CMS Prepares for Expansion of MSA Reviews, Postpones Release of Solicitation for Contractor

Posted by Rafael Gonzalez on Oct 19, 2016 10:02:00 AM

iStock_000040684534_Full.jpgOn February 22, 2016, the Centers for Medicare and Medicaid Services (CMS) announced their anticipated release of a solicitation for the Workers' Compensation Review Contractor (WCRC) on or about March 8, 2016. The announcement indicated the contract would be awarded on a Firm Fixed Price (FFP) basis and would include a 12 month base period plus (4) four one (1) year options. The anticipated proposal due date was to be April 8, 2016 with an anticipated award date of June 20, 2016.

The February 22, 2016 Pre-Solicitation Announcement

The announcement included a Medicare overview, which indicated “Medicare is a nationwide Federal health insurance program administered by CMS. Congress enacted Medicare in 1965 as Title XVIII of the Social Security Act (42 U.S.C. § 301 et seq.) for persons 65 years of age or older, certain younger disabled persons, and persons with end-stage renal disease (ESRD).” The announcement also explained “the Medicare program serves well over 43 million beneficiaries and processes over one billion claims per year. Fee-for-service (FFS), or traditional Medicare, consists of two primary parts: Hospital Insurance (HI) otherwise known as Part A, and Supplemental Medical Insurance (SMI) also known as Part B. A third part of Medicare, known as Medicare Part C or the Medicare Advantage (MA) program, was established by the Balanced Budget Act of 1997 (Public Law 105-33). It allows beneficiaries the option of receiving their Medicare benefits through private managed care plans and related kinds of organizations. Finally, the Medicare prescription drug program, also known as Medicare Part D, was enacted as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA).”

The announcement made it clear that the purpose of this contract is “to procure an impartial entity, not as an agent of the Federal government, to independently price the future Medicare-covered medical services costs related to the WC injury, illness, and/or disease and to price the future Medicare covered prescription drug expenses related to the WC injury, illness and/or disease thereby taking Medicare's payment interests appropriately into account.

The announcement also indicated that “the WCRC would, in accordance with CMS guidelines, evaluate workers' compensation Medicare set-aside arrangement (WCMSA) proposals and project the future medical costs, including prescription drugs, related to the workers' compensation (WC) injury, illness, or disease that would be otherwise reimbursable by Medicare. The contractor would, upon reviewing complete WCMSA proposals, recommend the WCMSA amount for each proposal to CMS for final determination.”

The announcement explained that “insurers, agencies, and attorneys have significant responsibilities under the Medicare Secondary Payer (MSP) provisions of the Social Security Act Section 1862(b) [42 U.S.C. 1395y] to protect Medicare's interests. Because Medicare does not pay for an individual's WC-related medical services and/or prescription drugs when the individual receives a WC settlement that includes funds for future medical and/or prescription drug expenses, it is highly critical that the individual consider Medicare's interests at the time of settlement. For this reason, CMS recommends that parties to a WC settlement set aside funds, known as a Workers' Compensation Medicare Set- Aside Arrangement (WCMSA) for all future medical and/or prescription drug expenses related to the WC injury or illness/disease that would otherwise be reimbursable by Medicare.

The April 15, 2016 Update Extending Release, Due, and Award Dates

On April 15, 2016, CMS provided an update to the previously posted February 22, 2016, pre-solicitation notice. The update indicated that CMS was adjusting the solicitation for the WCRC due to “updates to the Statement of Work (SOW) to include the processing of other Non-Group Health Plan (NGHP) Medicare Set-aside Arrangements.”

The update indicated that “CMS anticipated releasing a solicitation for the WCRC on or about June 27, 2016 as a full and open competitive 8(a) set-aside utilizing FAR part 15 procedures. The contract will be awarded on a Firm Fixed Price (FFP) basis and will include a 12 month base period plus four (4) one (1) year options. The anticipated proposal due date is July 27, 2016 with an anticipated award date of November 7, 2016.”

The June 8, 2016 Announcement to Expand the MSA Review Process

Although seemingly separate and away from the solicitation process, on June 8, 2016, CMS published an announcement on its website indicating that it would be “considering the expansion of its voluntary Medicare Set-Aside Arrangements (MSA) amount review process to include the review of proposed liability insurance (including self-insurance) and no-fault insurance amounts.” The announcement also indicated that CMS plans to “work closely with the stakeholder community to identify how best to implement this potential expansion.” The announcement also informed that “CMS will provide future announcements of the proposal and expects to schedule town hall meetings later this year.”

As many of you will recall, this is not the first time CMS has announced their intention to expand their voluntary MSA program to liability and no-fault cases. CMS published an Advance Notice of Proposed Rulemaking (ANPRM) on June 14, 2012, soliciting comments on standardized options to protect Medicare’s interest with respect to Medicare Secondary Payer (MSP) claims involving automobile and liability insurance (including self-insurance), no-fault insurance, and workers’ compensation when future medical care is claimed or the settlement, judgment, award or other payment releases (or has the effect of releasing) claims for future medical care.

The September 6, 2016 & October 4, 2016 Extension Announcements

With such intentions announced, it was not unexpected to see on September 6, 2016, CMS again amend its anticipated release date for the solicitation for the WCRC to on or about September 22, 2016. This latest change indicated that “CMS anticipated the proposal due date to be October 24, 2016 with an anticipated award date of February 8, 2017.”

On October 4, 2016, CMS again announced an update to its original February 22, 2016 pre-solicitation notice. This time CMS announced it “anticipates releasing a solicitation for the WCRC during the first quarter of FY 2017, with an anticipated award date in the second quarter of FY 2017.” 

MSP Compliance Best Practice for P&C Insurers

As I recently blogged about on September 30, 2016, in an article titled “P&C Insurers, Are You Ready for Mandatory Reporting, Conditional Payments, and Set Aside Allocations in Auto, No-Fault, and Liability Claims?,” I suspect CMS is working on a proposed set of federal regulations addressing each of the items I warned about in my blog. In other words, CMS may be extending its release of a solicitation for MSA review work as a result of its continuing work on rules and regulations that mimic my best practice recommendations for property and casualty insurers. Without such rules and regulations in place, the new contractor brought in to perform such reviews would have a very difficult time, or may be unable to review such proposals. Therefore, as CMS prepares such federal guidelines, I renew here my questions for all P&C insurers to consider in building a comprehensive MSP compliance program:

  1. Have you built a system or partnered with a vendor that allows you to determine how to take Medicare’s future interests into account, and if appropriate, when is the best time to create an MSA allocation?
  2. Have you built a system or partnered with a vendor that allows you to begin to look at life expectancy, future medical and prescription needs, as well as costs of these early on in the claims process?
  3. Have you built a system or partnered with a vendor that allows you identify Medicare Advantage Plans and Prescription Drug Plans and efficiently and timely resolve conditional payments made by these?
  4. Have you built a system or partnered with a vendor that allows you to appeal such conditional payment disputes and resolve them without referral to Treasury?
  5. Have you built a system or partnered with a vendor that allows you dispute such conditional payments on a timely basis?
  6. Have you built a system or partnered with a vendor that allows you to identify conditional payments made by Medicare early in your claims process?
  7. Have you built a system or partnered with a vendor that allows you to provide CMS with settlement, judgment, award, or payment details on a timely manner?
  8. Have you built a system or partnered with a vendor that allows you to provide CMS with accurate ongoing responsibility for medical information, including correct ICD-9 or ICD-10 codes?
  9. Have you built a system or partnered with a vendor that allows you to identify Medicare beneficiaries early in the claims process?
  10. Have you built a system or partnered with a vendor that allows you to decide whether submitting a proposed MSA to CMS is in your best interest?
  11. Have you built a post settlement system or partnered with a vendor that guarantees the beneficiary is using the MSA funds appropriately and as intended?

About Rafael Gonzalez

Rafael Gonzalez, Esq. is Executive Vice President and Chief Legal Counsel at Flagship Services Group, the only national Medicare Secondary Payer services provider focusing on and offering comprehensive mandatory reporting, conditional payments, and set aside allocation compliance services to the property and casualty insurance industry. He has been a part of the insurance, medical, and disability industries since 1983. He has served as a thought leader on all aspects of liability, workers compensation, social security, Medicare, and Medicaid compliance since 1990. He speaks and writes on mandatory insurer reporting, conditional payment resolution, set aside allocations, CMS approval, and MSA and SNT professional administration, as well as the interplay and effect of these processes and systems and the Affordable Care Act throughout the country. Rafael blogs on these topics at Medicare Compliance for P&C Insurers at http://www.flagshipservicesgroup.com/blog. He can be reached at rgonzalez@flagshipsgi.com or 813.967.7598.

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Topics: Medicare Law