Flagship Services Group Blog

Robert J. Finley

Robert J. Finley, a partner with Hinshaw & Culbertson LLP, has litigation and trial practice experience focused in tort, employment and healthcare. He also counsels firm clients under health plans, auto, property/casualty, no-fault, and workers compensation policies on Medicare repayment and Medicaid reimbursement compliance. Robert advises Flagship Services Group on high value matters, in administrative hearings, and with educational solutions involving Medicare Secondary Payer issues. For more information, visit: https://www.hinshawlaw.com

Recent Posts

Early Takeaways from CRC NGHP Applicable Plan Appeals Webinar

Sep 29, 2020 7:11:58 PM / by Robert J. Finley posted in MSA, civil monetary penalties, Robert Finley, Flagship Services, CMP, MSP, Medicare, Medicare Second Payers, section 111

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On September 24, 2020, CMS hosted a webinar for Commercial Repayment Center Non-Group Health Plan Applicable Plan appeals covering standard appeal requirements, authorization letters, and six common situations which are subject to appeal. CMS provides these instructions and reminders for the Applicable Plan or its Authorized Recovery Agent to use during the redetermination (“appeal”) phase after any initial Medicare demand dispute is denied. This is required information for Applicable Plans and their Authorized Recovery Agents to stay current and updated on CMS’ administrative appeal processes.

 

The important takeaway here is that you can greatly increase success on appeal through timely and complete submission of all documentation, routine follow through on those appeals, and, in the first instance, recording accurate data in the Section 111 claim input file. Implementing best practices for anticipating and responding to Medicare demands will most likely reduce the frequency and length on these claims and, ultimately, avoid Department of Treasury collection referrals.

 

Plot your course. Be proactive. Create winning compliance strategies in line with best claims handling procedures and business judgment rule

 

Standard Appeal Requirements

A request for redetermination must be submitted no later than 120 days from the date of receipt of Medicare’s demand letter (assumed to be five days after the demand date, unless there is evidence to the contrary). Depending upon the basis of the appeal, there may be specific information and documentation that must be provided to sustain the appeal request. Note that this information must be provided on company letterhead or otherwise indicate its source.

Generally, the following documentation must be submitted by the Applicable Plan (or authorized recovery agent) for any level of appeal along with an explanation why the demand (also known as the initial determination) is incorrect:

  • Name of the party or, or the authorized representative of the party
  • Name of Beneficiary
  • Medicare Number
  • Date of Incident (DOI)
  • Summary of injuries from the incident specific service(s) and/or item(s) for which a redetermination is being requested
  • Specific date of service(s), and
  • An explanation of why the applicable plan or authorized recovery agent disagrees with the Medicare’s initial determination

Reminder: Authorization/Letter of Authority Requirement

An authorization (typically the Letter of Authority, or LOA) must either already be on file or submitted simultaneously with the redetermination request if the identified debtor wishes to be represented by another party in resolving the demand. Appeal requests from any entity who is either not the identified debtor (the Applicable Plan) or an authorized representative will be dismissed. An authorization may be submitted with a request to vacate the dismissal but delays in receiving an appeal request from a duly authorized entity means that the identified debtor runs the risk of their appeal request then being dismissed for not being submitted timely. Be sure to review model language for authorizations and include a cover letter or other identifying information to link your authorization to a recovery case.

What is and is not Subject to Appeal

By regulation, the Applicable Plan may only appeal the amount and/or the existence of the debt. Any appeal with any other basis will be dismissed.

Appeals of the amount and/or existence of the debt may be based upon one or more of the following situations

  • Termination of Ongoing Responsibility for Medicals (ORM) due to benefits exhaustion
  • Termination of ORM due to settlement or other claim resolution
  • Benefits Denied/Revoked by Applicable Plan
  • Non-covered Services
  • Unrelated Services
  • Duplicate Primary Payment

Termination of Ongoing Responsibility for Medicals (ORM) due to Benefits Exhaustion

Situation:

The Applicable Plan asserts it does not have primary payment responsibility for some or all the dates of services included in the demand on the basis that the no-fault policy limit has been reached and benefits exhausted as outlined in the policy or plan.

Documents Needed:

  • Cover letter that contains all required as outlined above.
  • Payment ledger that demonstrates benefits were appropriately exhausted that accumulates to the reported policy limit (appropriate exhaustion means payment for specific services rendered by physician or facility). The documentation must include
    • Date(s) of service
    • Total amount of claim(s) billed
    • Amount paid to Provider
    • Date processed/payment was made
    • Name of recipient of processed claim or payment (note if reimbursement was made to beneficiary for out of pocket payment)

 

 

Reminders:

  • The Applicable Plan may not make primary payment to the physician, provider, or other supplier or beneficiary after receiving a Medicare demand latter in lieu of paying the Medicare demand.
  • The CRC may request a declaration page that documents the plan’s no-fault policy limits if the policy limit asserted in the appeal differs from the reported policy limit.
  • Applicable plans must combine Med Pay and PIP limits for a given policy and ORM must be maintained until both the PIP and the Med Pay benefits are exhausted.

Termination of ORM due to Settlement or Other Claim Resolution

Situation:

            The Applicable Plan asserts it does not have primary payment responsibility for some of all the dates of service included in the demand letter as ORM has terminated due to a settlement, judgment, or award, or for another reason (for example, treatment ended in the absence of requirements such as lifetime medicals). Generally, Medicare claims with dates of service between ORM effective and termination dates are the responsibility of the CRC to recover from the Applicable Plans.

Documentation Needed:

  • Cover letter that contains all required elements as previously outlined.
  • A copy of the complete settlement documentation should be provided complete with signatures and effective dates

Please Note:

  • If ORM has terminated due to benefits exhausted, then follow the guidance for ORM termination due to benefits exhaustion.
  • If ORM has terminated due to policy being terminated or lapsed, then provide supporting documentation that outlines policy effective dates on the Applicable Plan’s or authorized recovery agent’s letterhead.

Benefits Denied/Revoked

Situation:

When the Applicable Plan or authorized recovery agent asserts that a Worker’s Compensation or No-Fault claim was denied or that benefits were revoked based on incident incurring health costs occurred during (or after) a violation of coverage policy, or State or Federal Law

Documentation Needed:

  • Cover letter that contains all required elements as outlined above.
  • Proper documentation must clearly demonstrate and document the benefits for the claim were denied/revoked for the DOI in question
    • Copy of decision letter from the applicable plan to the beneficiary, specific to the DOI, indicating the reason why the claim was denied, or benefits were revoked.

Non-Covered Services

Situation:

An Applicable Plan may use this appeal type when

  • Beneficiary did not submit the required documentation ot the applicable plan needed to process or pay claims for the DOI
  • Service(s) or service provider was not approved or licensed by the state or state law
  • Service(s) required prior-authorization
  • Service(s) were not covered by the plan

Documentation Needed:

  • Cover letter that contains all required elements as outlined above.
  • Proper documentation specific to the DOI in question, that must clearly demonstrate that the services were not covered. Copy of plan documents or policy, indicating what services are not covered or what requirements exist for the policy
    • Date(s) of service
    • Total amount of claim(s) billed
    • Provider Name
    • Date processed/payment was denied
    • Denial code/reason stating services were not covered

Unrelated Services

Situation:

This appeal can be used by the applicable plan and/or authorized recovery agent when one or more specific claims for service(s) or treatment are for a condition unrelated to the accident, date of loss, or incident.

Documentation Needed:

  • Cover letter that contains all the elements as outlined above.
  • Copy of Medicare’s annotated payment summary form or an attestation on an Applicable Plan’s or authorized recovery agent’s letterhead outlining why specific service(s)/diagnosis code(s) are determined to be unrelated.

Duplicate Primary Payment

Situation:

When Medicare and an Applicable Plan both makes primary payment for the same date of service(s) listed on a Medicare demand, the Applicable Plan or authorized recovery agent may provide proof of their primary payment as an appeal.

Documentation Needed:

  • Cover letter that contains all required information
  • Proper documentation, such as a payment ledger form, that must clearly outline the below information
    • Date(s) of service
    • Total amount of claim(s) billed
    • Amount previously paid to Provider
    • Date processed/payment was made
    • Name of recipient of processed claim or payment

Reminder: The Applicable Plan or authorized recovery agent may not make primary payment to the Provider/Supplier/Beneficiary after receiving Medicare demand letter in lieu of paying the Medicare demand.

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Dog Days of Summer

Aug 24, 2020 12:27:09 PM / by Robert J. Finley posted in MSA, civil monetary penalties, Robert Finley, Flagship Services, CMP, MSP, Medicare, Medicare Second Payers, section 111

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1. Civil Money Penalties. The Office of Information and Regulatory Affairs recently provided an Overall Description of Deadline on Medicare Secondary Payer and Certain Civil Money Penalties. Specifically, “Per the CMS notice published December 30, 2004 (69 FR 78442), except for certain Medicare payment regulations and certain other statutorily-mandated regulations, we schedule all Medicare final regulations for publication within the 3-year standardized time limit in the current Unified Agenda (or, February 18, 2023). We do not intend to delay publishing a Medicare final regulation for 3 years if we are able to publish it sooner.” It follows that Civil Money Penalties will be finalized and published within the next 30 months.

Medicare Secondary Payer and Certain Civil Money Penalties (CMS-6061)

2. Webinars. CMS hosted a webinar on August 13, 2020, following the release of updated NGHP Section 111 User Guide (v.5.9), and, on September 24, 2020, CMS will be hosting a Commercial Repayment Center NGHP Applicable Plan Recovery Appeals webinar. Of note, during the August webinar, CMS spent a good amount of time addressing the use of correct injury codes and no-injury codes, reporting timelines, recent common errors, and proper no-fault policy limit reporting. CMS’ itinerary suggests a focus on the underpinnings of pending Civil Money Penalties. As well, CMS discussed that “indemnity-only settlements” are not reportable under Section 111 citing to the text and purpose of the statute which is for recovery of medical payments. Notwithstanding, one might pause to also consider the current User Guide language on this subject is unchanged, and CMS’ also reiterated its general principle that the User Guide remains the authoritative text for interpreting Section 111. Finally, the Section 111 webinar also covered a variety of other subjects such as ORM guidance in support of multiple reports within a single quarter; TPOC reporting thresholds applying to physical-injury as distinguished from exposure-type claims; reporting agent changes; the CMS Alert instructing PIP and med-pay coverage under the same policy are to be reported as combined limits; and recent technical changes to Medicare Secondary Payer Recovery Portal (MSPRP) were highlighted as well.

3. Medicare Part C Case Law Update. Aetna won summary judgment against a corporate Defendant Big Y under MSP Act Private Cause of Action, based on the settlement of a personal injury case in federal district court of Connecticut. The significance of this decision is the heightening exposure to and eroding insulation from Medicare repayment claims against every party to a personal injury settlement.

The personal injury action was settled for $30,000.00. Aetna paid $9,854.16 in medical expenses on behalf of Plaintiff/Medicare beneficiary. The undisputed facts cited to by the Court find that beginning in September 2015, prior to the settlement, Aetna began to place the Defendants on notice that it was asserting a lien against any recovery or settlement in the case for the value of the medical expenses it covered. On March 10, 2016, Big Y allegedly agreed that it would not send the full amount of any settlement to Plaintiff or her attorneys without first addressing Aetna's claim. Notwithstanding, in September 2016, Big Y sent the full settlement amount of $30,000.00 to Plaintiff and/or her lawyers. Neither Plaintiff nor Big Y reimbursed Aetna for the covered expenses.

The Aetna court explained the rule, “Courts that have considered the question have held that a plaintiff seeking reimbursement under the Private Cause of Action provision of the MSP Act must establish: (1) that the defendant is, in fact, a primary plan responsible for paying a particular expense; (2) that the defendant failed to provide primary payment or, as relevant here, appropriate reimbursement to the secondary payer/plaintiff, and (3) damages. See Western Heritage, 832 F.3d at 1239; Humana, Inc. v. Shrader & Associates, LLP, 584 B.R. 658, 677 (S.D. Tex. 2018) (separating element one into two elements and leaving out damages as an element). Next, the Court framed the issue, “The parties do not dispute the amount of the covered medical expenses. Nor is there any claim by Big Y that it reimbursed Aetna for those medical expenses. The dispute here is whether Big Y was a primary plan under the MSP Act.”

The Court summarized Big Y’s argument as follows: “There is a factual dispute as to its status as a primary plan… Big Y has always denied any liability to Guerrera and has always taken the position that it was Guerrera's own negligence that caused her fall; the settlement agreement contained an express denial of liability; in an effort to manage litigation costs and to secure finality, Big Y made a "nuisance" settlement offer to Guerrera; the offer was conditioned upon a general release containing a broad indemnity and hold harmless agreement; and the settlement did not identify the purpose for the settlement funds nor allocate the funds between the various of Guerrera's claims, i.e. economic vs. non-economic injuries.”

Rejecting the corporate defendant’s arguments, the Court decided that Big Y is a Primary Plan that had primary responsibility for Plaintiff’s medical expenses under the MSP Act Private Cause of Action, awarding summary judgment in favor of Aetna, a Medicare Part C Plan, because:

“Under the MSP Act, a primary plan must reimburse the secondary payer if it is "demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service" paid by the secondary payer. 42 U.S.C. § 1395y(b)(2)(B)(ii). A primary plan is defined under the MSP Act, in part, as "a workmen's compensation law or plan, an automobile or liability insurance policy or plan (including a self-insured plan) or no fault insurance[.]" 42 U.S.C. § 1395y(b)(2)(A). Subsection 1395y(b)(2)(B)(ii) further provides that "[a] primary plan's responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon the recipient's compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan's insured, or by other means." 42 U.S.C. § 1395y(b)(2)(B)(ii). Courts have consistently held that a tortfeasor, insured or self-insured, can be a "primary plan" for purposes of the MSP Act. See 42 U.S.C. § 1395y(b)(2)(A) ("An entity that engages in a business . . . shall be deemed to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance, or otherwise) in whole or in part."); Collins, 73 F. Supp. 3d at 666 ("Congress amended the MSP in 2003 to include tortfeasors and their insurance carriers" within the definition of a primary plan.); Brown v. Thompson, 374 F. 3d 253, 261-62 (4th Cir. 2004) (finding that Medicare, as a secondary payer, was entitled to reimbursement from a tort settlement paid by a self-insured tortfeasor recognizing that the act provides that "a business can create a self-insured plan through its failure to obtain insurance" which evidenced Congressional intent to give the term "self-insured plan" a broad definition.).”

As to damages, the Court found Aetna entitled to $19,708.32 as double damages for Big Y’s failure to reimburse Aetna under MSP Act. The Court reasoned, “The courts have generally recognized this provision's allowance for double damages. See, e.g., Mason v. Amer. Tobacco Co., 346 F.3d 36, 42-43 (2d Cir. 2003) (recognizing an individual's right to double damages from a primary plan that wrongfully refused payment); Manning v. Utils. Mut. Ins. Co. Inc., 254 F. 3d 387, 391-92 (2d Cir. 2001) (same); In re Avandia, 685 F.3d at 359 ("[W]e find that the provision is broad and unambiguous, placing no limitations upon which private (i.e., non-governmental) actors can bring suit for double damages when a primary plan fails to appropriately reimburse any secondary payer."(emphasis added)); MSPA Claims 1, LLC v. Kingsway Amigo Ins. Co., 950 F.3d 764, 767 (11th Cir. 2020) (noting that the Private Cause of Action provision "rewards successful plaintiffs with double damages"); Stalley v. Catholic Health Initiatives, 509 F.3d 517, 527 (8th Cir. 2007) (noting that individuals "could recover double damages to vindicate their private rights when their primary payers fail to live up to their obligations").

Not to be overlooked, the Court also decided that Aetna had a valid, enforceable breach of contract claim under its Part C Plan against its member/the Plaintiff, but not against the other parties including Plaintiff’s attorneys; and, the Court rejected Aetna’s fiduciary duty claims under Connecticut state law because it’s not enough just to issue notice of repayment claim. The important take-away here is Medicare Part C Plans remain steadfast and resourceful in presenting good faith pleading strategies, albeit unsuccessful in this case, seeking alt-MSP Act liability theories against settling personal injury parties, perhaps developing the framework of future disputes.

Aetna Life Ins. Co. v. Guerrera

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Decision Point: Z Code Conundrums

Jul 20, 2020 6:26:08 PM / by Robert J. Finley posted in MSA, civil monetary penalties, Robert Finley, Flagship Services, CMP, MSP, Medicare, Medicare Second Payers, section 111

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The fact pattern is simple and straightforward: A Medicare beneficiary is involved in a covered occurrence which necessitates an office or emergency room visit. A reasonable and necessary examination is conducted by a physician which results in no diagnosis. For example, your 75-year old father visits your home and, while napping after a lively family meal, rolls off the couch hitting his head, elbow and hip on the hardwood floor. He has pre-existing conditions related to his hip, so, despite crotchety resistance, he is taken to the emergency room to be checked out. After an outpatient examination, including radiological tests of his head, elbow and hip, he is released from the hospital without any symptoms, specific diagnosis or follow up plan. Everyone goes back home thankful he is OK. Your father receives the hospital bill for $5,000 (with no injury and external cause ICD-10 codes). He makes a claim which is covered and paid by your homeowner’s no fault/PIP insurance policy. 

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Updated NGHP User Guide Available

Jul 9, 2020 12:11:33 PM / by Robert J. Finley posted in MSA, civil monetary penalties, Robert Finley, Flagship Services, CMP, MSP, Medicare, Medicare Second Payers, section 111

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Version 5.9 of the NGHP User Guide is available for download here. Summary of version 5.9 updates:

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Tea Leaves and Time Bombs

Jul 2, 2020 4:24:24 PM / by Robert J. Finley posted in MSA, civil monetary penalties, Robert Finley, Flagship Services, CMP, MSP, Medicare, Medicare Second Payers, section 111

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Today’s headlines on Coronavirus in America:  cases surging, states reversing re-opening, nearly half adult population is without a job, and data on Medicare nursing home facility cases and deaths.  The federal Medicare Hospital Insurance program (Part A) already faces challenges serving an aging population, increasing enrollment, and rising costs with funding overwhelmingly dependent upon tax revenue in the form of income and payroll taxes. In comparison, Medicare Supplementary Insurance and Prescription Drug Programs (Parts B and D essentially providing physician, outpatient, and medication) are financed through beneficiary premiums and general revenues.

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Summer School: Briefing Key Cases in 2020

Jun 23, 2020 11:03:37 AM / by Robert J. Finley posted in MSA, civil monetary penalties, Robert Finley, Flagship Services, CMP, MSP, Medicare, Medicare Second Payers, section 111

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Keeping an eye on a few key cases from around the nation during the first half of 2020.

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Chicken Soup for Section 111: Boiling Down the Public Comments on Proposed Civil Money Penalties

Jun 1, 2020 3:39:52 PM / by Robert J. Finley posted in MSA, civil monetary penalties, Robert Finley, Flagship Services, CMP, MSP, Medicare, Medicare Second Payers, section 111

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On May 11, 2020, the 47 public comments were published regarding CMS’ proposed rule under MSP for imposing Certain Civil Money Penalties. The comments were submitted by a variety of entities with diverse perspectives from across the country including corporations, underwriters, state insurance funds, third party administrators, health insurance companies, workers compensation insurers, property and casualty associations, responsible reporting entities (RREs), MSP vendors, law offices, risk management organizations, defense attorney organizations, corporate counsel organizations, health and wellness organizations, and integrated delivery and financing systems (IDFS). Many submissions raised similar concerns, so we tapered down those raised by the commentators into 12 major themes and provide key discussion points underscoring each. CMS is expected to assess and reply to these comments as part of its ongoing ruling making process.

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Opportunity for Improvement

May 5, 2020 3:41:57 PM / by Robert J. Finley posted in MSA, civil monetary penalties, Robert Finley, Flagship Services, CMP, MSP, Medicare, Medicare Second Payers

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We are living through historic times. COVID-19 may result in permanent changes including how and where we normally work; while, during this same period, the Medicare Secondary Payer (MSP) industry may see CMS finalize and publish regulations regarding how and when to calculate and impose civil monetary penalties (CMPs) upon group health plan (GHP) and non-group health plan (NGHP) responsible reporting entities (RREs) which fail to meet reporting obligations.

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A Closer Look at Proposed Section 111 CMPs: Recovery Information Contradicts Reporting

Apr 14, 2020 1:27:56 PM / by Robert J. Finley posted in MSA, civil monetary penalties, Robert Finley, Flagship Services, CMP, MSP, Medicare, Medicare Second Payers

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In this, our final of a three-part series taking a closer look at each of the key pillars in CMS’ new proposed rules for Civil Monetary Penalties (CMP).  Our first two parts looked at Failing to Register and Report, Registering and Reporting, and Poor Quality of Reported Data, Poor Quality of Reported Data.

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A Closer Look at Proposed Section 111 CMPs: Poor Quality of Reported Data

Mar 31, 2020 6:29:00 PM / by Robert J. Finley posted in MSA, civil monetary penalties, Robert Finley, Flagship Services, CMP, MSP, Medicare, Medicare Second Payers

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There is a season for every purpose.  Are you reporting as required?  Is your reporting data accurate?  Do the errors matter?  What is your error tolerance level today, and what are its historical tendencies?  Is your data transparent and timely?  When do repayment and reporting intersect?  Who can reliably audit your current compliance level to determine whether you even have a reporting issue?  How can our current reporting procedure undergo a risk evaluation?

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