Bill Aims to Untangling Medicare Secondary Payer Act Confusion
By JOSHUA CLIFTON, a Chicago-based writer who covers workers' comp and disability issues
Navigating the complex provisions outlined by the Medicare Secondary Payer Act is enough to make your head spin. However, the workers' compensation community is hoping a renewed push by federal lawmakers will ease the burden by streamlining the arduous process.
The Medicare Secondary Payer Enhancement Act of 2010, introduced by Rep. Patrick Murphy, D-Pa., and Rep. Tim Murphy, R-Pa., is aimed at addressing a number of problems that have arisen as a result of the Centers for Medicare and Medicaid Services (CMS) Section 111 reporting requirements, as well as conditional payment and recovery issues.
The reporting rules, which were spawned from the Medicare, Medicaid and SCHIP Extension Act of 2007, include a penalty provision of $1,000 per day, per claim for failing to properly notify the CMS when a Medicare beneficiary has a medical expense that falls under the primary responsibility of a liability, no-fault or workers' comp insurance plan (including self-insurance).
An outpouring of concern from the insurance community recently led federal officials to delay the reporting compliance deadline until Jan. 1, 2011.
Roy Franco, director of risk management services for Safeway Inc. and co-chairperson of the Medicare Advocacy Recovery Coalition (MARC), which helped craft the bill, said that the legislation is intended to clear up some of the confusion surrounding the requirements and remove some of the hurdles to the payment process, while providing all parties to a claim certainty and finality and still supporting the government's need to be reimbursed for Medicare expenses.
"The current Medicare Secondary Payer process places considerable impediments upon the flow of needed information, beneficiaries' ability to settle claims and everyone's ability to promptly reimburse the Medicare trust fund," he said. "These roadblocks discourage settlement, slow down the return of trust-fund dollars and ultimately rendering many cases involving Medicare beneficiaries unsettleable."
Last June, MARC gathered together key stakeholders of the MSP-regulated community, including attorneys, brokers, insureds, insurers, insurance and trade associations, self-insureds and third-party administrators, to reach a consensus on what needed to be fixed.
"We knew there was no way we could introduce legislation without first walking it through with the stakeholders and determining an acceptable plank that we could all agree on," Franco said. "We were looking for solutions that would allow parties to have more control over the process, rather than rely on the current system that causes a great deal of consternation."
THE BILL'S DETAILS
The group shared a similar belief on many key issues, which served as the core basis of the legislative remedies found in the Medicare Secondary Payer Enhancement Act of 2010. Among those changes, the new bill would:
-- Provide a specific time frame and process to be used in determining MSP-required payments before settlements. Franco said the legislation would revise the information flow so that MSP conditional payment demand occurs before settlement.
-- Create a right of appeal for nongroup health plans with respect to MSP obligations.
--Set MSP recovery thresholds and a statute of limitation for claims. The bill would establish a $5,000 threshold on MSP recoveries and set a three-year statute of limitations.
"We need a clearly defined limitations period, because the current fall-back period of six years is too long," Franco said. "And the threshold will ensure that the government won't incur unnecessary costs in chasing low-dollar claims."
-- Take Social Security numbers and health insurance card numbers out of the reporting process. This will help qualm privacy liability fears raised by insurance companies, TPAs and employers, Franco said.
-- Establish safe harbors and clarity with respect to Section 111 reporting penalties. A safe harbor alternative is needed, Franco said, if CMS is unable to provide a final demand before settlement.
-- Establish a modest user fee designed to ensure that the reforms in the bill do not raise cost issues in the scoring of the bill.
WORKERS' COMP CONCERNS
While the focus of the legislation is primarily aimed at liability issues, the bill was intentionally written broadly so that it could encompass the workers' comp concerns of insurance carriers and self-insured employers.
"It was written without reference to liability, so that it wouldn't conflict with another piece of workers' comp-specific legislation that is on the table," Franco said.
That bill, HR 2641, was introduced by Rep. John Tanner, D-Tenn., last year to resolve concerns of serious delays and confusion in the review of workers' comp Medicare set-asides. Douglas J. Holmes, president of the Washington, D.C.-based trade organization Strategic Services on Unemployment & Workers' Compensation and coordinator of the Coalition for Medicare Secondary Payer Reform, said the newly introduced bill dovetails nicely with Tanner's legislation.
"This goes hand-in-glove with the Tanner bill," he said. "It features a number of issues that have not been addressed in statute, but are very important to the business community. The conditional payment recovery provision, for example, is something that has created confusion in both liability and workers' comp."
Despite being immediately referred to two house committees upon introduction, Franco and Holmes agree that more work is needed to move the Medicare Secondary Payer Enhancement Act of 2010 forward.
"Our objective is to get either one to vote it out of committee, which requires getting our congressional representatives interested in the bill," Franco said.
Holmes conceded that it may be a challenge, considering the significant number of issues currently on Congress' plate.
"We have some work ahead of us to educate lawmakers about how the current system is being administered," he said. "It would be great if we could get some action as soon as possible, be we recognize that that legislative clock is ticking on other high-priority issues."
Holmes said there is also ongoing concern about the impact of the CMS policy of using average wholesale pricing in determining future medical costs. In many cases, he said, there are discounts available which are not being recognized by the agency.
"This isn't something we are going to give up on," he said. "This is quickly becoming a growing issue and more significant problem for all businesses to address. We are not in this to avoid workers' comp's role as the primary payer, but we also want to make sure that the way future medical amounts are determined is reasonable. We would like to get some resolution that makes sense for all the parties involved, and we'll continue to press for a response."
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April 8, 2010
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