A Thank You Note from Heather Sanderson; 2022 Medicare Secondary Payer Year in Review

As 2022 winds down, I want to thank our valued clients, vendor partners, colleagues, employees and subscribers for the continued support and partnership. Because of your support, Sanderson Firm has experienced significant growth in its client base and has become trusted counsel and MSP compliance services vendor to some of the nation’s most well-recognized self-insured blue-chip companies, insurance carriers, and third-party administrators. As we enter 2023, I am energized about what’s to come as Sanderson Firm works tirelessly to continue to prove what makes us different: passion, experience, and diligence.

With that in mind, I want to revisit a few notable MSP events in 2022 that might serve as food for thought as we usher in a new year of necessary MSP compliance for 2023.

Medicare Set-Asides in Workers’ Compensation Claims: Non-Submit MSAs Persevered

On January 10, 2022, the Centers for Medicare & Medicaid Services (CMS) issued an updated WCMSA Reference Guide to include a new Section 4.3 which seemed to indicate that any non-CMS approved MSA would be unrecognized and deemed a burden shift to Medicare However, a month later, CMS hosted a webinar addressing frequently asked questions on MSA issues and seemed to backtrack on this policy of not recognizing Non-Submit MSAs. During the webinar, CMS stated that the new Section 4.3 was not a new policy and that it will recognize reasonable Non-Submit MSAs. In March of this year, CMS amended Section 4.3 to mirror these statements provided in the webinar and to clarify confusion around the original January section 4.3 update to the WCMSA Reference Guide, namely, to clarify that reasonable Non-Submit MSAs will be recognized.

Looking to 2023: One year later, Non-Submit and Evidence Based MSAs continue to be utilized in workers’ compensation settlements. 42 CFR 411.46(d)(2) provides legal authority for parties to establish a reasonable non-submitted allocation which protects Medicare’s interests. Further, there is no legal or statutory requirement requiring that parties submit an MSA to CMS for review and submission remains voluntary.

Medicare Set-Asides in Liability Claims (LMSAs)

Just a few months ago, the pending Notice of Proposed Rulemaking (NPRM) around MSP and Future Medicals, also known as the LMSA rule, was withdrawn by CMS. This notice being withdrawn indicates that the Proposed Rule is no longer pending, and it provided no indication as to whether the Proposed Rule will be re-filed.

What does this withdrawal of the NPRM mean for LMSAs, and will CMS attempt to file another Proposed Rule regulating the protection of Medicare’s interest in liability claims? This remains unknown. Perhaps rather than taking the regulatory/legislative route in providing guidance on LMSAs, CMS will issue administrative guidance through memoranda/Reference Guide in 2023 instead, but this is merely speculation. It is unknown what the future may hold, and in the interim, parties settling liability claims with Medicare beneficiaries are currently without clear guidance on future medical obligations in liability claims.

Looking to 2023: Working with an MSP expert that can look at each case uniquely to analyze the specific facts of the settlement, the settlement language, and the overall MSP compliance strategy is highly recommended in this nebulous time.

Conditional Payments: Medicare Advantage Plan (Part C) Recoveries Grow Post-PAID Act 

Time is flying by as it has already been two (2) years since Congress passed the Provide Accurate Information Directly (PAID) Act and 1 year since the PAID Act became effective on December 11, 2021. The PAID Act requires the Centers for Medicare & Medicaid Services (CMS) to provide Non-Group Health Plan (NGHP) (workers’ compensation, general liability, and no-fault payers/plans) Responsible Reporting Entities (RREs) with Medicare Advantage Plan (Part C) and Medicare Prescription Drug Plan (Part D) enrollment information as part of the Section 111 query response file. The PAID Act also requires CMS to provide Part C & Part D plan enrollment information for the previous three (3) years, including up to 12 plans/instances.

Looking to 2023: As discussed in Stacy Piazza’s most recent blog, litigation continues to be filed and case law established around Part C Medicare Advantage Plans’ ability to file a MSP private cause of action and recoup double damages if the primary insurance plan has not reimbursed the Part C plan its alleged conditional payment lien. Recent case law might suggest that a proactive approach to resolving Part C conditional payments would be recommended for primary workers' compensation, general liability, and no-fault payers.

MMSEA Section 111 Reporting: Civil Monetary Penalties; CMS Hosts NGHP Webinars to Address Section 111 FAQs

The text of the Final Civil Rule on Civil Monetary Penalties (CMPs) was sent earlier this year to the White House OIRA office for review. The pending release date of the Final Rule is just two months away, anticipated to be released in February of 2023. Once the Final Rule becomes effective 60 days after it is released, CMS may start penalizing noncompliant workers’ compensation, general liability, and no-fault plans/entities for CMPs up to $1000 per day/per claim.

CMS hosted several webinars on Section 111 reporting this year to address frequently asked questions which were extremely helpful to the industry, and we applaud CMS for its outreach.

We do want to clarify one point from our most recent blog where we stated that CMS does not share TPOC information with Medicare Advantage Plans (MAPs). After gathering clarity from a MAP provider, we were notified that CMS does not share TPOC amounts (though it does share other TPOC information) with MAPs.

Also, as noted in the same prior blog, CMS has now published its annual recovery threshold for 2023. The annual recovery threshold will remain $750, which means that RREs are not required to report (and CMS will not seek recovery) on settlements below $750. This threshold has remained unchanged since 2017, so 2023 will continue to see the same reporting threshold continuity in the face of impending reporting penalties.

In summary, all of this is to say that 2023 will be another busy year for MSP compliance. However, I’m confident that, together, we can successfully navigate all the twists and turns, and continue to provide innovative and unmatched MSP compliance services. Thank you for the trust you place in us to do our part and thank you for your business and continued partnership.

Wishing you all the best for a strong, healthy, and happy end to 2022, and cheers to the journey ahead of us.

Heather Sanderson

Founder and President