Updated CMS Policy Changes Medicare Set-Aside Seed Calculation

April 29, 2021

book marked by sticky notes illustrating changes Section 111 reporting on ORM

An updated CMS policy change to the Workers’ Compensation MSA Reference Guide changes the Medicare Set-Aside seed calculation

On April 19, 2021, the Centers for Medicare and Medicaid Services (CMS) released an updated Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide, Version 3.3, which made a slight but notable addition to how the Medicare Set-Aside seed calculation seed amount is determined.  Specifically, CMS now requires the MSA seed amount to include the cost of the first surgery/procedure for each body part.  Previously, CMS accepted only one surgery in the seed even when there were additional surgeries for other body parts in the MSA allocation.

When settling parties choose to fund the MSA with an annuity, there is an initial deposit called the seed amount. The seed amount, under the prior rule, included the first two years of annual payments and, when applicable, the cost of the first surgery/procedure, the first replacement DME if the cost exceeds $500 and sometimes injections.

For example, an overall Medicare Set-Aside amount of $100,000 might breakdown to a $25,000 seed amount (with one surgery) with the remaining $75,000 placed in an annuity.

Under the new rule, requiring the Medicare Set-Aside seed calculation amount to include the first surgery for each body part does not change the overall MSA amount, but it puts more funds in the seed amount and less in the annuity. With the annuity less, the cost to the employer or carrier to fund the MSA will be more. In other words, taking the above example, where previously the seed amount was $25,000 (to include one surgery), the seed may now be $45,000 (to include two surgeries) with the annuity only funding $55,000.

CMS also made some other minor changes in this updated guide:

  • Updated the link to the CDC Life Expectancy table used by CMS (Section 10.3)
  • Added language confirming medication refills should be included when pricing intrathecal pumps (Section 9.4.5)
  • Noted that a Consent to Release “must be signed (by hand or electronically) with the full name of either the claimant, matching the claimant’s legal name, or by the claimant’s authorized representative, if documentation establishing the relationship is also provided. It must be a full signature, not initials.” (Section 10.2)
  • Clarified section regarding access to cases via the WCMSA Portal for Professional Administrators that were not the original submitters (Sections 16.2 and 19.4)
  • Updated the Major Medical Centers table for a Missouri entry (Appendix 7)
  • Added disclaimer to Appendix 4 stating that CMS does not endorse any of the listed products it uses for reference in calculating the MSA.
  • Noted that Conduent Strataware® was added to Appendix 4 as a tool for repricing medical bills to state mandated fee schedules, as well as usual, customary and recommend rates.

If you have any questions about these updates, please contact Tower’s Chief Compliance Officer, Dan Anders, at daniel.anders@towermsa.com or (888) 331-4941.

Related Prior Posts:

CMS Adds New Pricing Resource to WCMSA Reference Guide

CMS Expands MSA Amended Reviews & Modifies Consents to Release in Updated Reference Guide

Tower MSA Partners Completes SOC 2 Type II Audit

April 28, 2021

logo for AICPA. which conducts the SOC 2 Type II Audit

In our unwavering commitment to data privacy and security, Tower MSA Partners has completed its SOC 2 Type II audit. The SOC 2 Type II audit reports on a service organization’s non-financial reporting controls and processes as they relate to the Trust Services Criteria developed by the American Institute of Certified Public Accountants (AICPA). It tests the organization’s controls related to security, availability, processing integrity, confidentiality, and privacy over an extended period of time.

From the beginning, Tower has been committed to technology driven processes to bring efficiency and measured results to our clients.  The SOC 2 Type II attestation demonstrates how our corporate governance effectively assesses and manages risks and ensures the integrity of the systems and processes delivered by Tower and its business partners to execute the same high level of protection throughout the supply chain.  I’m extremely proud of this leadership team and its accomplishments.

Conducted by KirkpatrickPrice, the audit verified the fairness of the presentation of management’s description of the service organization’s system and the suitability of the design and operating effectiveness of the controls to achieve the related control objectives included in the description throughout a specified period.

“Tower delivers trust-based services to their clients, and by communicating the results of this audit, their clients can be assured of their reliance on its controls,” said KirkpatrickPrice President Joseph Kirkpatrick.

Related Prior Posts:

Tower MSA Partners Receives SOC 2 Type I Attestation

Building a Better Tower

CMS Updates Section 111 Model Language Form

April 26, 2021

Man signing a document to illustrate CMS updates to Section 111 Model Language Form

Recently, the Section 111 Model Language form was updated by the Centers for Medicare and Medicaid Services (CMS), The form is used by Responsible Reporting Entities (RREs) to collect the Medicare Beneficiary Identifier (MBI) and/or a Social Security Number (SSN) from claimants.  The SSN or MBI, along with the claimant’s First and Last Name, Gender, and Date of Birth, are needed by the RRE to query CMS to determine whether the claimant is a Medicare beneficiary for Section 111 Mandatory Insurer Reporting purposes.

The most notable change to the form is that the Section I language was revised from “Are you presently, or have you ever been, enrolled in Medicare Part A or Part B?” to “Are you presently, or have you ever been, enrolled in Medicare?” We assume this language was modified because the claimant’s enrollment in Parts A, B, or C (which isn’t even mentioned) is irrelevant for purposes of Section 111 reporting. The simpler language, just asking for Medicare enrollment status, should avoid confusion that may have arisen from the prior language.

Practical Implications of the Section 111 Model Language form

As we wait for CMS to issue final rules around mandatory insurer reporting penalties, it is important for RREs and those administering claims for RREs to collect this identifying information or document their efforts to collect it by using this model language.  As we discussed in CMS Issues Proposed Rule for Mandatory Insurer Reporting Penalties, RREs will have a safe harbor from reporting penalties if they document good faith efforts to attempt to obtain an MBI or SSN from the claimant, and this model form will help document those efforts.

Please contact Dan Anders at Daniel.anders@towermsa.com or (888) 331-4941 with comments or questions.

Related Posts

Section 111 Reporting

Dan Anders in WorkCompWire: Avoiding Section 111 Reporting Penalties

 

CMS Section 111 Mandatory Insurer Reporting Webinar Recap

April 7, 2021

man on keyboard for Section 111 Mandatory Insurer Reporting

Leaders from the Centers for Medicaid and Medicare Services (CMS) Division of MSP Program Operations, Commercial Repayment Center (CRC), and Benefits Coordination and Recovery Center (BCRC) held an April 1 webinar on the intersection of the BCRC and CRC in Section 111 Mandatory Insurer Reporting and the resolution of Medicare conditional payments.

While mostly a Q&A format, the webinar unveiled a new CMS/BCRC policy for reporting partial settlement of medical when Ongoing Responsibility for Medical (ORM) ends for certain diagnoses and continues for others. Set to rollout in June, the new reporting policy provides for three scenarios:

  • Partial settlement of medical prior to initial reporting

Scenario:  Claimant is identified as a Medicare beneficiary which triggers the requirement to report ORM and/or Total Payment Obligation to the Claimant (TPOC) through the Section 111 reporting process.  Both ORM and TPOC are for the same insurance type, policy, and claim number.  The only difference is the accepted and denied diagnoses on the claim.  The parties agree to a partial settlement for the denied diagnoses and leave the accepted diagnoses open on the claim.

Problem:  How to report a partial settlement of the denied diagnoses and still report ORM for the accepted diagnoses.

 CMS Solution:  CMS’s solution is to submit two add records. Specifically, one record will be added for ORM that will describe all of the diagnoses that have been accepted for ORM.  ORM will be ‘Y’ with no TPOC date or amounts.  A second record will be added for TPOC which will describe all of the denied diagnoses that are being settled.  ORM will be ‘N’ with a TPOC date and amount.

  • Partial settlement of medical post initial reporting

Scenario:  A claim with multiple diagnoses was reported for ORM through the Section 111 Mandatory Insurer Reporting process.  The parties agree to a settlement for certain diagnoses while keeping ORM open for other diagnoses.

Problem:  How to report a partial settlement for certain diagnoses while keeping ORM open for the non-settled diagnoses.

CMS Solution:  CMS’s solution is to submit one update record and one add record.  The update record will remove the diagnoses that are subject to the partial settlement and keep the diagnoses codes where ORM continues.  Then, an add record with the TPOC date, amount and diagnoses codes that are subject to the partial settlement will be submitted.  ORM will remain “N” in the add record.

  • Partial ORM closure with no settlement

Scenario:  Acceptance of ORM is initially reported though the Section 111 Mandatory Insurer Reporting process with multiple diagnoses.  Subsequent to this initial report, there is a basis to terminate one or more of the initially accepted diagnoses, but not all of the diagnoses.  This is not a situation where a partial settlement has occurred, rather there is a basis to terminate one or more diagnoses absent a settlement.  For example, a claimant’s cardiac condition was exacerbated as a result of a fall and the medical providers confirm resolution of the exacerbation. While the carrier continues to accept the orthopedic condition, the ORM can end for the cardiac diagnosis.

Problem:  How to end ORM for one or more diagnoses while keeping it open for other diagnoses.

CMS Solution:  CMS’s solution is to send an update record that removes the diagnosis or diagnoses where ORM has ended. In this situation a TPOC date is not submitted, rather this is only submitted when ORM is completely terminated for all diagnoses.

The purpose behind these new policies is to improve coordination of benefits such that a Medicare beneficiary’s medical care is not denied when unrelated to a claim and prevent the recovery contractors from attempting to seek reimbursement for Medicare payments unrelated to a claim.

While we thank CMS and the BCRC for identifying solutions to the above reporting problems, we believe RREs may face some technical challenges in the ability to, for example, report two add records on the same claim.  We await issuance of the formal policy from CMS and will review how this policy change can best be incorporated into the Section 111 reporting process.

In addition to announcing the new reporting policy, CMS and the contractors provided the following advice:

Respond to correct contractor – Carefully review the correspondence and make sure to respond to the contractor that sent the letter, whether it’s to obtain further information, dispute/appeal charges, or to make payment.

As a reminder, CMS noted, the BCRC is generally recovering conditional payments when the identified debtor is the Medicare beneficiary while the CRC is recovering conditional payments when the insurer/WC carrier is the identified debtor.

CMS provided the following guidance regarding key timeframes:

  • Interest accrues from the date of the demand letter and is assessed on debt if not resolved within 60 days.
    • When CMS issues a demand letter directly to the applicable plan, the applicable plan has formal administrative appeal rights.
    • The applicable plan has 120 days from the date the applicable plan receives the demand letter to file a redetermination (first level of appeal). Interest will still accrue during this time.
    • If the appeal is not filed within 120 days, and “good cause” for untimely filing is not provided, the appeal will be dismissed.
    • Failure to resolve the debt will result in referral to treasury at 180 days.

Note:  When you are appealing to the ALJ please be sure to cc the CRC so that they can appropriately place a hold on a case so that it is not referred to treasury while the appeal is in process.

During the Q&A portion of the webinar CMS and its contractors addressed varied questions; some are summarized below:

  • What can be done if we cannot obtain a Social Security number from the claimant? CMS advised them to document their efforts at obtaining the SSN.  It was noted CMS has model language found on the CMS website which can be used to document claimant’s refusal to provide SSN.
  • In response to a question concerning the many charges found on conditional payment notices and demands that are unrelated to the injury, CMS/CRC acknowledged that it is not a perfect process. The CRC explained that when conditional payment information is requested what is sent to the requestor may have only been produced through an automated search of charges related to the injury.  CRC did advise that when it comes to actual issuance of a demand that there is a human validating process.
  • In response to a question concerning why in response to a dispute of a Conditional Payment Notice, one might receive another CPN with new charges, the CRC explained that this is the result of the system constantly reviewing for additional charges deemed related to the injury.
  • There were several questions regarding problems with the CRC recognizing out-of-pocket reimbursements to claimants in a no-fault/med-pay claim as counting towards the exhaustion of the no-fault maximum amount. CRC’s response was to advise entities to provide plan documents and proof of payment to the claimant along with a reason for the payment.  Its leader said, “We are aware that no-fault payors have run into problems with CRC rejecting out-of-pocket expenses as included within the no-fault exhaustion amount.”

If you have any questions, please contact Tower’s Chief Compliance Officer, Dan Anders, at daniel.anders@towermsa.com or 888.331.4941.

Related prior posts:

CMS RELEASES TECHNICAL UPDATES TO SECTION 111 USER GUIDE

Tower MSA Partners Ready to Steer Clients Through Pending Section 111 Civil Money Penalties

April 1, 2021

View from Dashboard over highway to illustrate Section 111 Civil Money Post

Last year the Centers for Medicare and Medicaid Services (CMS) proposed regulations on Section 111 civil money penalties (CMPs). See Tower MSA Partners’ detailed prior post, CMS issues Proposed Rule for Mandatory Insurer Reporting Penalties related to inaccurate or untimely Section 111 Medicare Mandatory Insurer Reporting. Some of these are shocking – up to $1,000 per day per claimant in some cases.  Tower and others in the Medicare Secondary Payer (MSP) industry collaborated on comments to CMS’s proposal.

Then, Tower went well beyond simply responding to CMS.  We took proactive measures to prepare our clients for the eventual penalties. We educated clients with a webinar focused specifically on the subject matter, and we have communicated frequently.

Tower’s proprietary tech tools help prevent Section 111 Civil Money Penalties

In addition to education and communication, with Tower’s focus on technology to measure, manage and drive results, we built a dashboard to steer our clients through MSP compliance so they can avoid CMPs when they go into effect.  See our news release for details: Tower MSA Partners Releases Medicare Mandatory Reporting Dashboard.

Our S111 Management Dashboard gives you the 24/7 data and reporting oversight for every aspect /of the reporting process.  Workers’ compensation and liability payers usually have limited visibility into claims history through their Section 111 providers’ reporting systems.  They may receive compliance error reports but aren’t able to quickly verify compliance accuracy.  Few systems remind responsible reporting entities to update the ongoing responsibility for medicals (ORM) termination dates when claims are settled.

The dashboard gives clients full visibility into their claims from a global level all the way down into the details of a specific claim.  You can manage the accuracy of data, such as ICD 10 codes or ORM to avoid unnecessary conditional payment or MSA exposure in addition to avoiding CMPs.

“The dashboard is intuitive and simple to use,” said Todd Venneri, Business Intelligence Project Manager for BETA Healthcare Group, who tested its features. “The ability to quickly access and verify claim information is invaluable.”

While our intuitive S111 Management Dashboard was being developed, we also updated our client portal and MSP Automation Suite. Keep in mind, Tower’s system was built specifically by us for this industry.  It seamlessly manages Section 111 reporting, conditional payments, Medicare Set-Aside triage, clinical and legal interventions, MSA preparation, and CMS submission activities that take clients through settlement and closure.

We don’t know when CMPs will be announced or how Section 111 civil money penalties will be assessed.  What we do know, however, is that our clear, concise dashboard has replaced uncertainty with knowledge and information.

We are ready and we want you to be ready, too.  If you have not used the dashboard yet, take it for a spin.  Get in touch with Hany Abdelsayed at hany.abdelsayed@towermsa.com or 916-878-8062 for a demo.