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MMSEA: Hurry Up and Wait for the Feds. The Round-Up…. Moderator: Thomas Paschos, Esq. , Partner, Thomas Paschos & Associates, P.C. Panelists: Tom Blackwell, MSCC , National Vice President of Sales, Gould & Lamb, LLC Theresa J. Bradley, Esq. , Staff Attorney, ProAssurance Corporations

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MMSEA: Hurry Up and Wait for the Feds

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Mmsea hurry up and wait for the feds

MMSEA:

Hurry Up and Wait for the Feds


The round up

The Round-Up…

Moderator:

  • Thomas Paschos, Esq., Partner, Thomas Paschos &Associates, P.C.

    Panelists:

  • Tom Blackwell, MSCC, National Vice President of Sales,

    Gould & Lamb, LLC

  • Theresa J. Bradley, Esq., Staff Attorney, ProAssurance Corporations

  • James Reed, Esq., Associate General Counsel, Loyola University Health System

  • Michael C. Stinson, JD, Director of Government Relations, Physician Insurers Association of America


Medicare as a secondary payer

Medicare as a Secondary Payer

  • Insurer is responsible for paying medical expenses

    • “Responsible” = when case has settled or goneto verdict

  • Medicare either does not pay OR

  • Medicare pays conditionally

    • Insurer, plaintiff or attorney has to reimburse Medicare


  • Present day medicare

    Present Day Medicare

    • Medicare is under funded

    • CMS wants its money

    • No consistent way for Medicare to discover claims

    • MMSEA Section 111

      • Payers required to report claims


    Penalties for failure of insurer to reimburse medicare

    Penalties for Failure of Insurer to Reimburse Medicare

    • Medicare has a claim, not a lien

    • Medicare can sue the insurer, plaintiff &plaintiff’s attorney

    • Double damages under the SSA

    • Treble damages under the FCA

      (All in addition to fines for failure to report)


    Medicare secondary payer act m s p

    Medicare Secondary Payer Act (M.S.P.)

    • Omnibus Reconciliation Act of 1980.

    • MMA 2003, Title III, §301

      • Acceptance of Liability not needed

    • Medicare-Secondary Payer Status-all linesof insurance

    • WC primary to Medicare since 1965


    Medicare secondary payer act m s p cont d

    Medicare Secondary Payer Act (M.S.P.) cont’d

    • Liability and No-Fault insurers

      • Responsible to protect Medicare’s interest

    • MSP gives Medicare two rights:

      1. Right of Recovery

      2. Consideration for Future Medicals


    Medicare secondary payer act section 111

    Medicare Secondary Payer Act & Section 111

    • Carriers and self-insurers can suffer penalties

    • Delayed Settlements – increased adjudication

    • Medicare is ready to move forward

    • Reporting began 10/1/2010

    • MSP compliance is their main focus

    • Settlement language is critical


    Medicare medicaid and schip extension act 2007

    Medicare, Medicaid, and SCHIP Extension Act (2007)

    • MMSEA is government’s method to enforceMSP rights

    • Requires insurers to “vet” Medicare statusof plaintiffs

    • The reporting requirement carries heavy penalties

    • Data is being reviewed by third parties

    • Timing is critical


    Penalties for failing to report

    Penalties for Failing to Report

    • Subject to a $1000 / day fine.

    • Penalty can be assessed for data integrity issues.

    • Only 1 period per quarter that you can send data

    • Miss that opportunity? The penalty will be atleast $90,000!


    Underwriting implications mmsea and msp

    Underwriting Implications: MMSEA and MSP

    • Increased uncertainty regarding loss development pattern

    • Limited actuarial information regarding cost implications

      • Increased claims handling costs

      • Increased claims settlement values

      • Increased no-fault payments

      • Increased defense costs


    Assessing risks associated with medicare mmsea

    Assessing Risks Associated with Medicare & MMSEA

    • Cost implications

    • Insured’s medical specialty

    • Insured’s venue

    • Jurisdictional limits of liability


    Understanding the medicare and lien process

    Understanding the Medicare and Lien Process

    • Major steps in the lien process:

      • Report claim to Medicare

      • Request a “conditional payments” letter

      • Determine payments “related” to claimed injury

      • Report settlement to Medicare

      • Obtain “final demand” letter from Medicare

      • Pay Medicare’s claim or appeal determination(60 days to appeal)


    Importance of medicare lien process

    Importance of Medicare Lien Process

    • It slows the claims process:

      • Increased time for resolving cases

      • Requires additional discovery related solely to Medicare data

      • May need to adjust indemnity and expense reserves

      • Cases with large medical specials may require Medical Set Asides


    Importance of medicare lien process1

    Importance of Medicare Lien Process

    • Creates difficulty evaluating risks:

      • Files open longer (more open at a given time)

      • Difficult to obtain information on pending claims

      • Difficult to assess risks with little claims information


    Proassurance satisfying mmsea reporting requirements

    ProAssurance –Satisfying MMSEA Reporting Requirements

    • Designated a Medicare compliance attorney

    • Redesigned claims system to capture required data

    • Drafted claims procedures to ensure compliance

    • Conducted employee and defense attorney education

    • Information Systems created programs to automate the reporting


    Involvement with cms

    Involvement with CMS

    • Consulted with CMS from the start

    • Explained Medical Professional Liability insurance to them

    • One-on-one meetings

    • Industry meetings


    Mmsea hurry up and wait for the feds

    CMS

    • Will be overwhelmed by reporting

    • Guidance will continue to change

    • May seek change to legislative authority


    Mmsea hurry up and wait for the feds

    CMS

    • Trying to be realistic

    • Wanted to accommodate industry (somewhat)

    • Had no idea how P/C insurance worked


    Implementation of reporting requirements

    Implementation of Reporting Requirements

    • Even after a company complies; you may still not be able to relax:

      • Guidance may change at any time

      • Continue to monitor CMS

      • Must be focused on MSP issues now


    Congress reaction to reporting requirements

    Congress Reaction to Reporting Requirements

    • Remains to be seen

    • Nothing this year

    • Legislation this year could be base for 2011 action

      • Medicare Secondary Payer Enhancement Act

      • Requires Medicare to promptly respond to demand letters

      • $5,000 threshold for reimbursement

      • Safe harbors for reporting

      • No SSN requirement

      • User fees to pay for system


    Medicare enforcement nationwide

    Medicare Enforcement - Nationwide

    • CMS will probably allow for an “adjustment period”

    • Within 6 months, CMS will expect compliance

    • CMS are likely to refer claims to DOJ when insurers:

      • Should have known about a claim

      • Knew of a claim & intentionally failed to report 


    Medicare enforcement regional

    Medicare Enforcement - Regional

    • “Tough” regions include Chicago & East Coast

    • Southern regions (Dallas/Atlanta) known to “negotiate”

    • Recent trend– coordination & cooperation among regions:

      • Establish consistent thresholds

      • Handle all similar cases similarly


    Who has exposure

    Who Has Exposure?

    • Anyone involved in the claims process

    • In practice:

      • Any source of payment (insurers/self-insured entities) is highly exposed

      • CMS and DOJ rarely actively pursue patients/claimants and their attorneys


    Insurers how to avoid litigation and ensure compliance

    Insurers – How to Avoid Litigation and Ensure Compliance

    • Don’t get complacent

    • Monitor CMS for guidance changes

    • Get active with Congress


    Insurers how to avoid litigation and ensure compliance1

    Insurers – How to Avoid Litigation and Ensure Compliance

    • Develop Compliant Settlement Language

    • Record all attempts to collect MMSEA data

    • Initial claimant - include request for 5 fields

    • Start MSP compliance process early


    Insurers how to avoid litigation and ensure compliance2

    Insurers – How to Avoid Litigation and Ensure Compliance

    • Familiarize yourselves with the reporting requirements

    • Designate a compliance specialist

    • Develop systems within claims department to obtain and capture data

    • Develop safety net to ensure compliance

    • Educate staff and defense attorneys

    • Educate plaintiffs’ bar


    Self insured s how to avoid litigation and ensure compliance

    Self Insured's - How to Avoid Litigation and Ensure Compliance

    • Insist that your attorneys protect your interests when payment is made:

      • Issue a multi-party check (Medicare as a payee)

      • Demand indemnity language in the release

    • Take advantage of CMS resources:

      • Computer-based, on-line training

      • Town hall conference calls

      • CMS, MMSEA Section 111 web site


    Self insured s how to avoid litigation and ensure compliance1

    Self Insured's - How to Avoid Litigation and Ensure Compliance

    • Make sure your defense attorneys are MMSEA/MSP educated

    • Include Medicare compliance language in all settlement documents

    • Collect query Data early in Claim’s Life Expectancy

    • Keep records of all attempts to collect data.


    Avoiding litigation and ensuring compliance

    Avoiding Litigation andEnsuring Compliance

    • TPAs and attorneys:

      • Inform clients of handling protocols forMedicare claims

      • Develop Compliant Settlement Language

      • Record all attempts to collect MMSEA data

      • Initial claimant contact should include requestfor 5 fields

      • Start the MSP compliance process early


    Preventing actions and ensuring compliance

    Preventing Actions and Ensuring Compliance

    • Notify Medicare of claim prior to reporting

    • Take steps to ensure Medicare reimbursement/ set-aside


    Preventing actions and ensuring compliance1

    Preventing Actions and Ensuring Compliance

    • Report Timely

    • Keep Records

    • Verify data

    • Strictly follow your handling protocols,once established


    Preventing actions and ensuring compliance2

    Preventing Actions and Ensuring Compliance

    • Establish strong professional relationship with contractor

    • Your reputation at claims professional level is very valuable

    •  Establish a process to identify every potential claimant

    • Catch all claimants who become Medicare eligible during pendency of case


    Predictions effect on industry tpa attorneys claims

    Predictions – Effect on Industry/TPA/Attorneys/Claims

    • Crippling effect on settlement negotiation process

    • Increased frustration

    • Initial confusion and mistakes (on both sides)

    •  Eventually will become part of business process


    Predictions effect on industry tpa attorneys claims1

    Predictions – Effect on Industry/TPA/Attorneys/Claims

    • More Clients from liability and auto

    • More E&O issues

    • Claim Frequency will diminish

    • Severity will increase

    • Case management will become a priority forall lines

    • No long term effect on number of settlements


    Predictions costs

    Predictions - Costs

    • Increased settlement values

    • Increased defense costs

    • Increased business costs


    Predictions future enforcement by the government

    Predictions – Future Enforcement by the Government

    • Concern is “bundling” of claims with insurers on the hook for all reimbursements

    • No dramatic change

    • Congress still wants Medicare to be solvent

    • “Fixes” may be possible - bipartisan

    • 2012 election will dominate agenda – spending will be the key issue


    Questions answers

    Questions&Answers


    Many thanks to

    Many Thanks To…

    • Thomas Paschos, Esq., Thomas Paschos & Associates, P.C.,

      PH: 215-636-5555/856-354-1900; E-Mail: [email protected]

    • Tom Blackwell, MSCC, Vice Pres. of Sales, Gould & Lamb, LLC.

      PH: (941) 798-2098; E-Mail: [email protected]

    • Theresa J. Bradley, Staff Attorney, ProAssurance Companies

      PH: 205.877.4466; E-Mail: [email protected]

    • James L. Reed, Jr., Associate General CounselLoyola University Health SystemPH: (708) 216-3708; E-Mail: [email protected]

    • Mike C. Stinson, JM, Director of Government RelationsPhysician Insurers Association of AmericaPH: 301.947.9000; E-Mail: [email protected]


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