On May 19, 2010, the Centers for Medicare & Medicaid Services (CMS) released a new policy memorandum dated May 14, 2010 addressing the separate issues of (a) off label and/or unlabeled outpatient drug uses and (b) rated ages in relation to the agency’s Workers’ Compensation Medicare Set-Aside (MSA) program.

Through the May Memo, CMS sets forth new guidelines regarding when off label and/or unlabeled drugs are covered by Medicare Part D and, thus, includable as part of a workers’ compensation MSA proposal. In addition, CMS has rescinded its previous rated age policy and announced that the MSA submitter will now need to include a very specific rated age “certification statement.”

The June 2010 edition of Settlement News analyzes CMS’ new policies and assesses their potential impact on the MSA process.

• Establishing two methods to calculate and pay conditional payment claims PRIOR to a settlement, judgment, award or other payment;
• Requiring CMS to respond within strict timelines to a request for conditional payment information;
• Extending appeal rights to primary payers and other parties;
• Revising Section 111’s “$1,000 a day, per claim” penalty provision;
• Setting a MSP monetary threshold exemption; and
• Establishing a three year statute of limitations.

CMS’ recent enactment of new policies for calculating future Medicare Part D prescription drug costs for MSA proposals in workers’ compensation cases is perhaps the most significant development on the MSA front in the past few years.

These new policies are currently resulting in alarming and unprecedented increases in required MSA amounts. In turn, this is causing considerable problems for claims handling and settlement on a number of levels – case values are increasing significantly, settling claims is becoming more difficult, and CMS’ inconsistent application of its new policies is creating confusion and uncertainty. 

CMS’ new policies have fundamentally changed the landscape and introduced an added layer of complexity to claims handling and settlement.  Now is the time for all claims handlers and practitioners to assure that they have a firm understanding of CMS’ new policies and how the policies are impacting claims handling and settlement practices. 

This edition of Settlement News places the issue into proper focus to assist claims professionals and practitioners in addressing the problem as follows:

• CMS’ Prior Approach to RX Drugs (1/1/06 to 6/1/09)
   Understanding the Prior Landscape – Where We Have Been

• CMS’ New RX Drug Policies for MSAs (6/1/09 to Present)
   Recognizing & Navigating the New Terrain – Where We Are Now

• Practical Considerations for Claims Handling & Settlement
  What Can I Do to Address the Issue?

• How NuQuest/Bridge Can Help
   NuQuest stands ready to assist the industry in meeting this latest challenge with two new tools  
   specifically designed to address the issues resulting from CMS’ new policies.  Click here to learn
   about NuQuest's Medication Regimen Form and Medication Regimen Comparison.

• Alert - July 13, 2009
• Alert - July 17, 2009
• Alert - July 31, 2009
• Reporting "Do's and Don'ts"

• RRE Registration
• Query Function Testing & Production
• Claim Input File Testing
• Start Date for Claim Input File "Live" Production Submissions
• Start date for TPOC reporting
• Reporting obligations with respect to multiple TPOC amounts

• User Guide & Alert Overviews
• Who Must Report?
• Determining Medicare Status – CMS' Query Process
• Reporting Triggers, Exceptions & Special Reporting Extension
• What Information Must Be Reported?
• Registration/Account Set Up & Other Matters

• Status of Non-GHP User Guide
• Scheduling of Additional Town Hall Conferences
• Establishing a Section 111 Monetary Reporting Threshold
• Establishing a Section 111 "Cut Off" ("Look Back") Date
• Additional Information Regarding the Query Access System
• Status & Information Regarding CMS' Efforts to Establish a "Model Form" to assist RREs in obtaining a Claimant's Social Security Number
• CMS' Updates on Several Other MIR Directives

• A "section by section" comparison between the initial and updated Interim Record Layouts
• An outline of the “deleted” and “new” data fields
• An outline of the changes made to the important "Description" data field contained in the proposed data layout replica
• A detailed "checklist" of the overall changes and modifications made to proposed data layout replica

• CMS' proposed record layout outlining the data and information to be reported by RREs
• Important directives regarding various aspects of the data submission requirements and process
• Introduction of a "Special Reporting Extension for On-Going Claims Resolved (Partially Resolved) Prior to July 1, 2009."

• The requirements for MSA self administration
• Some of the most difficult challenges facing self administering claimants; and
• Practical steps that can be utilized to optimize successful self administration

• The current obligations of liability primary payers under the MSP
• The impact of the forthcoming requirements under Senate Bill 2499
• Considering Medicare's "future interests" in liability cases - Are MSAs applicable in liability settlements?
• A review of the MSA in the Workers' Compensation arena to help better understand the issue from the liability side
• Practical options to address the issue of Medicare's "future interests" in liability cases

• New Amendments to the Code of Federal Regulations - effective March 24, 2008
• Current Obligations of Primary Payers to Reimburse Medicare for Conditional Payments
• Proposed Work Flow and Processes to Protect Medicare's Interests for Conditional Payments

• How the bill applies to Medicare Secondary Payer Compliance
• What is required for compliance with the new bill
• The penalties for non-compliance
• The effective date of the new provisions; and
• Practical Considerations for putting this information into practical use