As what remains of 2022 dwindles into a new year, trending on the Medicare Conditional Payment front garners attention from industry stakeholders. Mounting concerns surrounding Civil Monetary Penalties associated with Section 111 Medicare Mandatory Insurer reporting (rulemaking anticipated by or before February 2023) could increase vigilance and reporting efforts. Additionally,  a recent OIG audit, which coupled with procurement for various contractor positions administering the Medicare Secondary Payer program, pose changes for the last quarter of 2022 and into 2023.

OIG Audit

If you thought Medicare’s collection efforts have been aggressive in the past, a recent governmental report could incent the Agency to find even more money paid out by Medicare.

The Medicare Secondary Payer law exists to ensure that Medicare isn’t making payment when other insurance should, such as workers’ compensation insurance or liability insurance in the event of a motor vehicle accident or other event causing bodily injury. 

Since 1980, Congress has granted Medicare status as a secondary payer in these instances, also equipping the Agency with powerful authority to seek reimbursement to the extent that it can even assert double damages against payers failing to reimburse the Medicare Trust.

But a recent government accountability report suggests that current recovery efforts aren’t fulfilling the demand.

On July 25, 2022, The U.S. Department of Health and Human Services Office of Inspector General published findings based on 148 Medicare audit reports issued during a 27-month period from October 1, 2014, through December 31, 2016, essentially summating that CMS was collecting just over half of the $498 million identified as overpayments.

These types of federal government audits provide oversight on Medicare’s recovery efforts to ensure the fiscal integrity of the Medicare Trust is intact. Research suggests the life expectancy of this health insurance program to be dwindling with revenues sufficient to cover operating costs through only 2028 for Part A Hospital insurance. Although the program is not expected to disintegrate in 2029, without additional revenues, the program will begin to experience shortfalls that could lead to delays and/or denials in payments among other issues.

This most recent audit was conducted as a follow-up to a study spanning a 30-month period ending in March of 2009. A prior study revealed that Medicare had not recovered $332 million of the $416 million believed to be overpayments at that time.  OIG findings and recommendations predicated on the most recent audit include the following:

• OIG verified CMS collected $120 million of the $498 million identified overpayments
• CMS reported it had collected $272 million, but did not provide adequate documentation it had collected the remaining $152 million not verified by OIG.
• CMS did not take corrective action consisting of six recommendations made by OIG, only fully implementing two of the four agreed upon*
• OIG recommended CMS continue recovery efforts for any collectible portion of the $226 million in uncollected overpayments
• OIG recommended that CMS determine what portion of the $152 million was collected and accounted for
• OIG recommended that CMS revise 42 CFR Section 405.980 and corresponding manual instructions related to the reopening period for claims to be consistent with Section 1870 of the Social Security Act.
• OIG recommends developing a plan for resolving costs, including procedural recommendations.

According to the report, CMS concurred with OIG’s recommendation to continue its efforts to recovery any collectible portion of the $226 million in uncollected overpayments.

While this study poses myriad downstream impacts to the MSP stakeholder community in terms of more aggressive recovery efforts, potentially the most concerning finding from OIG is the recommendation to make revisions to popular regulations allowing payers the ability to engage in ongoing appeals of conditional payment amounts the government attempts to collect. Proposed revisions to this series of regulations could alter the timeframes currently available for insurance companies and other payers, narrowing the window of opportunity currently available to file appeals when conditional payment amounts are not owed by the payer.

Procurement

At least two government contractors administering tasks espoused within Medicare Secondary Payer obligations are in procurement, raising the possibility that new contractors could enter the stage in the coming months.

The first contract is that for the Workers’ Compensation Review Contractor, which has historically been tasked with review of Workers’ Compensation Medicare Set-Asides submitted by settling parties to ensure that settlement dollars are earmarked for future claim-related medical treatment so that Medicare will not be asked to foot medical bills down the road. The RFP for this contract has expanded to include review and processing of other Non-Group Health Plan allocation reports, which likely references liability or no-fault Medicare Set-Asides. The industry has braced in a holding pattern for more than a decade in anticipation of rules and guidance surrounding MSAs and submissions set forth by Medicare for liability and no-fault insurance lines, expecting something akin to the existing guidance for Workers’ Compensation Medicare Set-Asides published and circulated by the Agency. A proposed rule currently sits with The White House on the desk of the Office of Management and Budget’s Office of Information and Regulatory Affairs, awaiting final review and publication.

The RFP for the WCRC position anticipates an award date of November 14, 2022. Historically, a change in contractor for this job results in some shuffling about with new personnel, potentially slowing down operations for a spell until the new folks are up and running. The WCRC reviewed approximately 1,600 MSAs per month in 2022 and 1,400 in 2021.

The Commercial Repayment Center, the contractor managing conditional payments specific to workers’ compensation claims, is facing contract expiration. Performant was awarded this contract in 2017, originally held by CGI when the CRC came into existence. The CRC was created in 2015 to work in tandem with the Benefits Coordination and Recovery Center, which managed liability conditional payments. Performant will be completing the fifth year of its five year contract at the conclusion of 2022. Changes surrounding a new CRC have included in the past alterations in the timeframes of correspondence and varying degrees of aggressiveness in collections efforts.

Allan Koba Compliance Solutions continuously monitors industry trends. We offer a full suite of Medicare Secondary Payer services, including Medicare Set-Asides, Medicare Conditional Payment resolution and Section 111 reporting and consulting. For additional information please contact info@allankoba.com.

*Corrective action recommendations published May 18, 2012 included (1) pursuit of legislation to extend the status of limitations so that the recovery period exceeds the reopening period for Medicare payments, (2) ensure its Audit Tracking and Reporting System (ATARS) is updated, (3) ensure CMS collections information is consisted with ATARS, (4) collect amounts made after audit period to the extent the law allows, (5) verify the collected amounts are accurate, and (6) provide specific guidance to contractors about collections.