Watch for potential changes to Medicare set-aside processes

Doing business with the Centers for Medicare and Medicaid Services got somewhat easier in 2012, according to a legal expert. But workers' comp practitioners should be attuned to upcoming decisions and actions by the agency that could require changes for Medicare set-asides.

"The Veterans Affairs Department is stepping up its collection efforts," said James Pocius, a shareholder with Marshall, Dennehey, Warner, Coleman & Goggin in Philadelphia and chair of its Medicare Set-aside Practice Group. "That could have a significant impact on the workers' comp system."

As a veteran workers' comp and liability attorney handling cases with Medicare recipients, Pocius has written many of the CMS' guidances on Medicare for the workers' comp system. He offers his insights on recent changes to the system and says decisions expected soon could affect MSAs as they relate to workers' comp. Additionally, Congress has passed and the president has signed legislation aimed at streamlining the process.

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Improved efficiencies. "Conditional payment processing is becoming more efficient," Pocius said. "The Medicare Secondary Payer Recovery Contractor, the subcontractor on conditional payments, has a contract with the agency that binds them to produce a conditional payment letter within 65 days after the Rights and Responsibility letter is issued. My experience in the last six months is once the letter has been issued, I've been getting conditional payments within 20 to 30 days."

The Rights and Responsibilities letter is sent to the claimant by the MSPRC as soon as the claimant's case has been reported. The CMS recently opened a self-service information line and ramped up its electronic access, both of which have expedited the process.

MSA structures. "At the end of 2012, the workers' comp review center for Medicare set-asides sent out expedited decisions," Pocius said. "As a result, the parties were allowed to put their own structure figures into approved Medicare set-asides."

As he explains it, the agency previously would review the MSA to determine whether additional payments or seed money were adequate. If CMS determined the seed money should be changed, the MSA would need to be changed.

"This change allowed us to have some certainty on your structure," Pocius said. "Some companies would structure their MSAs before they got approval and would have to change the structure, if CMS changed the seed money by even $1. It streamlined the process. I'm hoping it will continue into the new year."

Liability cases. "In 2013 we should see regulations controlling MSAs in liability," Pocius said. "The agency proposed regulations in the fall, but we have not received any response to the commentary that the agency solicited."

The decision should give more formal structure to MSAs in liability cases "and take away the uncertainty, much like in workers' comp -- with monetary restrictions or time limit restrictions and more direction as to when a MSA is necessary in a liability case."

Texas opt-out cases. Employers in Texas that choose to non-subscribe to the workers' comp system may face challenges if their injured workers are Medicare beneficiaries. The concern could spread to additional states such as Oklahoma that are considering legislation to allow employers to opt out of the state-based workers' comp system.

Where workers' comp has guidances and specific procedures, liability is still up in the air. As Pocius explains, the CMS has not determined whether it will treat such cases as liability or workers' comp.

"The agency has indicated that the litigants' responsibilities to Medicare are the same whether it is a liability or workers' comp case. However, in liability cases, they are not giving the litigants the security you would get in workers' comp because they won't review the claim," he said. "To date, CMS has reviewed the opt-out cases as if they are normal, workers' comp cases, which in my opinion is the correct way to go. If they don't treat it as a workers' comp case you have a problem because you can't extinguish Medicare's interest necessarily."

VA, Medicare advantage. "The VA is seeking additional sources of income," Pocius said. "I've got letters saying the law gives them almost the same rights as Medicare."

According to the attorney, the VA has subrogation rights that could impact the workers' comp system, especially with increasing numbers of veterans in the workforce.

An additional potential concern for the workers' comp community is a recent appellate court decision regarding Medicare advantage plans. For the past decade, there has been no direct cause of action against a workers' comp carrier that settled a case. Unlike Medicare, the Medicare advantage plans could not demand payment from the carrier after the fact.

Under the ruling, these plans have the same rights of recovery "so unless you satisfy them, litigants will still have open responsibility," Pocius said. Since the decision he's had to tell clients to respond to Medicare advantage plan inquiries. "The litigants have to have something proving the Medicare advantage plan has been paid back. Otherwise, the Medicare advantage plan could come back and say, 'pay us again,' just like Medicare."

Read more at the WorkersComp Forum homepage.

February 11, 2013

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