In this episode of ADJUSTED, Heather Schwartz Sanderson, President at Sanderson Firm PLCC, discusses Medicare compliance, nuances, and future regulations.

Over the last decade, Heather has served as an MSP expert both in Federal class action litigation as well as in litigated matters at the state level. Heather is an award-winning blogger and national speaker on MSP compliance, and a recipient of a 2018 Business Insurance Break Out Award. Heather serves as an Ambassador for the Women to Watch Foundation, a 501(c)(3) entity serving humanitarian initiatives for women. Heather has been an active proponent in Washington D.C. for MSP legislative reform since 2011 and is proud of the industry’s accomplishment of the passage of both the SMART Act (2013) and PAID Act (2020).

Medicare Compliance

WHEN DO YOU CONSIDER MEDICARE’S INTERESTS?  Medicare’s interests always have to be considered in a worker’s compensation claim. There are regulatory requirements to query, register, and report Medicare information. Some common indicators that a claimant may be a potential Medicare beneficiary are:  The injured worker is either on Medicare or reasonably expected to be on Medicare in the next 30 months. The injured worker is currently receiving Social Security Disability benefits, and is expected to be on Medicare in 30 months, or is suffering from End-Stage Renal Failure.

THE HISTORY OF THE MEDICARE SECONDARY PAYER ACT:  The Medicare Secondary Payer Act was passed in 1980, and largely sat unenforced until 2001, when Medicare introduced its Medicare Set Aside (MSA) Program. The whole intent of the Medicare Secondary Payer, and MSA, is to make sure Medicare is not paying for medical treatment, which would otherwise be the responsibility of the workers compensation payer. Prior to this, workers’ compensation settlements would not provide for the Medicare beneficiaries’ future medical treatment.

WHAT IS AN MSA? A Medicare Set Aside is a future medical allocation, as it relates to the worker’s compensation injury. For example, a Medicare beneficiary has a broken leg and may need future medical care later on.  Prior to settlement of the claim, the insurer would need to review the medical records and determine what amount should be set aside in an interest-bearing checking account, to pay for the future medical treatment of the claimant’s leg in the future.

DOES MEDICARE NEED TO APPROVE AN MSA?  It is not required by law to submit an MSA to CMS (Centers for Medicare & Medicaid Services) for approval. The CMS criteria for approving MSA can be time-consuming (this can be challenging when an injured worker wants to settle their claim), and very regimented. CMS requires two years of medical records to approve an MSA, which is not always possible. Whether or not the MSA is submitted to CMS, regulations require that “reasonable” efforts were made to protect Medicare’s interests. The term” reasonable” is not defined, but make sure there are enough funds set aside to cover potential future medical care (review the medical reports to see if the treating physician outlined further medical care needs).

SECTION 111 REPORTING REQUIREMENTS:  Every claim, medical only and lost time, must be queried for Medicare status. If your claimant is 18 years old, you will still query for Medicare Status. Not all Medicare Beneficiaries are 65 and older, or end-stage renal. There are many Medicare beneficiaries that do not fit the normal Medicare criteria, so it is crucial to query every claim. There are new rules coming from Medicare that could potentially fine carriers $1000 per day, per claim for failure to query, register, and report. Medicare has not yet finalized the rule, but it will be finalized by the year 2023.

CHANGES ARE COMING: One major change is the PAID (Provide Accurate Information Directly) ACT, which requires Medicare to report to insurers if claimants are enrolled in Medicare Advantage, or Part D plans. Prior to this change, Medicare was only required to return information to insurers if the claimant was a Medicare Part A and B beneficiary. Their non-reporting of this information, sometimes caused carriers to receive conditional payments and liens post-settlement of a claim. The insurer would then get hit with a double damage lawsuit, even though they were unaware of the claimant’s Medicare Advantage Plan, or Part D enrollment. The testing period for the PAID ACT started in September 2021 and will be in effect on December 11, 2021. It requires Medicare to report Medicare Advantage and Part D enrollment information for the past three years to insurers. There are other proposed changes that are on the way, such as MSA changes. It is very important to stay up to date on these changes, so you can prepare for them.

THE SANDERSON FIRM STRIVES TO MAKE MEDICARE COMPLIANCE COMPREHENSIBLE:  It can be very challenging to try and absorb all of the different Medicare rules, possible penalties, and upcoming changes. If you would like more information on the latest Medicare changes or have any Medicare questions, contact Heather Sanderson at [email protected].  The Sanderson Firm’s goal is to “take a very complex topic, and distill it into something understandable”.