" to the CMS Regional Office when the argument for re-review was a failure in the original determination to adhere to court findings, when there is a dispute as to CMS policy, when the carrier maintains Ongoing Responsibility for Medicals for treatment that has been included in approved WCMSA, and other related reasons.

Any comments or concerns can be sent to WCMSARereview@cms.hhs.gov by March 31, 2014. Carr Allison will be preparing our own response to this proposed process and will keep you apprised of forthcoming developments. 

Agreement to Hold Defendant Harmless From 'All Other' Liens Includes Medicare's Conditional Payment Claim

In Rhoades v. Beck, 2014 Ore. App. LEXIS 82 (Court of Appeals, filed January 23, 2014), the plaintiff was involved in a motor vehicle accident that resulted in personal injuries. In pursuing the action, the plaintiff specifically alleged $45,517.69 in medical expenses that she had incurred.  On the eve of trial, the parties agreed to settle the case for $15,000.00 to the plaintiff, $5,500.00 to the plaintiff's husband, and that the defendant would satisfy any person injury protection liens asserted by their auto insurance carrier in exchange for a full and final release of all claims and any other liens (Id. at *2).  After confirming that agreement in an exchange of letters, the plaintiff discovered that Medicare was asserting a claim of $22,970.62 against the plaintiff's recovery.  Given Medicare's claim, the plaintiff refused to sign the settlement agreement without a waiver of Medicare's lien. The defendant, in turn, sought to enforce the agreement.

The trial court found that there was an enforceable agreement between the parties and the plaintiff appealed. The court of appeals also found an enforceable agreement.  The plaintiff's (unexpressed) belief that the parties could not reach an agreement because the Medicare lien was not discussed was not an objectively reasonable belief. More to the point, because correspondence confirmed the terms of the agreement, there was an objective expression that there was a meeting of the minds and thus an agreement. Medicare's later assertion of a claim did not extinguish this agreement; even the plaintiff's attorney acknowledged that all parties were aware that Medicare had made some payments at the time of the negotiations, though they had not known the amount of the claim. As the court succinctly stated, "[w]e will not set aside a settlement in a personal injury case merely because, in hindsight, it was obtained too soon and for too little" (Id. at *5). While an 'enforceable agreement' can vary somewhat from jurisdiction to jurisdiction, this is a useful case in that it underscores the importance of identifying who - between settling parties - will be responsible for any outstanding Medicare issues. 

Updated Life Expectancy Tables

Beginning on March 31, 2014, CMS will begin referencing the life expectancies contained within the CDC's Table 1: Life Table for the Total Population: United States, 2009, for all workers' compensation Medicare Set-aside calcluations.

Restructuring Complete

CMS has completed the restructuring of COB (Coordination of Benefits) and MSPRC (Medicare Secondary Payer Recovery Contractor) into the new Benefits Coordination & Recovery Center (BCRC).  We are hopeful that this will shorten the length of time for obtaining and resolving conditional payment claims for Medicare beneficiaries.