Current Issues & Trends Related to MSA/MSP Compliance
This panel at the California Workers Comp & Risk Conference in Dana Point addressed current issues and best practices in regards to Medicare Secondary Payer (MSP), Medicare Set Asides (MSA) and Section 111 reporting.
Panelists were moderater Mark Walls, VP Communications & Strategic Analysis at Safety National, Rafael Gonzalez, Vice President at Helios, Jessica Smythe, National Medicare Compliance Consultant at ISO Claims Partners, Melisa Zwilling, Medicare Compliance Chair at Carr Allison, and Marie Henry, Staff Counsel at ExamWorks.
The session followed a Q&A format that dove into issues that are making this a complex topic.
Whistleblower lawsuits are becoming a trend, as Federal law allows the general public to file these lawsuits on behalf of the government if they think MSP misconduct was committed. What do you think about these lawsuits?
The panel agrees that these type of lawsuits are “scary” and most are unfounded. There are currently two pending cases that are seeking damages for what they believe is fraudulent MSP activity. These cases have could have significant exposures if they are not dismissed. The panel reports that they are still in the pleading stages and will, hopefully, get dismissed, citing that some of the allegations are completely false. One very troubling case involves whistleblower lawsuits that were filed by a MSP consultant who sued companies that did not retain his services.
The panel does not agree with making the general public the “Medicare Police”. They noted that the person bringing the suit has to have knowledge that there was an absolute wrong against the government. If you read the lawsuits, you will see this doesn’t exist in those cases. First, people have to be on Medicare to file a suit. Second, you can’t file a lawsuit just because the company didn’t do an MSA. There has to be proven fraud.
The panel notes that there are two types of lawsuits: 1) filed under the False Claims Act or referred to as “Whistleblower” and 2) failure for the workers’ compensation carrier to reimburse medicare payments. Carriers are becoming very concerned with the second type of lawsuite because, in most cares, they have made the appropriate reimbursement, paid back the Medicare lien, but are still getting sued. The panel said there are several instances where carriers are doing nothing wrong, yet lawsuits are still being filed and the person suing is being awarded damages – often double damages.
The panel stated that carriers cannot always get information quickly enough from the Center for Medicare & Medicaid Services (CMS). Having a compliance program is paramount. No one is required to pay until a legal request has been issued and then they have 60 days to pay. The rules are that, if payment is not made, the carrier is responsible and defaults.
It takes proactive monitoring to make sure the carrier has lien satisfaction funds ready at the time of release. Make sure research is done and involve the claimant and their attorney so that they know the steps that the carrier is taking. The panel recommends that carriers start early, involve the all parties and communicate everything to the court as well. It is critical to address all of the issues in detail and make sure that you address everything far before it is time for settlement.
The panel referred to these “whistleblower lawsuits” as a game changer, citing that there is motivation to file these suits. When a carrier has to pay damages as a result of a lawsuit, half reimurses medicare and the other half is a “thank you” to the person suing to enourage the policing of taxpayer money. This can be quite an incentive. Even if the suits are dismissed, the litigation costs could be extensive.
The panel offered the case of Harrow vs. Sebelius in Arizona as a great case to review on this subject.
Should you get MSAs approved by CMS?
The panel was split on this question.
Some thought that, if the settlement meets the review threshold and you have the medical support to do that, then you should get it approved because it gives you that level of certainty.
Another panelist said that CMS doesn’t always give a realistic number and often asks for way more money than is needed.
Another said it is voluntary. No law says you have to do get CMS approval. If approval is going to be fairly easy, yes – do it. If you have a difficult case, do not send it to CMS because you know they will decline it. There is no reason to blow settlements over CSA denial that they will cause trouble over.
The final panelist said that every case is different and that it is a risk management decision. Attorneys should let the clients make that call. You don’t have to do it, but want clients to be afforded the ultimate level of protection. On the other hand, you don’t want to throw the client’s ability to close a claim off the rails.
There are a lot of new products out there like MSP insurance. Do we need this?
No, if you are insuring against something that is absolute law you would need this. But if you are trying to insure against something that is not a law, you do not need insurance against it. CMS approval is not req by law.
Another panelist disagreed, stating that the industry is trying to come up with options and solutions. This would protect against keeping Medicare out of the file. Buy this policy, then it may cover the difference if litigation happens and they award damages. It gives carriers yet another option to protect themselves. They pointed out that if someone is not sending a case to CMS for approval the policy could help hedge against any risk.
There is still a lot to be learned on these policies and how they will protect you. At minimum, it seems the policies will cover cost of defense and that alone may be worth the cost and peace of mind in purchasing the coverage.