Top 10 Medicare Secondary Payer Myths Debunked: Part 3

Over the last few weeks, we issued both Parts 1 and 2 of our Top 10 Medicare Secondary Payer (MSP) Myths blog series. This blog is the final Part 3 of the 3-part series containing Myths 7-10. You can review Part 1 of this series by clicking here and Part 2 of this series by clicking here.

Myth #7: The utilization of Artificial Intelligence (AI) in Medicare Set-Asides (MSAs) provides adequate clinical oversight and helps workers’ compensation payers save money on the MSA allocation amount.

Debunking the myth: Generally, we have seen through first-hand experience that current AI technology does not provide a consultative/cost-containment approach to MSAs. 

Sanderson Firm recently reviewed an MSA of a competitor that advertises their usage of AI in their MSAs. We provided a second opinion MSA utilizing evidence-based medicine. The competitor’s AI MSA was over $700,000, whereas Sanderson Firm’s MSA, which was completed by an experienced nurse/Medicare Set-Aside allocator, came in at just over $20,000. We determined that our competitor’s AI MSA was inappropriately high because the AI was unable to integrate actual clinical and legal expertise with conscientious and reasonable use of national evidence-based guidelines. 

Further, Sanderson Firm applied Utilization Review (UR) orders which were upheld by a legally binding Independent Medical Reviewer (IMR) to remove the medications that were no longer the legal responsibility of the workers’ compensation payer. It appears that the AI technology missed this legally binding IMR decision as well. Lastly, we applied evidence-based medicine to our allocation and based physician visits on ODG guidelines; ultimately our approach to the MSA was much more clinically and legally appropriate. 

Best Practices: AI MSAs might save a workers’ compensation payer on the actual MSA report fee as they are advertised as cheaper for the MSA fee. However, as evidenced by the above example, AI MSA providers are not proficient in clarifying conditions or medical care/prescriptions which are not appropriate based upon binding UR/IMR decisions as well as not based in evidence-based medicine. 

Ultimately, AI MSAs will most often end up with a higher MSA allocation due to the lack of oversight, clarification of conditions, application of legally binding decisions such as IMRs in California, as well as cost containment strategies which may be recommended by a consultative MSA professional. 

Myth #8: Relying upon a person’s status of their Medicare enrollment and/or looking to an injured person’s age is a reliable way to determine if they are Medicare eligible.

Debunking the myth: Many individuals under the age of 65 become Medicare eligible. The most common methodology to Medicare enrollment under the age of 65 that we see is someone who is enrolled in Social Security Disability (SSDI) for 24 months or longer which automatically enrolls them into Medicare. We see many individuals in their 30s, 40s, and 50s enrolled into Medicare due to their SSDI status. It is important to query and determine Medicare status on every single claim. Further, so long as the claim remains open, the claim should be queried on a monthly basis to determine whether the person’s Medicare status has changed. 

Best Practices: It is imperative that RREs/primary insurance plans document good faith efforts to obtain/query an individual’s Medicare status. If a person refuses to provide their Social Security Number (SSN) so that the primary payer cannot query the person’s Medicare status, the payer should document all efforts to obtain the SSN and the Medicare status. CMS has provided a model affidavit which should be signed by the injured party if they are refusing to provide the SSN so that the payer can document its file as to its good faith efforts to obtain the SSN/Medicare status. 

Myth #9: Conditional payment notices/correspondence/demands from CMS and Medicare Advantage/Prescription Drug plans should all be treated the same. 

Debunking the myth: The Commercial Repayment Center (CRC) primarily pursues recoveries in workers’ compensation and no-fault claims with open Ongoing Responsibility for Medical (ORM). The Benefits Coordination & Recovery Contractor (BCRC) pursues recoveries in general liability and workers’ compensation claims in which the BCRC is aware of a settlement, judgment, or award. Medicare Advantage (Part C) and Medicare Prescription Drug Plans (Part D) plans pursue their own conditional payment recoveries. There is a BIG difference in timeframes and responses required depending upon the plan type and particular correspondence received. 

Best Practices: It is imperative that RREs/primary insurance plans understand whether the notice is coming from the BCRC or CRC, or a Medicare Advantage/Prescription Drug plan. The first immediate action that a claims payer should perform is to identify the type of correspondence and whether it is a Rights and Responsibilities letter, Conditional Payment Letter (CPL), Notice (CPN), or a Demand. At that juncture, it is important to dispute inappropriate charges timely, as failure to dispute/reimburse timely can cause interest to accrue and the debt to be referred to the U.S. Department of the Treasury. 

Myth #10: Medicare Advantage Plan conditional payments should not be identified proactively.

Debunking the myth: Medicare Advantage Plans have established MSP double damages private cause of action rights via numerous lawsuits nationwide. Starting with In Re Avandia in 2012 (In re Avandia Mktg., Sales Practices & Prods. Liab. Litig., 685 F.3d 353 (3d Cir. 2012)), courts across the country have held that Medicare Advantage Plans may file a lawsuit for double-damages against primary payers for failure to timely reimburse conditional payment amounts. The 11th Circuit (Humana Med. Plan Inc. v. W. Heritage Ins. Co., 832 F.3d 1229 (11th Cir. 2016)), 2nd Circuit (Aetna Life Ins. Co. v. Big Y Foods, Inc., 52 F.4th 66, 70 (2d Cir. 2022)), and 6th Circuit (MSP Recovery Claims, Series LLC v. Nationwide Mut. Ins. Co., LEXIS 55717 (S.D. Ohio Mar. 28, 2022) have also held the same. 

Best Practices: MAP/Prescription Drug conditional payment recovery correspondence most often comes from the MAP/Prescription Drug plan itself; however, at the time of recovery, contractors handle the recoveries for these plans. It is important that claims payers take these notices seriously as MAPs/Prescription Drug plans generally have the same established reimbursement rights as traditional Medicare. Additionally, following the increase in proactive searches due to the above-outlined case law, many of the MAP/Prescription Drug plans now have a backlog of cases. This backlog means that the earlier lien searches are begun, the less likely it is that lien identification will delay settlements. It is important that RREs look at the query data which is returned monthly to RREs and provides a beneficiary’s enrollment information for the last 3 years across Medicare Parts A, B, C & D. Proactive identification, and reimbursement of all conditional payments across all segments of Medicare is recommended. 

For questions or if you would like a copy of the full white paper on all Top 10 MSP Myths, please contact me at heather@sandersoncomp.com.