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3 Ways Medicare’s New Fiscal Year May Impact Workers’ Compensation Payers

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The Medicare Secondary Payer landscape has changed as the seasons have changed this year.

The beginning of the Centers for Medicare and Medicaid Services’ fiscal year on October 1 coincided with several developments that may affect ongoing procedures for industry participants, most notably in the area of conditional payment reimbursement.

An OIG investigation and the latest issue of Medicare Learning Network Matters are also worth looking at. These alterations, along with the hiring of new contractors to handle various aspects of the Medicare Secondary Payer program, will take place in the fourth quarter of 2022 and into the first quarter of 2023.

What follows is essential information.

1) The OIG Audit

Recent government reports may encourage Medicare to identify and retrieve even more money paid out by Medicare, so if you thought their collection efforts were aggressive in the past, think again.

To prevent Medicare from footing the bill for medical expenses that should be covered by other policies, such as workers’ compensation for on-the-job injuries or liability insurance for car accidents and other bodily injury claims, the Medicare Secondary Payer law was enacted.

Congress has recognized Medicare as a secondary payer in certain situations since 1980, giving the agency broad jurisdiction to pursue reimbursement to the fullest extent possible and to demand double damages against payers failing to reimburse the Medicare Trust.

The present recovery efforts, however, don’t seem to be reaching the goal of that legislation, according to a recent government accountability assessment.

The Office of Inspector General for the United States Department of Health and Human Services reported on July 25, 2022, that CMS had collected slightly more than half of the $498 million in overpayments that had been identified over 27 months beginning October 1, 2014, and ending December 31, 2016.

This discrepancy is not new; an earlier OIG study found that of the $416 million suspected to be overpayments at the time, Medicare had recovered just $332 million.

Evidence suggests this health insurance policy will only generate enough money to pay its running costs through Part A Hospital insurance in 2028 at the earliest. The program is not predicted to collapse in 2029, but deficiencies without extra funding could cause payment delays or even denials.

Some of the things that were discovered and suggested in the most recent audit are:

  • Only $ 120 million of the $ 498 million in overpayments found were ever collected.
  • CMS said it had $272 million in collections, but it did not give enough evidence to prove it had also collected an additional $152 million.
  • Even though CMS and OIG had previously agreed on four recommendations, only two were implemented in full by CMS.

The OIG made some suggestions, which included:

  • It is imperative that efforts to recover the $226 million in overpayments that have thus far gone unclaimed be maintained.
  • Find out how much of the unproven $152 million has been collected and can be accounted for.
  • To be in line with Social Security Act subsection 1870, Section 405.980 of 42 CFR and its accompanying manual instructions must be revised.
  • Make suggestions about how to proceed with cost resolution.

CMS agreed with OIG’s advice to keep trying to recover any recoverable portion of the $226 million in uncollected overpayments, the report says.

While this study has many knock-on effects for the MSP stakeholder community in the form of more robust recovery efforts, one of the more worrisome is the suggestion to alter well-liked regulations that would allow payers to engage in continuous appeals of conditional payment amounts the government attempts to collect.

Possible changes to this set of rules could reduce the amount of time insurers and other payers have to lodge appeals when they believe they are due money despite a conditional payment being in place.

2) “The MSP Contractor”

The Benefits Coordination & Recovery Center (BCRC), also known as the Coordination of Benefits Contractor, has been responsible for handling Medicare claims processing for quite some time (COBC). On October 13, a new entity will take control of Medicare benefit coordination.

CMS announced the modification to Chapter 5 of the Internet Only Manual (IOM) 100-05 Medicare Secondary Payer Manual in their periodic publication MLN Matters, which was posted on August 12, 2022. The chapter titled “MSP Policy and Operational Procedures” (Chapter 5) is characterized as providing information on the aforementioned topics. The alert notes that the BCRC and COBC would be replaced by “The MSP Contractor” for benefits coordination beginning on October 13, 2022.

Since the MSP Contractor is primarily a data collector, it must rely on a wide range of resources to fill its information needs. It is going to be in charge of starting the MSP development process and deciding on MSPs.

In addition, it will be in charge of answering any questions that come up about Medicare Secondary Payer (MSP) coverage, excluding those that pertain to specific claims or recoveries, and making sure that the Common Working File (CWF) is always up to date and accurate.

Once the MSP Contractor has created the MSP account on CWF, they are responsible for all MSP tasks, including the tracking down and collection of overdue payments. The following were identified as potential implications of the notice for healthcare providers, suppliers, and facilities:

  • When services are supplied that are unrelated to the responsibility, no-fault, or workers’ compensation claim, the MAC may mistakenly dismiss the claim.
  • It is possible that the injury is unrelated to the claim even if the diagnosis codes are in the same family as those in the MSP NGHP record. If the MAC is provided with proof of separation, it will pay out as it should.
  • If the provider lists Medicare as primary, CMS will treat Medicare as if it were the only primary insurance in effect.
  • When a no-fault insurer declines to pay for a claim, the reason why and whether Medicare should cover the costs are detailed in the claim’s Claim Adjustment Reason Code (CARC).

3) Procurement

At now, at least two government contractors are in procurement to administer responsibilities outlined in Medicare Secondary Payer obligations, suggesting that other contractors may enter the market in the following months.

Medicare will be spared future medical expenses by signing the first contract with the Workers’ Compensation Analyze Contractor, whose traditional responsibility has been to review Workers’ Compensation Medicare Set-Asides provided by settling parties.

Other allocation reports from Non-Group Health Plans are now part of this contract’s RFP, and they likely include references to liability or no-fault Medicare Set-Asides. For over a decade, the insurance sector has waited impatiently for Medicare to publish and disseminate rules and guidance regarding MSAs and submissions for liability and no-fault insurance lines, expecting something akin to the Agency’s existing guidance for Workers’ Compensation Medicare Set-Asides.

The White House’s Office of Information and Regulatory Affairs is holding a proposed rule for final review and publication as it waits to be processed.

The WCRC RFP targets a contract signing on November 14, 2022. Changing contractors for this work has historically included training new employees, which can delay operations while the new team gets up to speed.

Workers’ compensation conditional payments are now being managed by the Commercial Repayment Center, whose contract is soon to expire. This contract was initially held by CGI prior to the formation of the CRC, but was later granted to Performant in 2017. In 2015, the Benefits Coordination and Recovery Center (BCRC) was established to oversee liability conditional payments, and the CRC was subsequently established to function in tandem with BCRC.

After the year 2022, the performer will have served out the fifth year of a five-year agreement. Before the introduction of a new CRC, there would often be adjustments to the frequency of communications and the intensity of collecting activities. &

(1) pursuing legislation to extend the status of limitations so that the recovery period exceeds the reopening period for Medicare payments; (2) updating its Audit Tracking and Reporting System (ATARS); (3) ensuring CMS collections information is consistent with ATARS; (4) collecting amounts made after the audit period to the extent the law allows; and (5) verifying the collected amounts are accurate; were all published as corrective action recommendations on May 18, 2012.

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3 Ways Medicare’s New Fiscal Year May Impact Workers’ Compensation Payers

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