Anders: MSAs, Professional Administration Provide Much Needed Assurances
Tuesday, March 21, 2017 | 506 | 0 | min read
These first few of months of 2017 have been, to put it mildly, volatile in national politics.
The incoming Trump administration and a Republican Congress are poised to tackle the federal budget, Medicaid and the Affordable Care Act (Obamacare), among many other federal programs.
All of these issues have sharp partisan divides. However, no matter where your views lie on the political spectrum, if you are a professional involved in the workers' compensation industry, these issues may have a big impact on how you can be successful at your job.
This article looks at what impact the Trump administration and a Republican-controlled Congress may have on Medicare Set-Asides (MSAs) in the context of the legislative and regulatory history of the Medicare Secondary Payer (MSP) Act, and how the uncertainty resulting from potential changes to federal health care programs results in MSAs and professional administration being even more relevant in the settlement of workers’ compensation cases.
The MSP Act has been, and remains, bipartisan
A review of the history of the MSP Act demonstrates a noticeably bipartisan effort to improve, and expand, its applicability and enforcement mechanisms. The MSP Act was enacted in 1980 during President Carter’s administration. Subsequent to its passage, provisions were added over the Reagan, George H.W. Bush and Clinton administrations, all emphasizing Medicare being secondary to group and non-group health plans.
The most notable legislative expansion occurred in 2007 when a Democratic-controlled Congress passed, and President George W. Bush signed into law, the Medicare, Medicaid and SCHIP Extension Act, which included Section 111 Mandatory Insurer Reporting provisions for group and non-group health plans. There also continues to be a decade-long effort to pass bipartisan legislation that would implement certain reforms to the Workers’ Compensation Medicare Set-Aside (WCMSA) review process. While the most recent WCMSA reform bill died in the last Congress, it is expected a new bill will be reintroduced in 2017.
Besides legislative expansion of the MSP Act, during President George W. Bush’s administration there occurred the release of the July 23, 2001, CMS memo, commonly called the “Patel memo.” The Patel memo and subsequent CMS memos effectively formalized a process for CMS to review and approve WCMSAs.
MSA reviews continued, Medicare conditional recovery processes expanded and Section 111 was implemented, all during the course of President Obama’s administration. The only legislative change to the MSP Act occurring during the Obama years was the passage of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act), which was a successful bipartisan effort to address deficiencies identified in the MSP Act, particularly Section 111, reporting and Medicare conditional payment recovery.
Since the enactment then of the MSP Act in 1980 it has continued to be expanded and enforced consistently across both Republican and Democratic presidents and Congresses.
Why has there not been a partisan divide? The simple reason is that the MSP Act forces entities other than the federal government to pay, which has benefits for both political parties. For Democrats it demonstrates their protecting the viability of a federal government entitlement program, while for Republicans it demonstrates their protecting taxpayers by shifting costs away from the government.
While the Trump administration has to our knowledge never issued any MSP policy statements, based upon the past bipartisanship on this issue our expectation is the administration will continue and possibly expand the MSP compliance programs at CMS.
Uncertainty over federal health care programs to drive assurance with MSAs
President Trump has indicated repeatedly that he will not reduce benefits to Medicare beneficiaries. Nonetheless, Medicare beneficiaries are facing premium increases. Notably, a Kaiser Family Foundation report indicated that Part D premiums are rising by an average of 9% in 2017.
As for Medicaid, the Trump administration is supporting a block grant program, which would give more discretion to the states in formulating and implementing their own Medicaid programs compared to the present process that includes significant federal oversight.
Finally, and most significant, is the Republican-led initiative to “repeal and replace” the Affordable Care Act, commonly known as Obamacare. These potential changes to statutory programs create uncertainty for injured workers contemplating settlement of medical in their workers’ compensation cases.
Uncertainty for injured workers exists with programmatic changes to Medicare and private group health plans, which are increasingly driven by a more value-based approach to health care delivery. A value-based approach provides incentives to medical providers to be more cautious with prescribing treatments and medications that may have limited value to the patient. This is also usually tied in part to a utilization review process, which places limits on care through the use of evidence-based medicine.
While in the past some injured workers have settled medical stemming from their work-related injury — confident that they could shift their ongoing work-related care, if any, to their group health plan — such coverage may now be limited. And when it comes to shifting costs to Medicare, CMS’s long-standing policy is that such costs must be accounted for in an MSA.
A flight to certainty
Accordingly, injured workers and their attorneys, when settling their workers’ compensation cases, will look for certainty where it can be obtained so that they have the assurance of access to medical care for their future injury-related care. For claimants who are Medicare beneficiaries or are close to becoming Medicare beneficiaries, such assurance can be obtained by a properly allocated MSA that is CMS-approved, when necessary, and professionally administered to maintain the MSA funds over life expectancy in compliance with CMS rules.
Tower MSA Partners is committed to providing employers and claimants a reasonable MSA allocation that, along CMS guidelines, properly accounts for future injury-related and Medicare-covered medical care without unnecessary overfunding. This often includes Tower MSA reaching out to treating physicians to confirm current care regimens or clarity regarding ongoing medication and treatment prior to submission of the MSA to CMS.
While CMS approval of the MSA and subsequent funding provides assurance at the point of settlement that funds for injury-related medical have been provided, equally important is proper administration of those funds such that an injured worker can be assured the funds for his or her care will last over their life expectancy and that there will be a seamless transition to Medicare for payment if the funds ever run out.
Ametros’ professional administration service, CareGuard, secures for injured parties discounts on medical treatment and prescription costs. All the while they are free from utilization review, allowing them to not have to worry about their treatment being rejected.
Additionally, CareGuard will make sure all MSA expenses are accounted for in the eyes of Medicare. Cost-effective programs like CareGuard are in place to protect the injured worker post-settlement and ensure compliance with CMS requirements for MSA administration.
In this current era of high uncertainty, all parties can rest easy by focusing on known methods to protect themselves and the injured party throughout the claim handling and settlement process. That’s why many believe it is more critical than ever to obtain an adequate MSA that will cover the ongoing medical care of the injured party and, upon settlement, to have a professional administrator help the injured party make the funds last as long as possible, and do all the required Medicare reporting.
Daniel Anders is chief compliance officer for Tower MSA Partners. This column, which was written with the assistance of Porter Leslie and Jayson Gallant of Ametros, was reprinted with permission from Tower’s MSP Compliance Blog.