Jennifer Jordan, MEDVAL’s general counsel, is editor-in-chief of The Complete Guide to Medicare Secondary Payer Compliance.   This new book from LexisNexis® is the first comprehensive resource for achieving MSP compliance in your insurance settlements.

Special Thanks to industry experts for their valuable contributions to the content of the book.

Robert Sagrillo, Protocols
Robert Lewis, Crowe Paradis
John Dalusio, Independent Consultant

This brand new title combines expert analysis of the substantive law with practice tips and other helpful tools and is organized as follows:

•Reference Directory
•Part I, Guide to MSP Compliance
•Chapter 1, Development of MSP Enforcement
•Chapter 2, MMSEA Section 111 Reporting Requirements
•Chapter 3, Conditional Payments
•Chapter 4, Medicare Set-Aside Arrangements
•Chapter 5, Workers’ Compensation Medicare Set-Aside Arrangements
•Chapter 6, Liability Claims and the MSP
•Part II, Case Summaries with Commentary
•Part III, United States Code and Public Laws
•Part IV, Code of Federal Regulations
•Part V, Medicare Secondary Payer (MSP) Manual
•Part VI, MMSEA Section 111 User Guide
•Part VII, CMS Memorandums
•Part VIII, Glossary and Acronyms
•Part IX, United States Life Tables
•Index

The book will be available in fall 2010.  Complete details and ordering information are available from LexisNexis.

This question recently came in and I thought a wider audience might benefit from the answer:

Question: I recently was hired by an MSA company and was let go after two short months of employment. They loved my legal nurse reviews but felt I did not have good enough MSA skills and insight in preparing MSAs and medical costs projection reports. I took the MSA course through Kelynco and did not feel prepared at all when it came to preparing MSA reports. I passed the certification but lacked the necessary tools to succeed. My question is where can I receive the tools I need to be successful at preparing MSAs? I am out of a job and down on my luck. Any suggestions?

Answer: In my opinion, the ONLY way to become proficient at preparing MSAs is to review many different types of cases under the supervision of someone more qualified and experienced. I believe it takes close to a year of experience before an MSA writer can become reasonably proficient. It takes three or more years to really become and expert. And once you are an "expert" you should be prepared to unlearn certain things as the industry continues to evolve (or devolve as the case may be).

One of the biggest challenges facing the MSA industry is hiring, training and retaining people that have the aptitude for the work. The MSCC program will leave just about anyone ill prepared to succeed as an MSA writer. I think that designation is good for someone who has a job dealing with MSAs but does not actually have to prepare them (e.g. a claims supervisior or MSA coordinator). It’s a nice overview but in no way will you be able to meet the challenges of operating in this field just by taking the course.

Unfortunately, in the interest of quick profits and claim volume growth, most of the industry will take someone that has a medical background and an MSCC and begin letting them release cases to clients with very little oversight or quality control. That is a disservice to you and a disservice to the clients. But ultimately, even with the right training and supervision some people are just better than others at MSA work. It is a special blend of technical skill, attention to detail and professional judgment that not everyone will possess.

If you decide to stick with MSAs, find a company that has good training and QA oversight. You will find it is a little bit of a chicken or the egg situation. Without some technical skills you will not be able to get the job but without the job there is really nowhere to turn to develop the skills. Just read as much as you can that is in the public domain and keep looking for work. Good luck to you.

For those of you who are members of the LinkedIn forum run by Kim Wiswell at CompPartners, this discussion may seem kind of stale. I have been meaning to address the topic in more detail but have been lacking the time and motivation until this morning.

By way of background, a new company, msaratedage.com, began sending emails in early August to industry firms advertising "free rated ages". Initially there was no identifying information or description of the "how" and "why" of this new service. They purported to have a solution for the rated age problems we all face as MSA providers and structured settlement brokers. The basis of the service was that msaratedage.com had the permission of at least one life company to provide rated ages directly to the MSA industry and bypass the traditional structured settlement broker distribution channel.

Ok, sounds good so far so what’s the catch? How does it really solve the problem of rated ages and the burden they place on life underwriting departments? Why would this be offered for free? And who is offering it?

Well after a lot of questioning feedback in the forum, the proprietor, structured settlement broker Tom Stanley, revealed himself in an open letter on the site’s home page. Here is what we found out and the questions that remain.

1. The service is free for now. However, Tom plans on charging for the service if and when he decides it is viable. So maybe it should be more accurately advertised as a free trial period of an indeterminate length.

2. So far only one life company is participating. However, in the days of median rated ages and disclosure of all rated ages obtained that may not be such a bad thing. Structured settlement industry participants chimed in saying there wasn't any value unless all life companies were participating. I don’t think that is true at all. Still, maybe two or three companies that do not routinely issue “standard” rated ages would be a nice enhancement.

3. Tom claims that underwriting departments are overwhelmed by issuing rated ages for cases where they have no expectation of receiving premiums. But in the open letter he claims the pilot company didn’t incur much cost at all? Which is it? What technology does msaratedage.com bring that reduces the life company’s costs?

There are some positives and negatives with this program. On the positive side, Tom is getting formal permission from the life markets to issue rated ages to MSA companies. This is much better than the current system in place (which is a don’t ask/don’t tell kind of situation). The life markets need to understand that it is the same structured settlement customers (the P&C carriers and attorneys) that need rated ages so their help is critical. Like it or not, MSAs are here to stay as part of the claims resolution process. I also like his stated intention of raising the awareness and dialogue of the problem "above a whisper". It is a big problem that most do not really understand unless they operate in both the structured settlement and MSA industries, which Tom and I both do.

On the negative side, I don’t like the way the service was initially marketed because of the lack of disclosure that Tom Stanley is a structured settlement broker and also prepares MSAs as part of his business model (don’t expect a lot of business from the major MSA firms or brokers that are trying to break into the business). The marketing seems to indicate that his company is something different and unique. But has far as I can tell, he is simply interjecting his company as a middleman into the same process, which does nothing to address the underlying issue of life market costs. I also didn’t like the "free" come-on. We all know nothing in life is free so what is the catch? An annuity relationship with the MSA provider? We now know that his plan is to eventually charge for the service (and I am sure he will place the annuity if you twist his arm). I think that marketing tactic is a little like the neighborhood drug dealer that offers free samples to his customers to get them hooked. I don’t have a problem with him charging for service but be upfront with your intentions (although again how does paying msaretedage.com reduce the life company’s costs? I would rather just pay the life company directly as opposed to a middleman).

The solution to the rated age problem is to use an independent underwriter than meets CMS’s ever changing definitions or pay the life companies a fee for service that is waived upon the placement of annuity premium. I can’t see how interjecting msaratededge.com into the equation does anything to alleviate the stated problem.

BTW, the going rate for a rated age is about $20 through an independent underwriter. Send me an email if you would like some referrals.

For the second time in as many weeks, an MSA Company President has been shown the door by his corporate overseers. "Clark" Kent Takemoto, MD is no longer with PMSI as of last Friday. The internal PMSI memo "keeping you informed" confirms that Mr. Takemoto no longer works at PMSI and has left to pursue "other entrepreneurial activities".

The back-story is that Takemoto, MD and Jim Malloy were brought in by HIG capital prior to the current CEO of PMSI, Eileen Auen. Industry insiders report there was much tension between the two and it looks like the CEO won the day. The decision to replace Takemoto, MD was made prior to the recent FWCP conference in Orlando, which explains his absence from the show. No word on the fate of long time sidekick Jim Molloy, although I did see him milling about in Orlando.

With Takemoto, MD gone, PMSI Settlement Solutions is looking for its fourth leader in three years. Is there anyone that wants the job?  It a high risk, high reward position just waiting for the right free agent.

It is time once again to solicit volunteers to run for the NAMSAP Board of Directors.  We have three open slots on the board and we would encourage you to consider this volunteer opportunity, as we welcome new ideas and new perspectives to encourage the development of NAMSAP as a premier organization.

Please read through the attachment linked below, which describes the duties of NAMSAP Board members and asks you a few questions.

If you are interested in running, please complete the form and return it to us, along with your photo and a brief resume, no later than Friday, August 27. This information will then be posted on the website and a link emailed out with a ballot (through a secure online voting system) to the NAMSAP membership.

Please don’t hesitate to contact us should you have any questions.

-- Phil Pyster, CAE
NAMSAP Offices
341 N. Maitland Avenue, Suite 130
Maitland, FL 32751
Phone: 407-647-8839
FAX: 407-629-2502

1. The statute clearly identifies that Medicare is to be a secondary payer. So absent an MSA how do the parties comply with the law?

2. MMSEA reporting is not just to identify past payments. It will also be used to make sure future payments are not made. Absent an MSA the claimant is barred from Medicare coverage for injuries related to the settlement up to the entire amount of the settlement.  A reasonable MSA should protect against that occurrence

3. CMS has hired people to review what they term LMSAs. Did they do that for no reason or are the collecting information about liability settlements to issue formal guidance? CMS has acknowledged in many forums the appropriateness of LMSAs despite not issuing a memo.

4. I have firsthand knowledge of liability claims that were settled and apportioned via MSA. Post settlement bills were mistakenly sent to Medicare and denied. When the established MSA was exhausted, Medicare assumed primary payment liability despite the MSA being heavily discounted for liability issues.

5. Despite any legal defenses you may or may not have, CMS routinely makes unreasonable demands that are not supported by the law. If you are going to defend against their claims in the future, it is better to have you defense laid out in the settlement agreement and place the burden of proof upon CMS to demonstrate how you did not comply with the statute.

Plus it is just a reasonable position to take.

I had an interesting conversation with a very sophisticated VP of claims yesterday. She said the liability industry is embracing the "no MSA" concept because that is what they want to hear. I think that will prove to be an incorrect strategy.

Ryan

Dear NAMSAP Members:

NAMSAP was created to help individuals and organizations address claims impacted by the Medicare Secondary Payer statute (MSP).  Our mission is to foster the highest standards of integrity and competence among Medicare Set-Aside professionals and those they serve.  Our purpose is to develop standards and define best practices for the industry, promote a multidisciplinary approach to the Medicare Set-Aside practice, provide a forum for learning and shared knowledge between all associated disciplines, provide a unified voice to affect change and improve the Medicare Set-Aside process, and to protect the interests of all parties in settlements involving Medicare Set-Aside related issues.

At our inception we determined that we were an educational organization and not a certification body and we have kept that promise.  At this point in time NAMSAP’s educational programs are pre-approved by the International Commission for Healthcare Certification (ICHCC) for those interested in obtaining or renewing their MSCC credential.  ICHCC is a separate certifying body which offers the MSCC credential. ICHCC has pre-approved our training program for the past five years and there is no indication that our relationship with them has, or will change.  We will continue to foster our relationship with ICHCC as one of a provider of education.

As you have certainly noticed on our List Serve - The Louisiana Association of Self Insured Employers (LASIE) has recently developed a new certification program. LASIE has been training and credentialing insurance professionals for approximately twenty years and have created the “Certified Medicare Secondary Payer Program” and credentials.  As with ICHCC, we will be submitting NAMSAP’s educational program to LASIE for review for consideration of receiving pre-approval status for those interested in obtaining and/or renewing their credential through LASIE’s program.

We are not endorsing either program. It is our member’s choice if they want certification, and where to obtain it. Over the past five years NAMSAP has hosted and supported a variety of programs that expand the knowledge base of the professionals in our group. We have never endorsed any organization, certifying body or vendor; and continue that practice.   Most of the members of our Board of Directors speak on a repeated basis to a wide range of groups.  As members of the Board of Directors we take seriously the stated NAMSAP mission of professional education.   That being said, the Board of Directors have met and discussed the issues and concerns raised on the NAMSAP listserv this past month and after much discussion we have concluded that a conflict of interest does not exist should our board members chose to participate in the new LASIE program. Members of the Board of Directors will continue to promote our mission of education, which may include speaking at seminars and programs around the country.

Thank you for your time.  If you have any questions or concerns you are welcome to contact us directly.

NAMSAP Board of Directors

Comment: I agree that no conflict exists for those who wish to particpate as presenters of this program, NAMSAP Board member or not. I still question the value of the program relative to other offerings. However, I am a believer in free markets so if this upstart program can successfully challenge the status quo then then let them succeed or fail on their merits. Based on the "faculty" I would not send any of our employees to the program nor would I hire anyone based on obtaining the certification. But that holds true for the MSCC as well so from my perspective it is a moot point.

Speculation continues to swirl around the possibility that PMSI Settlement Solutions is on the sales block. HIG Capital, known for flipping MSA companies at an obscene profit in 13 months or less, might desire to take a second bite of that apple.

Amerisource Bergen, whose executives were absolutely fleeced in the Health Advocates deal to the tune of 86MM, sold all of PMSI two years later for just 40MM (Bravo June Simpson)

Takemoto, MD and Jim Malloy have been suspiciously absent from the day to day operations at PMSI and employees are wondering is something a foot? Maybe. Or maybe they are just on vacation. Time will tell.

Industry sources report that Atlas Settlement Group has disbanded their internal MSA unit to focus on structured settlements. They will be referring any new cases to an unspecified law firm.

Their foray into the MSA business began around 2006 using Burns, White and Hickton as their back office. BWH would do the actual MSA and Atlas would brand the work product as their own.

Sometime around 2008 they decided to move their operations “in house” by hiring a couple of MSA writers. However, the MSA business is a lot trickier than it looks from the outside and simply having a few people with MSCC behind their name doesn’t really do the trick anymore.

Ringler MSA and the new offering by IFSS (owner of SFA, EPS, Millenium) Providio MSA should take a lesson from Atlas. Stick to what you know because you are 10 years behind the rest of the industry.

Industry sources report that Gould and Lamb CEO John Williams has been replaced at the request of private equity owners ABRY Partners. Apparently, their $180MM investment is not performing as expected and a change in leadership was needed.

Industry speculation is that Gould and Lamb's Section 111 solution cost more than expected and has not brought in the revenue used to justify its expense.

John had a pretty good run as CEO and probably benefited financially with the HIG sale to ABRY. But don’t expect to see him in the MSA business anytime soon. G&L has the toughest non-competes in the business and never hesitates to sue former employees that violate the contract.

Here is the official anouncement from Gould and Lamb:

"BRADENTON, FL (July 30, 2010) - Gould & Lamb, LLC ("Gould & Lamb" or the "Company"), a leading provider of cost-containment solutions to the workers' compensation and liability insurance industry, today announced the promotion of Deborah Pfeifle, MSN, RN, CCM, CRRN, CLCP and MSCC, to President and Chief Operating Officer, replacing John Williams.

John Williams has made a significant contribution to Gould and Lamb and the industry as a whole. John has been highly successful both professionally and personally and we respect his decision to step down from the role of Chief Executive Officer (CEO). John continues to be part of the Gould & Lamb organization as a fiduciary partner

Ms. Pfeifle, formerly the Vice President of Clinical Services at the Company, brings a wealth of insurance related medical and cost projection experience, liability life care planning and operations management to her new role. Ms. Pfeifle will be focused on further enhancing the Company's advanced technology and expert multi-disciplinary approach to enable Gould & Lamb to continue to offer the highest quality and most defensible Medicare Set Aside (MSA) and single source Medicare Secondary Payer (MSP) compliance services available in the marketplace. Her dedication to customer service and quality are paramount to the Company's operations. 
"We are very pleased to partner with such a dedicated and highly-experienced industry executive and we look forward to working closely with Deborah to both grow Gould & Lamb's business and to exceed the service expectations of our customers," commented Rob MacInnis, Partner, ABRY Partners, Gould & Lamb's majority shareholder.  

This change in leadership marks a new direction for Gould & Lamb in product innovations and customer service. The MMSEA Section 111 Reporting solution that was pioneered by Gould & Lamb is the basis for this new direction. Gould & Lamb’s place as the nation’s leading provider of MSP compliance and MMSEA services is secure.

Gould & Lamb will continue to engage in professional organizations which promote the interests of our clients, advocating on their behalf, while protecting Medicare’s interests within the scope of the MSP statute. Gould & Lamb’s strategic vision for the future, under Ms. Pfeifle, is focused on quality and customer satisfaction."

Those of you that are regular readers of this blog know how much I dislike form over substance. So you can imagine how unimpressed I am with the new Medicare Secondary Payer Compliance (called the CMSP) designation being offered by The Association of Medicare Set-Aside Professionals. See brochure here.

For only $1,000, 16 hours of your time, and the passing of an exam and practicum, you too can be “certified” to advise clients on MSP issues. No need to have any prior employment, educational background or industry experience. A willingness to travel to New Orleans in the dead of summer and $1,000 is all it takes.

Don’t get me wrong. I am all for people improving their professional knowledge and learning about all phases of the MSP before hanging their shingle. It takes AT LEAST six months to a year of training for people within our organization to be up to speed on the issues (and they start with a minimum of a BSN or JD and usually have both). It probably takes another full year to really be able to credibly advise clients.

You know the saying; the best way to eat an elephant is one bite at a time, so 16 hours of education is better than nothing. But the idea that this organization possesses any authority to credential someone is just ridiculous.  It takes more than a website (which this organization does not currently have) and an 800 number. Furthermore, the “instructors” look more like industry participants looking to develop a new source of referrals for their structured settlement or post settlement custodial business than true MSP experts.

Hopefully, very few will spend $1,000 on this credential with the misguided hope of breaking into the MSP industry. An MSCC would be a better choice given there is a more robust curriculum, faculty and certification process. More importantly, the MSCC door is not open to all comers unless you have some demonstrable medical, legal or claims experience. See MSCC requirements here .

If you are a client (or MSP provider) looking to hire someone for your MSP compliance program consider people with a combination of the following academic experience.

Bachelor of Science Degree with Science major – 5,400 classroom hours plus

MD-4,500 hours classroom +4,000 hours OJT + Board Certification

PharmD – 4,000 hours classroom + 1,350 OJT + NAPLEX and/or MPJE exam

PA-C – 2,250 hours + NCCPA exam.

BSN/RN – 1,500 hours + NCLEX exam (add another 1,500 hours for Nurse Practitioner)

Bachelor of Arts or Science – 5,400 classroom hours plus

JD – 3,375 hours + 2-3 day Bar Exam

And while academic credentials are a nice pre-requisite, they should also have 5-10 years of experience in the insurance industry.

Offering a 16 hour certification without any industry experts, pre-requisites, experience requirement or support from the major industry players really make you wonder what value there is in obtaining such a certification. Keeping it as an MSP 101 seminar or CLE course would be more appropriate. They actually offer it both ways so spend the $700 if you are inclined to add to your base of MSP knowledge.

The guy that cuts my hair in Maryland has to have at least 1,200 hours of classroom training as well as another 2,500 hours OJT. The person handling the MSA or other MSP issues on a workers’ compensation or liability insurance claim should at least be held to an equal or greater standard.

May 18, 2010

PMSI SETTLEMENT SOLUTIONS ADVOCACY EFFORTS PROMPTS CMS TO IMPROVE MSA REVIEW METHODOLOGY

Question posted on Mark Walls' "Work Comp Analysis Group" on Linked-in.
www.linkedin.com

Submission of WCMSAs to CMS for approval? Is it really a "voluntary" process?

It seems there is a belief among some MSA companies that many times it is best to forego CMS approval although the WC case meets the current CMS review thresholds. Although CMS may state that WCMSA approval is a "voluntary" process, I question the motives of those giving this advice. I'm curious to hear the WC group's thoughts on this issue.

I know from experience that many savvy plaintiff attys are insisting on CMS approval of the MSA arrangement before finalizing the settlement of the WC claim and for good reason. Here is an excerpt from a CMS memo of 7/11/05 that outlines the dangers for their client if CMS approval is not sought and the MSA is not fully funded per CMS recommendations:

The parties may proceed with the settlement, but any statement in the settlement of the amount needed to fund the WCMSA is not binding upon CMS unless/until the parties provide CMS with documentation that the WCMSA has actually been funded for the full amount as specified by CMS that adequately protects Medicare’s interests as a result of its
review.

If CMS does not subsequently provide approval of the funded WCMSA amount as specified in the settlement and proof is not provided to CMS that the CMS-approved amount has been fully funded, CMS may deny payment for services related to the WC claim up to the full amount of the settlement. Only the approval of the WCMSA by CMS and the submission of proof that the WCMSA was funded with the approved amount, would limit the denial of
related claims to the amount in the WCMSA. This shall be demonstrated by submitting a copy of the final, signed settlement documents indicating the WCMSA is the same amount as that recommended by CMS.

As a reminder, the claimant may be at risk if the WCMSA is funded for less than the amount that CMS determines to be adequate to protect Medicare’s interests.

As most MSA assignments are done at the expense of the defense, protecting the claimant's future Medicare benefits might not matter to some MSA vendors or their clients. Given the above written guidance from CMS, WCMSA approval when review thresholds are met just doesn't seem so "voluntary" to me.


Response from MEDVAL

To answer your original question, the motivation of any reputable MSA vendor is to ensure you are in full compliance with the MSP while diligently working toward an MSA does not create an unlawful financial burden or become an impediment to reaching a settlement. In 2003, I began using the phrase “lowest defensible allocation” to capture our philosophy of MSP compliance.  Since then, the phrase has been widely co-opted by the marketing/sales arm of the Medicare Set-Aside industry with a limited understanding of its implications- past, present and future.

Lowest - That is the easy part. Anyone can make an MSA low and just about everyone did, particularly on the Part D component prior to June 1, 2009. In a race for market share and backed by private equity investors, some companies threw caution to the wind in exchange for business growth and did everything possible to make the number low. Drug Utilization Reviews, Donut hole calculations, patent expirations, off-label exclusions, generic substitutions; the world was their oyster. Sometimes the MSA was so low, you couldn’t understand how this claimant that was previously spending $12,000 per month on Rx was now going to switch to OTC ibuprofen for the remainder of their 44 year life expectancy. Mark, you were absolutely right to seek a “second opinion” when the MSA was too good to be true because you correctly understand per your post that “the goal of this entire exercise with MSAs is so that CMS does not have to make payments for medical treatment related to a workers' compensation claim” If that standard is met then there will never be an issue with CMS down the road. The question now becomes, what happens when something goes wrong?

Defensible-  Now it gets a little trickier. I think the jury is out on whether CMS will ultimately disregard their prior approvals. There is a lot of low hanging fruit for them to go after before tackling this legal burden.

One exception may very well be in the Part D portion of the MSA. Prior to independently reviewing Rx, CMS would send their “approval” letters out with this language (emphasis added by me)  

“You proposed that a WCMSA in the amount of x be available for the purposes of paying future medical services related to the work injury or disease that would otherwise be reimbursable by Medicare. We note that an amount of x was submitted for future prescription drug treatment. We have evaluated your proposed to protect Medicare’s interests with a WCMSA for future medical expenses related to x’s work injury or disease. We have determined that x which is a combination of the reviewed future medical treatment and the future prescription drug costs that are noted in the submitted cover letter, adequately considers Medicare’s interests". 

A careful reading of that language seems to indicate they have left the door open on the Rx issue. I personally do not believe that CMS will come after these settlements, except in the most egregious instances, but I do think they have reserved the right. I do not spend much time worrying about the issue because we never supported the use of DURs or Donut hole calculations in WCMSAs under the theory that we couldn’t defend our use of the methodology if and when we were called upon to do so.

Here is a scenario that I have often imagined being applied to those firms that couldn’t resist the market pressure.

Plaintiff Attorney: “Why did you artificially reduce the use of my client’s drug allocation in your MSA report dated 5/31/2009? At the time he was currently taking over $12,000 per month in prescription medications and you allocated $1,000 per year. Can you enlighten us on your methodology?”

Self-Insured MSA Vendor (because E&O limits have long since been exhausted): “Well we received this equity investment and had to grow revenues 170% per year. So we began having our sales force push DUR’s for $500 per case and applying the donut hole calculations to gain market share by convincing our clients we would save them millions of dollars. Since CMS wasn’t actually reviewing what we sent, it was a great strategy. We figured we would be long gone before any of this came home to roost”.

John Williams makes a valid point. Your vendor has to be prepared to stand behind their work product over the long-term and have the internal legal and clinical resources to defend themselves and assist their clients if and when challenged by CMS.  It becomes a lot easier when you operate under the assumption that one day you will be called to answer for your actions.

In the interest of full disclosure, my firm did use patent expirations and off –label exclusions because we believed these practices were inherently defensible and supported by independent evidence and the law (regardless of what CMS does in their independent review program). Our goal was never to make the MSA artificially low. The goal was to make it a reasonable protection of Medicare’s interests without creating a windfall for the claimant or increasing the defendant loss ratio by a couple of percentage points.

In addition to all the problems John correctly identified with the WCRC “voluntary” review program, they simply do not understand the concept that the plaintiff may have motivations for treatment other than medical necessity. The treating doctor’s opinion is the gold standard as far as CMS is concerned (in most jurisdictions) and the claimant’s past treatment is considered a reliable predictor of future needs. That coupled with the problems noted above, is why so many people are willing to abandon the comfort of CMS approval for the great uncertainty future enforcement action.

Where I disagree with Mr. Williams is his theory that it is better to have CMS approval in hand, even if you elect to disregard their opinion later, than to forego the process altogether. Keep in mind the only cases were future payments made by CMS are going to be an issue is when an allocation was inadequate from the beginning and the claimant seeks treatment from Medicare in the future. In that scenario, I would rather be the carrier that made a good faith allocation based on the facts at the time of settlement and in accordance with state law, than the carrier with a CMS opinion letter in hand and a prematurely exhausted allocation. In the first scenario, the burden of proof is on Medicare to demonstrate how their interests where not adequately protected. In the latter, the burden shifts to the carrier to prove Medicare’s interests were protected. I think that will be a difficult hurdle to overcome particularly when the allocation is exhausted. It’s a fine distinction but our opinion is that if you ask for CMS’ opinion (which they consistently say is voluntary and not to ask if you don’t like it), then you are stuck with the outcome and not much of a defense if and when the case resurfaces in the future.

The suggestion that you should be worried about a vendor that suggests not submitting to CMS is totally without merit. I believe you should be more worried about a vendor that DOES NOT present the option to you for consideration. That doesn’t mean you need to follow the advice. In fact, after the June 2009 memo and contrary to our best advice at the time, most of our clients chose to continue to submit to CMS. Once the decision was made, it was time to figure out how to mitigate the additional costs. Some, like Janice indicated in her post above, decided certain claims were just too expensive to settle. Others took a wait and see approach and closed the indemnity in the hopes of setting medicals in the future (or that the medical record would improve by virtue of the claimant not seeking as much treatment). Still others believe a settled WC claim is the best WC claim. They made the decision to seek CMS approval on all eligible claims.  

We believe best practice now dictates taking the time to resolve ambiguous issues prior to submitting to CMS (e.g.  getting clarification on that three year old SCS recommendation or asking the treating doc exactly what medications are being prescribed and for what duration). The goal is to leave nothing to the imagination of our friends at the WCRC. WCRC creativity with future treatment regimens equals large and unexpected counter approvals. And even if you expend your best efforts, CMS may still come back with an opinion riddled with mistakes and inaccuracies.

Submitting a case for CMS’ opinion is a risk management decision that the payer needs to make. Some of our clients have analyzed the risks and decided to completely forgo the review program and indemnify the claimants on the back end of the claim. They believe (as do I) that it is better to develop a sound methodology to protect Medicare’s interests, fairly evaluate and pay the claim and defend or pay a small percentage of claims that go wrong in the future. The alternative is to settle 100% of their claims for more than they are currently worth. Some times much more.

Ultimately, a cost/benefit analysis has to be made. Will CMS be able to recover funds post settlement when a valid MSA was created but was not subjected to the flawed and arbitrary review program? Or should we adhere to the WCRC review protocols where some cases will not be adversely affected but where others end up costing 2X to 5X more than necessary? The answer really depends on the types of claims you handle and your organization’s appetite for risk. Personally, I think too much weight is being put on future hypothetical actions by CMS (which to date they have shown little interest in pursuing against payers or attorneys that have made good faith efforts to comply with the MSP) and not enough interest in the cost of foreclosing the risk.  But reasonable people can have a different opinions. I see our job as presenting the pro’s and con’s of any proposed action and letting our clients make the decisions that only they are in a position to decide.