Problems of delays, inconsistent standards, and confusion about the approval process by the Centers for Medicare and Medicaid Services are not adequately addressed by the legislation, say the two, both of whom will appear at the National Workers' Compensation and Disability ConferenceŽ & Expo.
The Medicare Secondary Payer and Workers' Compensation Settlement Agreements Act of 2012 is the fourth version of similar legislation introduced in Congress. The previous three died in congressional committees.
Jennifer Jordan. "Other than some sections being reordered, the majority of the changes are adoptions of CMS protocols from the voluntary review program," said Jennifer C. Jordan, general counsel of Maryland-based MEDVAL LLC. Jordan said she doesn't think the latest version is better than the last three, nor will it solve the problems plaguing the industry.
"The fundamental problem is CMS itself," she said. "Everything we are currently doing revolves around what CMS is telling us is appropriate based upon its overreaching interpretation of the Medicare Secondary Payer Act. So legislative reform is not what's needed. It's agency reform."
As Jordan explains, the Medicare Secondary Payer Act excludes Medicare's payment of treatment where there is another responsible payer, in this case, workers' comp. However, the law has no requirement mandating CMS involvement or, for that matter, establishing a Medicare set-aside.
"The program is voluntary," she said. "There is no requirement to involve CMS let alone do it CMS' way. I acknowledge Medicare is excluded [from payment] ...so an organization should make provisions to ensure that Medicare is not put in a position to make those payments which would expose it to the MSP reimbursement obligation."
Set-aside amounts approved by CMS are typically "excessive," Jordan says, and include unrealistic medical cost projections "in exchange for the ability to close claims and take down reserves with some degree of finality."
But even that is not guaranteed. "I've had clients report that CMS has come back after settlements are funded and approved by the state and revised approval letters because the claimant notified them post-settlement that something was wrong or missing," Jordan said.
She believes the Medicare set-aside is really a risk management issue and should be treated as such. "The industry has the ability to take control of the issue without involvement of the federal government," she said. "Establish a trust, a captive perhaps. Put the money someplace where you can be sure the MSA will be administered in accordance with CMS' policies, have the benefit of all cost containment available, and capture the unnecessary funds to redistribute across other claims. So long as Medicare never makes a statutorily prohibited payment, the federal government is not going to care how we accomplished that."
"This bill is really bad," said James Pocius, shareholder with Marshall, Dennehey, Warner, Coleman & Goggin in Philadelphia. Pocius says the bill has many gray areas, would not streamline the process, and in some cases either increases the burden on workers' comp payers or would leave taxpayers holding the bag.
For example, current law does not require a set-aside for settlements under $25,000 but says the primary payer must repay any outstanding amounts. "It looks like they are saying [under this bill] if it is under $25,000 Medicare does not have the right to recover," he said. "I'm all for streamlining the system, but that's a little too much."
Other portions of the legislation give workers' comp payers more control, which he says is not necessarily good news.
Pocius says the industry has had free rein in the past but blew it. Several years ago, CMS did not want to review workers' comp claims in great detail. "You sent in something reasonable and they approved it," he said. "What happened? The insurance industry abused their discretion. They didn't send in all the medical records, wouldn't tell what they were actually paying ... so it got to the point where we are now."
Pocius, who was instrumental in developing CMS guidances, says another problem ensued when the issue of medications came under the purview of Medicare. "The policy I drafted was, if you submit a reasonable amount the agency will accept it. It couldn't have been easier," he said. "The industry started undercutting. They only priced for four years instead of 20, and on and on and on."
Pocius says frustrations with the CMS process can be corrected, though not by the current legislation. He espouses the following ideas:
- Impose a deadline for approval of the CMS set-aside. "If there was a 90-day hard deadline, it would be resolved," he said.
- Have an annual price guide issued by CMS for the 50 most popular medications in the MSA.
- Have CMS become more open to negotiating and talking to the insurance industry to come up with workable solutions.
- Develop a streamlined system for getting conditional payment amounts. "Their system is so byzantine," he said. "That should be changed. What they have now is not working."
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June 18, 2012
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