As I previously blogged about on September 9, 2016, on August 30, 2016, the United States Court of Appeals for the 11th Circuit published its opinion in MSP Recovery, LLC v. Allstate Insurance Company, concluding that a contractual obligation, without a judgment, settlement, award, or other payment, can satisfy the “demonstrated responsibility” requirement of the private cause of action provided for by the Medicare Secondary Payer Act (MSP Act) at 42 U.S.C. §§ 1395y(b)(2)(B)(ii), (b)(3)(A). The court therefore allowed Medicare Advantage Plan assignee entities to seek double damages against no-fault, med-pay, PIP primary payers because of their refusal to reimburse Medicare advantage plan payments made related to the underlying covered claims.
As I blogged about in and CMS has been hinting about liability and no-fault set asides for a while. In February of 2017, they dropped another clue that they are getting ready for liability and no-fault Medicare set-asides.
Resolution of Medicare conditional paymentsis getting more and more complex, becoming harder and harder, taking longer and longer, and more and more expensive for auto, no-fault, liability, and workers compensation primary payers. More and more often, we hear stories of such primary payers and their third party administrators paying thousands of dollars to vendors to handle their Medicare conditional payment resolution process.
2015 was another banner year for property and casualty insurers, writing close to $600 billion worth of insurance. Is this growth and success the reason for the Centers for Medicare and Medicaid Services' (CMS) recent announcement on June 8, 2016, in which CMS indicated it is considering expanding its voluntary Medicare Set Aside (MSA) review process to include the review of proposed liability insurance (including self-insurance) and no-fault insurance MSA amounts? Or are there other reasons for such an attempt by CMS at this time?
The numbers are in, and the US property and casualty insurance industry had another big year in 2015. As reported by AM Best in Best's Review August 2016, the total US property and casualty direct written premium in 2015 was $591.16 billion, a 3.7% increase over 2014.
Reducing cycle times, paid costs, and reserves is a top priority of nearly every leader in the personal injury insurance industry. These key metrics help determine the financial viability of a company and can be the determining factor for keeping employees.
However, optimizing the process for reporting and recovery of conditional payments for Medicare beneficiaries is often not a top priority. Here are three ways to improve this process and begin to save money and jobs.
Ask a VP of Claims at an auto insurer of any size what his or her top priorities are and the following items will almost certainly be included.
- Reducing Costs: Never has there been so much price competition in the auto insurance industry. Because of this, auto insurers are forced to drive down costs.
- Effective Litigation Management: The approximately 10% of claims that are litigated account for about 80% of costs and nearly 100% of headaches. The last thing any Claims VP wants to do is to make settlement of a litigated claim more difficult or complex.
- Legal Compliance: The most successful Claims VPs pride themselves on their compliance acumen and successes. Consistently incurring penalties due to non-compliance is more than an inconvenience. It can mean job insecurity.
- Decision-Making Based on Reliable Data: “Big data” has become king. More than ever before, auto insurers are looking for better ways to organize, understand and report claims data in ways that provide revenue and cost-savings opportunities.
Given these priorities, why, then, should an auto insurance VP of Claims care about Medicare compliance?