Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) Overview Carolina RIMS September 2009

1. Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA)OverviewCarolina RIMSSeptember 2009

2. Presenters Steve Dalton, Chartis, VP - Home Office Workers Compensation P.O. Box 3115 Alpharetta, GA 30023 Work:  (770) 870-2350 FAX:  (866) 281-1835 E-mail:  STEVE.DALTON@chartisinsurance.com Tom Thornton, Esq. Carr, Allison, Pugh, Howard, Oliver & Sisson 100 Vestavia Parkway Birmingham, AL 35216 Phone: 205-822-2006 FAX:    205-822-2057 E-mail: tthornton@carrallison.com Tom Blackwell, MSCC Gould & Lamb, LLC. Phone: (941) 798-2098  Ext. 1340 Cell:     (941)447-6814 FAX:    (941) 798-3403 E-mail: tom.blackwell@gouldandlamb.com

3. Steve Dalton, Chartis, VP - Home Office Workers Compensation P.O. Box 3115 Alpharetta, GA 30023 Work:  (770) 870-2350 FAX:  (866) 281-1835 E-mail:  STEVE.DALTON@chartisinsurance.com

4. Background Effective in the second quarter of 2010, Medicare will for the first time require insurers and self insureds on all Liability, Workers’ Compensation and No Fault claims to report all settlements, judgments and awards completed after January 1, 2010 and all claims for which ongoing responsibility for medical (ORM) has been assumed or continues after July 1, 2009 involving a Medicare recipient to the Center for Medicare and Medicaid Services (CMS). Why? According to CMS… This reporting requirement is being implemented for the purpose of providing the federal government with a greater ability to enforce the provisions of the Medicare Secondary Payer (MSP) Act of 1980, which required that where there was a policy of insurance in place to cover medical treatment of the claimant, the insurance carrier would be the primary payer for that treatment in cases where the claimant was also eligible for Medicare.

5. Historical Perspective • Medicare Act passed in 1965 • Workers’ Compensation – primary payer • Medicare Secondary Payer Statute – 1980 • To protect the financial integrity of the Medicare Trust Fund • Added other Primary Payers • Liability • No-Fault • Self-insureds • GAO study released 1999 found $40-43 billion paid by Medicare during 7 year period that should have been paid by primary payers • Centers for Medicare & Medicaid Services (CMS) published first of series of memoranda providing direction to workers’ compensation for the protection of the interests of Medicare • Medicare & Medicaid SCHIP Extension Act of 2007 (MMSEA)

6. Responsible Reporting Entities (“RRE”) • An RRE is defined as the administrator or fiduciary of: • Liability insurance including self-insurance • No fault insurance • Workers’ compensation insurance • All RRE’s must register as a first step in compliance with MIR

7. Who is the RRE? • Generally, the entity paying benefits directly is the RRE • In guaranteed cost policies, the insurer is the RRE • In deductible policies, if the insurer is paying benefits directly and receives reimbursement from the insured within the deductible, the insurer is the RRE • In the case of a settlement, if the settlement exceeds the deductible and the insurer pays, the insurer is the RRE • Self-insureds without recourse to insurance are the RRE • Third party administrators are not the RRE for liability (including self-insurance), no-fault and workers’ compensation plans • If insured pays directly without recourse to existing insurance, the insured is the RRE • In Excess, Umbrella, Re-insurance, if the insurer begins paying benefits directly, the insurer is the RRE; if the insurer simply reimburses the insured, the insured is the RRE

8. Requirements and RegistrationSCHIP Mandatory Insurer Reporting By Tom Blackwell, Director of Strategic Services

9. Mandatory Insurer Reporting Required on all NGHP (Liability, No-Fault, Self, WC) and GHP claims Requires that primary payers check Medicare beneficiary status on ALL claims quarterly Requires reporting of ALL claims involving Medicare beneficiaries quarterly Requires reporting S/J/As on ALL claims involving Medicare beneficiaries “Contested” cases exception Applicable regardless of whether or not future medicals are closed

10. NGHP MIR Timeline RRE Registration between 5/1/09 and 9/30/09 Only 1 reporting agent, TPA is not the RRE At time of registration, reporting date established Testing of MQF from 7/1/09 to 12/31/09 Ensures Medicare verification process works properly Requires seven (7) fields of data Testing of Production Files from 1/1/10 to 3/31/10 Ensures 180+ field feed properly Requires massive claims system additions 1st live report between 4/1/10 and 6/30/10 $1000/day/claim penalty begins Retroactive reporting required from 7/1/09

11. RRE Registration • Am I an RRE? • Are you the funding source to the beneficiary? • How many RRE IDs do I need? • How many entities or systems handle my claims? • How will they report the claims they handle? • Can these claims be sent to a central repository? • How do I register with CMS? • Go to the web-site (authorized representative) • Get your PIN & Credentials via mail • Send to your Account Manager/Reporting Agent • Sign & Return your profile report from CMS

12. MIR Requirements What Claims are Reportable? Claims that involve Medicare Beneficiaries Doesn’t Include Medicaid SCHIP enrollment not a factor Types of Claims Reportable Work Comp/Liability/No Fault BI Professional Liability Malpractice (Med-Legal) Medpay - PIP

13. MIR Requirements Look Back Dates 1/1/2009 Claims removed from Active/Current status prior is not reported Will be reported upon next payment to claimant 7/1/2009 All currently open claims involving Medicare Claimants w/potential medical 7/1/2009 thru 1/1/2010 All Claims closed through settlement during this period must Claim but not TPOC amount

14. Medicare Eligibility Are You Closing or Limiting Future Medicals? • Identify claimant’s Social Security & Medicare Status • Is this a Class I Beneficiary? - WC only • Is this a Class II Beneficiary? - WC only • Class III ? – WC & GL • Adequate Consideration in cases not meeting thresholds • Liability/No Fault Claims • Medicare Claimants in settlements under $25,000 • Primary Payers are obligated under the law • No “Safe Harbors”

15. 101 Riverfront Blvd, Suite 100 Bradenton, FL 34205 866-672-3453 x 1340 tom.blackwell@gouldandlamb.com www.gouldandlamb.com Contact Information

16. Tom Thornton, Esq. Carr, Allison, Pugh, Howard, Oliver & Sisson 100 Vestavia Parkway Birmingham, AL 35216 Phone: 205-822-2006 FAX:    205-822-2057 E-mail: tthornton@carrallison.com

17. Concerns for the Industry: • Determination of Responsible Reporting Entity Status • Assess and assign exposure • Exam internal protocols and strategies for investigating and documenting claims • Exam protocols and strategies for evaluating, reserving and settlement of claims • Impact on litigation of cases

18. Responsible Reporting Entity • Definition • Registration • Timing • Elements

19. Assess and Assign Liability • Identify the players • Responsibility for fines • Renewals

20. Exam internal protocols and strategies for investigating and documenting claims • Is less more? • Determination of exposure • New claim handling protocols • Query function • Claimant is not a medicare recipient • Claimant is a medicare recipient

21. Exam protocols and strategies for evaluating, reserving and settlement of claims • Protection of Center for Medicare’s interest • Timing of settlements • Contingent agreements • Future exposure • Thresholds • Releases • Hardship application

22. Litigation • Burden upon defense bar • Burden upon plaintiff’s bar • Mediation/contingent agreements • Trial and judicial system

23. General Issues: • Recent extensions from Center for Medicare Services • Issues relating to worker’s compensation and ongoing responsibility for medical treatment • CMS alerts • Document retention protocols • Statute of Limitations for Federal Claims

24. Contact Information Steve Dalton, Chartis, VP - Home Office Workers Compensation P.O. Box 3115 Alpharetta, GA 30023 Work:  (770) 870-2350 FAX:  (866) 281-1835 E-mail:  STEVE.DALTON@chartisinsurance.com Tom Thornton, Esq. Carr, Allison, Pugh, Howard, Oliver & Sisson 100 Vestavia Parkway Birmingham, AL 35216 Phone: 205-822-2006 FAX:    205-822-2057 E-mail: tthornton@carrallison.com Tom Blackwell, MSCC Gould & Lamb, LLC. Phone: (941) 798-2098  Ext. 1340 Cell:     (941)447-6814 FAX:    (941) 798-3403 E-mail: tom.blackwell@gouldandlamb.com