Review: Complete Guide to Medicare Secondary Payer Compliance & liability claims


The Complete Guide to Medicare Secondary Payer Compliance
, by Jennifer C. Jordan, Editor-in-Chief (Published by LexisNexis®)
To order by phone, call 1-800-223-1940
To order online, click here

Brand new out from LexisNexis® - This is a complete Guide Book for achieving MSP compliance in workers comp and liability settlements. This book combines a rare industry insider's review of the statutory changes as seen by MSA industry insider, Jen Jordan, General Counsel at MEDVAL LLC, and delivers current relevant case law with case summaries that review where we are at today. I recently received and reviewed parts of an early draft edition and thoroughly enjoyed the reading.

Jen Jordan has been involved in the trenches of structured settlements for workers comp and MSA (Medicare Set Aside) submissions and an active participant in following all the "Town Hall" conferences that CMS has been holding with industry participants regarding the new MSP claim reporting requirements for Workers Comp, Liability and non-group health plans.

I must admit that I have been a longtime reader of the MedVal Blog for updates on MSP developments and MSA requirements. I have personally tracked all the major MSA settlement companies and many of their websites for any MSA updates or information on MSP compliance over the past 8 years. I was always searching for any new consensus of opinion on MSA submissions and MSP compliance. My lengthy search had covered the numerous twists and turns in both the case law and the changes in CMS Memos dealing with workers comp. I also personally reviewed all the changes in the actual wording of the statutory language in the Federal Regulations. This Guide Book saves the reader from my long and somewhat painful search.

This new Guide Book on MSP Compliance and MSA submissions exceeds all of my research efforts to date and delivers a comprehensive beacon of light in an otherwise dark and murky lagoon of disjointed MSA/MSP written information. I have read many of the conflicting or modified answers in Memos issued by CMS since 2001 and read many of the changes in the statutory MSP language and reviewed multiple changes in the MSP claim reporting requirements that had left me and a lot of other people frankly scratching their heads.

Finally, someone delivers a clear, concise reading in this area, with some definitive answers for both lawyers and claims specialists and accurate reporting dealing with MSP compliance and MSA allocations with all of the necessary resources found in one place. This book is a "must read" for anyone responsible for MSP compliance and no, I am not being paid for this endorsement although I will disclose that I recently received a copy of the book for my work in reviewing and providing feedback on early outlines and case law summaries.

Along with a handful of other Illinois workers compensation attorneys, I have ardently followed and analyzed all the CMS Internal Memos and alerts from Medicare. I must admit that I have even used the "Ask Jen" feature on MedVal’s Blog to ask some rather tough questions on my concerns for large Illinois workers compensation settlements with rather large MSA structured settlements that were not exactly covered by any of the reported case law decisions nor answered by any of the CMS Memos. Thankfully, Jen Jordan had provided me with some very direct answers on my tough questions and I have been a faithful fan of the MedVal Blog by her and Ryan Roth ever since.

As everyone knows, CMS has been morphing the Liability and Workers Comp MSP claim reporting requirements that will take effect for carriers and self insureds as of January 1, 2011. This new Guide Book on MSP compliance couldn't be delivered anymore timely or anymore helpful.

And for all those out there that think MSA allocations have nothing to do with Liability settlements, think again. Why on earth would the government mandate the reporting of all liability claims involving Medicare beneficiaries all across the nation if there wasn't an intended purpose? Medicare intends on denying all future Medicare payments for any treatment related to injuries received that are the subject of a liability law suit unless there is an accurate and adequate consideration (read future medical allocation and funding) of “Medicare's interests” at the time of the settlement.

Liability lawyers from now on are going to have to shy away from the standard boiler plate language in a "General Release" and modify their settlement language to suit the circumstances where their client is a Medicare beneficiary or soon to be expected Medicare beneficiary. Jordan's chapter on Liability Settlements is a "must read" for every plaintiff and defense lawyer drafting releases with some practical tips on possible liability MSA applications and even some suggested modified "Release" language.

While liability settlements presently do not go through any of the MSA prior submission process established for workers comp, CMS totally intends on tracking all liability settlements to ensure repayment of their Medicare liens for "conditional" payments made and to prevent any double compensation where future medical monies have already been received in a law suit. The Philadelphia office for CMS has reportedly already hired someone to review MSA liability settlements. That alone should tell you something. In situations of an inadequate recovery due to limited insurance coverage or in situations of incomplete compensation for injuries due to liability issues, this book provides some very practical suggestions for post settlement hearings and findings by the Court as well as modified "Release" language.

Liability plaintiff's attorneys heretofore have had to make an assessment whether to even take a personal injury client's case if the Medicare "conditional" lien payments were expected to exceed the insurance coverage available because Medicare's lien repayments could in fact leave their client with nothing left for compensation for their injuries.

However, there may be some new light shed at the end of that dark tunnel with a recent decision reported by Jen Jordan on the LexisNexis Workers Compensation Blog. See her summary on the opinion in Bradley v. Sebelius recently decided out of Florida that was published on September 29, 2010. Jen's analysis of the Court's opinion is that it supports a position for "apportionment" in Medicare lien repayment cases that settle for less than full value of the claim and/or contain compensation for non-medical claims. Liability lawyers might very well want to read both the summary and the actual decision and continue to read Jen Jordan's further analysis on the LexisNexis Workers Compensation Blog as we wait for some final word on the situation.

Importantly, this new MSP book provides guidelines on accurate MSA submissions for workers comp settlements to prevent over funding of any MSA submissions. It is extremely important for insurance adjusters or lawyers to note and define injuries for which workers comp liability is accepted and state any future medical or body parts that are totally disputed (with the basis for the dispute documented of course) when submitting their MSA proposals and in drafting their settlements. Similar considerations also apply when making any future medical allocations for Medicare’s interests in liability settlements.

This brand new book from LexisNexis will help industry claims people and lawyers alike take control of their settlements by explaining how to:

• comply with MSP reporting requirements and avoid penalties
• avoid pitfalls and delays under CMS’ policies and procedures
• identify which cases to actually submit for CMS review
• achieve better CMS approval rates and avoid overly inflated MSAs
• defend less costly MSA allocations for future medical expenses
• avoid rejection of MSA proposals for inadequate drug information
• understand MSA evaluations and the options for funding MSAs
• and determine when MSAs should be used in liability settlements

That pretty much covers a lot of ground in one complete Guide Book. Twice a year updates are already anticipated as well as more current update coverage on both on the MedVal Blog and on the LexisNexis Workers Compensation Law Community powered by Larson’s.

Jen Jordan will personally be available at the upcoming National Workers Compensation Conference & Expo in Las Vegas, Nov. 10 thru 12th. For more information on the conference see here.

I want to congratulate both Jen Jordan and her editor, Robin Kobayashi, of LexisNexis for an outstanding job on delivering a thoroughly accurate presentation of MSP/MSA guideline information on what has been a constantly morphing and moving target.

Mistakes in this MSP/MSA area can literally cost tens of thousands of dollars and the book is moderately priced at just $179 dollars for the 2010 Edition. To order by phone, call 1-800-223-1940. To order online, click here

Chicago workers compensation attorney -- 11-01-10


Medicare Mandatory Reporting Timelines Revised and Quick Reference Guide


March 29, 2010 CMS issued a Revised Quick Reference Guide for MMSEA Section 111 Registration (updated Oct. 7, 20131) For Responsible Reporting Entities. But note that CMS cautions everyone that you must read the full updated User Guide.

Q: Why does Medicare supply a 43 page "User Guide" to mandatory claim reporting?
Answer: because the full updated User Guide to Mandatory Reporting (Ver 4.0) updated (Oct. 7, 2013) takes up 463 pages broken down into .pdf sub-parts on the CMS website.

It is anticipated that yet even more changes will be forthcoming but for the most part, most of the gross outline of the claim reporting process, the required data elements and the main provisions have taken shape. There have been substantial changes in this updated User Guide edition in response to industry concerns most notably in regard to who is considered to be a reporting entity (RRE) and in dealing with companies that have a deductible in their workers comp policy.

More CMS Town Hall tele conferences are scheduled for later this year up through June 30,2010 to address even more questions and more industry concerns. Because this changing area of law and the actual requirements are still unfolding, either check with an experienced Illinois workers compensation attorney with questions on where to look for answers or hire a specialized consultant in Medicare Secondary Payor requirements that can closely monitor this specialized area for precise reporting compliance.

If you have reporting responsibilities at your company, you should continue to monitor the CMS page on MMSEA very closely for any new developments and monitor the CMS page for Liability Insurance and Workers' Compensation Reporting for the most up to date information.

Chicago Workers Comp Attorneys -- 3-31-10


Illinois Medical Fee Schedule FAQ and Guidelines 2010


The Illinois Workers Compensation Medical Fee Schedule has been supplemented with answers to FAQs generated from recent fee schedule seminars around the state. As a result of common questions posed by the medical community and workers compensation payers, the Commission issued updated Medical Fee Schedule Instructions and Guidelines ( 1/25/10) for treatment occurring after 2/1/09 and they issued a new list of common Medical Fee Schedule FAQs (1/25/10) that were generated directly out of the seminars.

Naturally, the fee schedule generated a lot of interest from hospitals, treating doctors and the health care providers from the community at large. I share the above links for obtaining updated information that may help workers compensation health care professionals in answering some of their more common questions.

If your representatives were unable to attend the official medical fee schedule seminars, the Medical Fee Schedule Power Point presentation can be found here.

Many answers to medical bill questions were already posted on the Illinois Workers Compensation Commission web site found at “Frequently Asked Medical Questions” . Whenever providers or payers have a medical questions, they are encouraged to check this page first.

These detailed billing questions are often outside the normal knowledge of Illinois workers compensation attorneys as they often relate to very specific billing and payment issues. For example, the updates address correct billing modifiers for bilateral procedures. Not your usual type stuff. While our Chicago workers comp attorneys may not know the answer, we often know where to look or who to ask. As yet another uncommon example, the MS-DRG crosswalk is available online here but the Illinois Workers Comp Fee Schedule incorporates the new MS-DRG hospital inpatient codes for treatment after 6/30/09.

We were just recently asked by a physician at what point can they start charging statutory interest at 1% per month on the unpaid balance of their bills?

That answer is contained in Question # 61 in the updated FAQs. Answer: The medical providers can start charging interest on unpaid amounts after 60 days from the date that the workers compensation payer receives "substantially all of the information necessary to adjudicate the bill".

The exact data elements are not specified in the fee schedule but a workers compensation carrier can certainly argue that interest does not apply if customary billing information is missing. All normal relevant information should be completely filled out on the standardized bill.

The Commission acknowledges that the medical fee schedule guidelines and FAQ cannot address all of the possible questions that might arise in practice but they hope that the parties will continue to use common coding procedures and follow common reimbursement practices to fill in any of the blanks that are not explicitly specified in the guidelines or instructions. You can email your remaining fee schedule questions to feeschdquestions.wcc@illinois.gov

If a dispute continues to exist after reviewing all of the answers provided, the only way for a medical provider to get an official ruling from the Commission is for the employee's attorney or for the employer's attorney to take the issue to trial before an Arbitrator. That arbitration decision can then be subject to an appeal for further review by a panel of the Commissioners who will decide disputed cases for the official ruling of the Commission.

We hope the above links will provide helpful answers our doctors, medical providers and payers while the industry continues to adapt to the new fee schedule changes, requirements and procedures.

Chicago Workers Compensation Attorneys -- 03-02-10


Mandatory Claim Reporting Date extended to Jan 1, 2011


CMS MIR update alert advises workers' comp and liability RREs that the compliance date for claim reporting is now extended from 4-1-10 until 1-1-11, effective immediately.

  • All RREs should now be registered with the COBC, and either in or preparing for file testing. Data testing may continue during 2010, as needed.
  • All data exchange testing will be completed by December 31, 2010. RREs that have completed file data exchange testing in place are encouraged to proceed to claim reporting data exchange status.
CMS will post an updated "Section 111 NGHP User Guide" and a number of new Alerts during the week of February 22. CMS is expected to post steps that carriers and self insureds can take to assure their ongoing compliance with the Section 111 claim reporting requirements.

Chicago Workers Compensation Attorney
-- 2-19-10


Back Due Child Support Ordered Paid out of Workers Comp Settlement


Section 21 of the Illinois Workers Compensation Act (820 ILCS 305/21 (West 2008)) prohibits all liens on Illinois workers compensation arbitration awards or settlements. This section specifically provides in pertinent part:

“No payment, claim, award or decision under this Act shall be assignable or subject to any lien, attachment or garnishment, or be held liable in any way for any lien, , penalty or damages."

Under the law, very few liens are allowed on Illinois workers compensation settlements or awards. There are exceptions of course for Public Aid liens and Medicare’s lien for past related payments but generally the purpose of prohibiting liens in Illinois workers compensation is to protect the injured worker from outstanding claims to ensure that the family has sufficient money to support themselves. However, at least one case now finds that Illinois workers compensation settlements are not immune from claims for past due child support.

In a recent case of Illinois Dept. of Healthcare and Family Services v. Bartholomew (4th Dist. 12/8/09) an unmarried father was already under a wage garnishment order against his paycheck for $428 / month for child support and $85 per month for back due child support. In a further administrative order, he was prohibited from "dissipating" his workers compensation settlement of $175,000. The father agreed that the mother should receive 20% of the workers comp settlement money to pay for his current child support obligations but he contested the lien of about $9,000 claimed in back due child support and interest.

This case confirms that the Withholding Act, 750 ILCS 28/15 paragraph (d), considers “income” to mean any source of periodic payment, including workers compensation payments or settlements. Further, Section 20 (c) (3) specifically allows for withholding of “income” for past due child support.

If the workers compensation settlement is for payment for the loss of a hand, foot, leg or other injury, that money may not be considered as “income” for other purposes since it is not "earned income" but really compensation for the loss or partial loss of the worker's body parts. But here, the Illinois General Assembly and our legislators have established that it is our public policy to withhold money from statutorily defined "income" to ensure that all support judgments are enforced by all available means.

Chicago Workers Compensation Attorneys
-- 02-07-10


Illinois Temporary Disability Awarded After Termination for Cause


The Illinois Supreme Court recently upset many Illinois defense attorneys and insurance claims professionals in a hotly contested decision ruling that the employer owes temporary disability benefits even after a "firing for cause" where the worker is on light duty restrictions and has not yet medically stabilized or reached MMI.  
Illinois workers comp attorney

This case has been the subject of some spirited discussion on the Workers Compensation Forum on LinkedIn with worries that injured employees can now start fights, threaten supervisors or even commit crimes leading to their valid discharge and still be able to collect temporary total disability compensation.

For background, an Illinois construction worker, Jeff Urban, was working light duty following a legitimate heat stroke injury and returned to work on light duty when he was allegedly fired for writing religious graffiti on a store room shelf. (yes, this was the subject of an earlier post; Carpenter fired for Religious Graffiti).

It turns out that an ugly argument had erupted over an overpayment in a light duty check weeks following the graffiti incident. Although the worker had voluntarily reported the payroll error to the payroll department, he was confronted in a heated exchange about cashing and keeping the overpayment. The argument escalated when the worker called the local police to the job site to file charges of harassment against an administrative assistant whereupon he was terminated shortly thereafter.

The employer based the termination on defacement of property for writing the religious graffiti on shelves in a store room. The defacement of property would normally be a valid cause for firing in Illinois, but it came out that the graffiti occurred weeks earlier and other workers that scribbled graffiti were not similarly fired. The firing really only occurred after the heated argument over the overpayment in the light duty check which was in fact a payroll error. All temporary disability benefits were terminated following the argument and the employee's termination.

At trial, an Arbitrator denied temporary benefits after termination. The Commission however, reversed and awarded temporary disability benefits focusing on the fact that the injury had not yet stabilized nor reached MMI. They found that the worker was still temporarily disabled from his regular duty job despite the employer's argument about denying benefits over a termination for cause.

In a case of first impression, the Illinois Appellate Court considered the entitlement of a worker to temporary disability pay, or actually temporary partial disability pay, where the worker was working under light duty restrictions but fired for an unrelated cause. Interstate Scaffolding v. Workers Compensation Commission (Oct. 20, 2008, 3rd Dist App.)

The Appellate Court naturally looked to Professor Larson on Workers Compensation Law (see Larson's Worker's Compensation Law § 84.04D Physical Incapacity -- Employee's Misconduct, at 84-17 (2007).

Under prior Illinois law, the right to ongoing disability after leaving light duty employment had centered on whether the departure from light duty employment was voluntary or volitional on the worker's part or whether departure was involuntary due to the work related injury medical disability.

In reviewing cases from other jurisdictions provided by Larson's, the Interstate Appellate Court noted that some jurisdictions do deny compensation where the disability played no part in the discharge citing Palmer v. Alliance 917 So.2d 510, 514 (L.A. Ct. App.2005) and Calvert v. General Motors, 327 N.W.2d 542.546 (Mich. Ct. App. 1982) holding an employee discharged for "just cause" is not entitled to ongoing disability benefits.

Other jurisdictions however were also noted to uphold the right to collect benefits after a firing while on light duty employment only if the employee could prove that the inability to find other employment was related to the job injury disability itself, citing Cunningham v. Atlantic, 901 A.2d 956 (N.J. Super.Ct. App. Div. 2006) and Marsolek v. Hormel, 438 N.W.2d 922, 924 (Minn.1989) (that a justifiable discharge for misconduct suspends the rights to compensation unless the cause of the employee's inability to find other suitable employment is related to the work injury disability)

The Appellate Court found that there was no evidence that the employer terminated the worker merely to avoid paying disability benefits, but rather that it was the worker's own volitional conduct in defacing company property that was the real cause for discharge. The employee would have continued to receive benefits until medically stabilized but for his own misconduct. Accordingly, a divided Appellate Court found temporary benefits after the termination were properly denied.

You can contrast this decision with other recent Illinois Commission decisions in Wleklinski v Kelly Services (08 IWCC 254, March 2008) where a temporary worker at RR Donnelly suffered a wrist sprain accident on 11/14/06 with immediate notice and immediate medical care. The employer terminated the worker for leaving her machine early and failing to punch out on the day of the accident. The employer refused to pay any temporary disability benefits claiming a valid termination and they failed to provide any suitable light duty work. The arbitrator awarded temporary disability benefits and a total of $7,616.07 in penalties and attorneys fees stating that merely severing the employment relationship was not sufficient to sever the employer's obligation to provide ongoing temporary total benefits for an undisputed accident.

In Sapp v Wal-Mart (06 IWCC 459 , May 2006) a 37 year old cashier had an uncontested low back injury lifting a fan into a shopping cart. She was subsequently terminated for absenteeism while on light duty. The arbitrator denied benefits after the termination but the Commission reversed and awarded temporary benefits. The Commission focused on the test for determining ongoing entitlement to disability benefits following the termination as whether the medical condition had reached Maximum Medical Improvement and not just whether the cashier was capable of working light duty. Accordingly, the Commission awarded temporary disability benefits following the termination.

The Illinois Commission previously decided Alicea v. Sysco (06 IWCC 596, July 2006), wherein a 42 year old working for Sysco Food Services injured his right shoulder in an undisputed accident and underwent surgery for a shoulder dislocation but the employer previously fired him for violation of a safety rule during the accident. The employer then denied benefits entirely during a light duty release to return to work arguing that the safety rule violation termination barred the right to temporary disability benefits altogether. The Arbitrator held and the Commission affirmed that the termination based upon the safety rule violation did not entirely remove the worker from the sphere of employment and they awarded entitlement to temporary disability benefits.

Our Illinois Supreme Court considered the question of an employee's "discharge for cause" as a basis for denying temporary disability benefits. The Court looked to the law found in the Illinois Workers Compensation Act and found no statutory authority to justify denial, suspension, or termination of TTD benefits based upon an employee's discharge by his employer for unrelated causes. Interstate Scaffolding v. Workers Compensation Commission. (1-22-2010, Docket # 107852)The "test" according to the Court is, was and always has been whether the employee "remains temporarily disabled" as a result of the work related injury and "whether the employee is capable of returning to the work force."

They noted that the Illinois Workers Compensation Act supports suspension or termination of disability benefits for (1) refusing reasonable medical treatment, (2) for failing to cooperate with rehabilitation efforts or (3) for refusing work which falls within the treating doctor's restrictions however they concluded that no statutory basis exists in the Act for terminating benefits following an unrelated discharge for cause.

The Illinois Supreme Court was emphatic in stating that Illinois is an employment "at-will" state and an employee may be discharged for any reason or no reason at all, but whether the discharge is for a valid cause or whether the discharge is somehow discriminatory are simply matters foreign to Illinois Workers Compensation. The entitlement to ongoing temporary disability compensation is wholly a separate issue and not dependent upon the propriety of the discharge.

There are plenty of laws that govern whether a termination is
proper or wrongful but that issue is not necessarily for the Commission to decide. Its their given job to decide if someone is temporarily disabled from a work related injury and not the propriety of the firing.

According to the Supreme Court, where an employee has been fired for unrelated cause by his employer, the test for deciding entitlement to ongoing TTD benefits remains whether the employee has medically stabilized or whether the employee continues to show that he is temporarily totally disabled from regular work.

Since the Commission found that this employee proved that he remained temporarily totally disabled from regular work as a result of his work injury and he proved that he had not yet reached maximum medical improvement,
the Commission's award of ongoing temporary disability benefits was sufficiently supported by the evidence even in the face of an alleged "termination for cause".

This decision is not to say that the Illinois Workers Compensation Commission won't deny temporary disability benefits in the future where the facts demonstrate that some volitional act of the employee removes him or her self from light duty employment but rather, that a discharge for cause is not a basis for automatic suspension, denial or termination of temporary total disability benefits under the Illinois Workers Compensation Act

Chicago Workers Compensation Attorney
-- 2-03-10