TPOC Threshold for Section 111 Reporting Changes October 1, 2013

Beginning October 1, 2013 the mandatory reporting threshold for workers’ compensation and liability insurance (including self-insurance) is reduced to require reporting of TPOC amounts over $2,000. Reporting of TPOCs which meet the mandatory threshold is required during the RRE’s submission timeframe in the quarter beginning January 1, 2014.  RREs are also given the option to report any TPOCs greater than $300 up to $2,000 although reporting is not required.  Any TPOC reported with an amount equal to or less than $300 will be rejected.  The October 1, 2013 threshold change will likely have a greater impact on liability cases than it does on workers' compensation cases.

All mandatory TPOC reporting thresholds and the corresponding required reporting dates are shown in the table below.  Additional information can be found in Chapter III: Policy Guidance of the NGHP User Guide in the link below.

http://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Mandatory-Insurer-Reporting-For-Non-Group-Health-Plans/Downloads/New-Downloads/NGHPUserGuideVer36Ch3Policy.pdf
 

Medicare Advantage Plans and Prescription Drug Plans and How They Differ from Traditional Medicare

Under traditional Medicare, Medicare beneficiaries receive coverage through Part A (hospital insurance) and Part B (medical insurance).  Medicare beneficiaries may choose to enroll in a Medicare Advantage Plan under Part C as an alternative to traditional Medicare.  Medicare Advantage Plans are offered by private health insurers as a replacement for coverage under traditional Medicare.  If a beneficiary is enrolled in a Medicare Advantage Plan, the plan pays for the beneficiary's treatment that would otherwise be covered under Parts A and B.  In addition to benefits that are otherwise payable under traditional Medicare, some Advantage plans also provide prescription coverage.  Medicare beneficiaries may also receive prescription drug coverage by enrolling in a Prescription Drug Plan under Part D.  Like Medicare Advantage Plans, Prescription Drug Plans are offered by private health insurers.

It is important to keep in mind when resolving conditional payment claims, that the conditional payment letters issued by the Medicare Secondary Payer Recovery Contractor (MSPRC) only apply to payments made under Parts A and B of traditional Medicare plans.  They do not include information concerning Medicare Advantage or Prescription Drug plan liens.  If a claimant is enrolled in a Medicare Advantage or Prescription Drug plan, the identity of that plan should be determined and the plan should be contacted individually to determine whether it intends to assert a lien.

INTERIM RULE IMPLEMENTING ASPECTS OF THE SMART ACT PUBLISHED

CMS recently issued an "Interim final rule with comment period" regarding the ongoing implementation of the SMART Act. This rule will become effective November 19, 2013, and does not create any substantive changes to the Act but does provide more details regarding access to conditional payment information for individuals other than the Medicare beneficiary, and reiterates the obligation to modify the MSP web portal. Public comments on this rule are welcomed and due before 5 p.m. on November 19, 2013, but a notice-and-comment rulemaking procedure is waived with CMS's finding that it is unnecessary and in the public interest to do so. Note that comments made will be available for public inspection at http://regulations.gov.

The current system allows Medicare beneficiaries to access details regarding conditional payment claims on MyMedicare.gov, but third parties who are not authorized by the Medicare beneficiary cannot access any of this information. Even those third parties who are authorized by beneficiaries can find only limited information via MSP's current website.

To enable third parties to access this information, the interim rule proposes an implementation of a 'multifactor authentication.' This will allow an applicable plan (and the beneficiary's representative) access to claim-specific data without the beneficiary's express consent, via an improved web portal.

CMS' plan is to develop this multifactor authentication within 90 days of November 19th and to implement this process no later than January 1, 2016. In theory, this will allow the beneficiary's representative and applicable plans (that have appropriately registered) to access the improved web portal's details and, ultimately, a copy of the formal demand. The website will implement further revisions to allow Medicare beneficiaries and their agents to dispute unrelated claims, update Medicare's statement, obtain time and date stamped information before mediation, and to notify Medicare's contractor of a settlement's terms. This interim rule does not address an applicable plan's right of appeal and appeal process regarding conditional payments; apparently, the rules implementing this aspect of the SMART Act are still forthcoming.

The official version of this interim rule, and the address for submitting comments, can be found at http://www.gpo.gov/fdsys/pkg/FR-2013-09-20/pdf/2013-22934.pdf. We look forward to additional implementation details of the SMART Act and, particularly, the regulations governing an applicable plan's right of appeal and appeal process. Once available, we will provide an immediate and thorough update.

Haro v. Sebelius Case Update

In Haro v. Sebelius, 2013 U.S. App. LEXIS 18353 (Dist. Az September 4, 2013), the Court of Appeals for the Ninth Circuit vacated injunctions entered by the United States District Court of Arizona and reversed the district court’s summary judgment order in favor of a class of Medicare beneficiaries who challenged the Secretary of Health and Human Services’ (Secretary) practice of demanding “up front” payment for conditional payment claims from beneficiaries appealing or seeking a waiver of the reimbursement obligation. The beneficiaries alleged that the Secretary exceeded her authority under the Medicare Secondary Payer Act (MSPA) by (1) demanding payment before resolution of the appeal and waiver processes and (2) by instructing the beneficiaries’ attorney to withhold the settlement funds until Medicare was reimbursed. Unfortunately, the court was unable to address the first issue because this argument had not been included in the beneficiaries’ appeals or waiver requests and thus, Medicare had not yet had an opportunity to address the matter. Here, we are once again reminded of the importance of ensuring that any and all arguments be addressed in Medicare’s administrative appeals process so that, if the matter reaches the court, the court will have jurisdiction over the issue.

The court was able to address the second issue, whether the Secretary exceeded her authority by demanding that the beneficiaries’ attorney withhold the settlement funds until Medicare was reimbursed. The court looked to the reimbursement provision of the MSPA (42 U.S.C. 1395y(b)(2)(B)(ii)) and determined that because an attorney who receives settlement proceeds, even as an intermediary, has received payment from a primary plan in a literal sense, the attorney is an entity that “shall reimburse” Medicare. Thus, it was reasonable for the Secretary to demand that the attorney withhold the settlement funds until Medicare had been repaid.  While the court did not go so far as to decide whether the Secretary has authority to bring an action to recover secondary payments against an attorney who has disbursed settlement proceeds, that would not be a big step from the court’s holding here. Regardless, attorneys should not ignore Medicare’s demand to hold settlement funds in trust until Medicare has been reimbursed. Even without such instruction from Medicare, doing this is the best way to ensure that the conditional payments are resolved and all parties are protected from issues arising in the future.