Saturday, September 21, 2013

CMS releases Portal regulation

On September 20, 2013, the Centers for Medicare and Medicaid Services (CMS) released its Interim Final Rule relating to the MSP Portal. This IFR was published in the September 20 Federal Register. It adds a new rule as 42 CFR 411.39.

This is only one small step toward making the Portal a fully useful resource for participants in litigated cases. It represents, in our estimation, no more than partial compliance with the requirements imposed by Congress in its January 2013 SMART Act.

The provisions, in a nutshell, are:
  • CMS will continue to provide information on payments made by Medicare to beneficiaries using the portal
  • The beneficiary will be able to dispute particular items based on "relatedness" (whether a medical service was related to the injury for which compensation is sought or paid)
  • CMS will add a function to permit downloading of a date and time-stamped summary of the payment summary forms by the beneficiary (and not by any other user)
  • Others, such as the beneficary's attorney and the "applicable plan" (the primary payer) will continue to be able to register and obtain some information
  • Their access [and the information provided] will be limited until CMS develops and implements a security procedure (a multifactor authentication procedure)
  • CMS will develop this procedure within 90 days
  • CMS will implement it by January 1, 2016
After that point, CMS says, full information will be available to the beneficiary, his attorney, and the primary payer.

Note that, as we predicted, the Portal's challenge procedures will address only the question of whether a particular medical service is related to the subject injury. For now, and for at least the next 27 months, even that challenge can only be made by the beneficiary. This falls short of the requirement imposed under the SMART Act. That Act required that CMS, within nine months of its effective date, develop regulations for the filing of such disputes by primary payers as well. It appears that compliance with this requirement is not expected for a long time.

Although this is a Final Rule, CMS will receive comments for a period of 60 days, in light of the fact that it skipped the issuance of a Proposed Rule. This suggests that CMS is finding it difficult to accomplish even this partially compliant functionality.

Paragraph (d) of the new rule states:
(d) Obligations with respect to future medical items and services.

Final conditional payment amounts obtained via the Web portal represent Medicare covered and otherwise reimbursable items and services that are related to the beneficiary's settlement, judgment, award, or other payment furnished before the time and date stamped on the final conditional payment summary form.
Since we are expecting a proposed rule on future medical expenses in short order, the absence of any specific directive here is unsurprising. 

Obtaining final reimbursement information 

The steps that are specified in the new rule are
  • Any party may notify the MSPRC of a planned settlement at least 185 days in advance.
  • The MSPRC will compile and post on the portal the reimbursement figure and the listing of related payments (the "payment summary") within 65 days.
  • After it does so, any party may notify the MSPRC that a settlement is expected within 120 days.
  • The beneficiary or his attorney may challenge one or more items on the listing as unrelated to the subject accident. This may be done "once and only once," at least 120 days before the date of settlement. (Note that, reading the rule strictly, the time frames are mutually contradictory.)
  • The regulation says, "The dispute process is not an appeals process, nor does it establish a right of appeal regarding that dispute. There will be no administrative or judicial review related to this dispute process."
  • The MSPRC may ask for documentation, in a manner yet to be determined.
  • The MSPRC will resolve the challenge within eleven days.
  • The beneficiary or his attorney must ask that the reimbursement amount be updated. This may be done "once and only once," and it should be done only after the payment summary has been reviewed to ensure that it does not include any unrelated items.
  • CMS will do the update within five days.
For defendants and insurers, cooperation with the plaintiff and his attorney is the preferred approach. The plaintiff's attorney should be requested to provide the reimbursement figure and the payment summary as soon as it is received. This is the only way that the defense will have access to the payment summary. It should then be carefully reviewed to ensure that items unrelated to the subject accident are not included. (This can often be done by reviewing the diagnosis codes to distinguish between trauma-related treatments and others.) If one or more of the items are unrelated, the attorney for the plaintiff should be encouraged to file the needed challenge under the rule.

In some cases, though not in all, the plaintiff and his attorney can be expected to cooperate with these efforts, since it is also in their interest to make sure that the settlement funds are not used to reimburse unrelated items.

Saturday, September 7, 2013

Update on Humana MA lawsuits

See our previous post on this series of filings.The New York law firm of Weil, Gotshal & Manges is now acting as lead counsel for defendant Mid-Century Insurance in the Tennessee case, and for Farmers in the other three cases.

In each of the cases pending in the other jurisdictions (Federal courts in Texas, Kansas, and Missouri), the defendant filed (on August 30) a notice of a motion to have the other three cases consolidated with Cariten Health in the U.S. District Court for the Eastern District of Tennessee, under the Multidistrict Litigation rules, for further proceedings. By order of the District Court in those cases, activity is stayed pending a ruling on the consolidation motion. It is likely that it will take at least a couple of months for the Judicial Panel to make its decision. This page is where the panel reports its decisions. 

On the same date, a Motion to Dismiss was filed on behalf of Mid-Century in Cariten Health. No hearing date has yet been set.

This is an outline of the points argued in the memorandum filed in support of the motion:

ARGUMENT
I. PLAINTIFF’S CLAIMS FOR CHARGES UNDER THE MAO STATUTE MUST BE DISMISSED
A. The MAO Statute Does Not Create A Private Cause of Action
B. By Plaintiff’s Own Admission, Plaintiff Has Not Properly Made a Conditional Payment

II. PLAINTIFF’S CLAIM FOR DOUBLE DAMAGES UNDER THE MEDICARE SECONDARY PAYER ACT MUST BE DISMISSED
A. The Secondary Payer Act Does Not Provide Plaintiff with a Private Cause of Action
1. The Secondary Payer Act Provides a Cause of Action to Recover Benefits Paid by the Secretary, not an MA Organization, From the Medicare Trust Fund
2. Extending the Private Right of Action to MA Organizations Goes Beyond the Statutory Framework Congress Established
3. Regulations Issued By CMS Do Not Create a Private Cause of Action For MA Organizations
B. Even if the Secondary Payer Act Provides MA Organizations with a Private Cause of Action, Plaintiff’s Claim Must Still Be Dismissed
1. Plaintiff Has Failed to Allege that Defendant Violated 42 U.S.C. § 1395y(b)(1)
2. Based on the Statute’s Plain Language, a Private Cause of Action May Only be Brought Against Primary Payers Who Fail to Comply with Paragraph (2)(A)

III. PLAINTIFF’S CLAIM FOR UNJUST ENRICHMENT SHOULD BE DISMISSED
A. Plaintiff Did Not Confer a Benefit Upon Defendant Because Defendant is not Required to Reimburse Plaintiff
B. The Court Should Decline to Exercise Supplemental Jurisdiction

Friday, September 6, 2013

MSP Portal is live

The Medicare Secondary Payer Portal has been set up by CMS to comply with Congress' directive in the January 2013 SMART Act to establish an online presence using which the parties to a lawsuit may obtain a final and binding reimbursement amount just before settling a case, and to provide a mechanism for contesting items that the Recovery Contractor has improperly included in the listing.

Before the SMART Act, CMS would not provide a final reimbursement demand figure until after the case had been settled and the plaintiff's attorney had the settlement proceeds in hand.

CMS is expected to release proposed regulations relating to the Portal by October 2013. In the meantime, there is a User Manual which provides detailed information about its use.

The front page for the Portal, which is to be used for all reimbursement issues relating to liability and no-fault auto insurance claims, is https://www.cob.cms.hhs.gov/MSPRP/. Direct links to key items are
There are two ways to access the Portal. CMS requires the Medicare beneficiary to sign a “Proof of Representation” form to allow his attorney, his guardian, his agent under a Power of Attorney, etc. to obtain information on his behalf. To use the portal, he or she sets up a “representative account.”

For a defense attorney or an insurance claims representative, a “Consent to Release” form must be signed, and a “corporate account” is used. For those defending a litigated claim, it is best to have this release form signed early on in the course of litigation.

The Consent to Release form will be reviewed by CMS to ensure that each of the requirements is met. CMS says that it will take 45 days to review and verify the consent form. Once it has been reviewed the Consent is regarded as “verified”.

The portal can be used to:
  • Obtain updated conditional payment figures
  • Submit a dispute on a particular item if it is unrelated to the accident at issue in the lawsuit
  • Submit settlement information
  • Obtain a final conditional payment amount from CMS
Some of these items, however, can be done only by the attorney representing the plaintiff.

Once the Consent to Release form has been verified, the authorized person will be included on any of the mailings that are sent and will be permitted to review the conditional payment letter and other documentation on the portal. The total conditional payment amount will be released, but CMS will not provide the conditional payments listing (providing the details of each medical service). That information will only be provided to the plaintiff’s attorney or other representative.

The portal is also used by the plaintiff’s attorney to submit information regarding the settlement and to thereafter obtain a final conditional payment figure and generate the official reimbursement demand letter. The instructions advise the plaintiff’s attorney to submit this information as soon as a settlement agreement is finalized, even though the money has not yet been paid. The attorney is expected to provide the total amount to be paid in the settlement, the expenses to be charged, and the calculated attorney fee. For those cases for which the fixed percentage option is available, the request is also submitted at that time. (Recall that the fixed percentage option is available only for certain cases that are settled for less than $5,000. Under that program, the plaintiff can request that the reimbursement amount be limited to 25% of the settlement proceeds.)

CMS says that it will review the settlement information within 20 days and then submit its  final reimbursement demand. (If the fixed payment option is requested, the period is 30 days.)

Since the Portal is designed for the settlement information to be sent by the plaintiff's attorney, the defense attorney or claims professional should have an agreement that the information will be shared as soon as it is obtained. If there are disputes as to certain listed items, a means of addressing those disputes should be worked out between the parties.

We can expect that the proposed regulations, when issued, will recognize a challenge based on the position that a particular listed item is not related to the subject motor vehicle accident, but will not address the separate issue of whether the reimbursement claim is timely.

It should be noted that the system is set up so that the reimbursement figure is lower than the total amount of Medicare benefits that have been paid. The reduction is intended to account for the costs of recovery, including both out-of-pocket expenses and the plaintiff attorney's fee. Most plaintiffs' attorneys will probably expect full payment of the amounts that have been paid by Medicare, as reflected in the Payment Summary, before the reduction. Some may resist sharing the final reimbursement figure with the defense. Of course, all of those issues are subject to negotiation.