The National Alliance of Medicare Set-Aside Professionals (NAMSAP) Regional Conference, held earlier this month in Miami, Florida, highlighted the strategic importance of workers' compensation Medicare set-aside arrangements (WCMSAs), and the growth potential of structured settlements, resulting from recent legislative and regulatory developments impacting historic personal injury settlement planning models.
Among these recent legislative and regulatory developments:
- The SMART Act.
- CMS WCMSA Reference Guide.
- Bipartisan Budget Act of 2013.
- Implementation of the Patients Protection and Affordable Care Act (ACA).
- HHS/CMS RIN: 0938-AR43 - anticipating publication of MSA rules for liability cases.
NAMSAP is "the only non-profit association exclusively addressing the issues and challenges of the Medicare Secondary Payer Statute and its impact on workers’ compensation and liability settlements".
NAMSAP's membership appears to be the most professionally diversified of any U.S. settlement planning association. The 46 attendees at the NAMSAP Regional Conference included a mix of attorneys, Medicare Secondary Payer (MSP) consultants, CPAs, claims adjustors, structured settlement consultants, guardians, nurses, pharmacists, rehabilitation professionals, and life care planners.
Structured settlement professionals, who comprise approximately nine (9%) percent of NAMSAP's 500 plus members, have played an important role in NAMSAP's development ever since the association was founded in 2004.
Speakers and Topics
Among the featured speakers at NAMSAP's Regional Meeting, Immediate Past President Michael Westcott addressed why structured settlements and MSAs produce "a perfect match that also saves stakeholder on the cost of compliance":
- "A structured settlement is a contract that defines specific future periodic payments for a specific dollar amount for a specified time."
- "An MSA is an agreement with CMS to pay agreed upon future costs for an agreed dollar amount for an agreed period of time."
"Good settlement planning", Westcott added, "requires that all professional advisers know the roadmap to compliance." Unfortunately, he concluded, structured settlements continue to be underutilized amid too much discussion on process and too little on benefits.
During his presentation about the SMART Act, Roy Franco briefly addressed the settlement planning changes likely to result from the Budget Act of 2013, implementation of the ACA and anticipated CMS rules for liability MSAs.
Franco predicted "workers' compensation, liability and no-fault insurers will all become primary payers vis a vis Medicare, Medicaid and ACA health providers" as part of integrated settlement planning models similar to WCMSAs. He added, however, that different state-specific models may develop as state Medicaid agencies begin responding October 1, 2014 to the new Medicaid reimbursement rules promulgated by the Budget Act of 2013.
Multiple NAMSAP Regional speakers addressed case management compliance challenges.
Katie Fox identified and discussed WCMSA case settlement obstacles:
- CMS requests for additional medical reports and pharmacy itemizations.
- Obtaining signed authorizations and scope of those authorizations.
- Failure to proactively address Medicare issues
- Re-allocations with changing numbers as a result of lengthy negotiations.
- Liquidated workers compensation carriers resulting in lost data and miscoded payments.
- Three year statute of limitations prior to final case closure.
William Paxman and Todd Reimer provided a "carrier perspective" on MSA compliance:
- Claim management today is increasingly complex and transparent.
- MSA issues, however, tend to allign plaintiff attorneys and defendants.
- Adjustors are generalists who need to recognize issues and know when to involve specialists.
- No safe harbors and limited regulatory guidance require carriers to develop their own best practices including specific Medicare settlement language.
- Road blocks to settlements:
- Claimant refusals to sign releases or provide information.
- Demands for MSAs when they are not necessary.
- Lack of medical/pharmacy records as well as additional requests for updates by CMS.
- Claimants who are uncomfortable with government and the future management/reporting of medical treatment.
- Section 111 reporting and compliance challenges:
- How will claim adjustors see the “value” of Section 111 when it doesn’t help resolve cases faster for less money and increases their workload?
- Training challenges resulting from higher claim adjustor turnover.
- How to automate section 111 reporting.
- Partial vs. full settlements.
Attorneys Daniel Santaniello, Reinaldo Alverez and Shannon Metcalf discussed "Medicare compliance trends" and how attorneys, their clients and the courts are attempting to decipher the Medicare Secondary Payer (MSP) Act without liability MSA regulations. Their presentation provided examples of problem cases and summarized recent liability MSA-related court decisions.
The NAMSAP Regional Conference featured two presentations about the "impact of the aging workforce" on workers compensation and MSAs.
- Barbara Fairchild reviewed the changing demographics of older workers and related workplace attitudes. 40.2 million Americans were aged 65 and over in 2010. This number is expected to increase to 88.5 million by 2050.
- Tron Emptage discussed the special prescription medication management required for aging workers. For WCMSAs, CMS requires the most recent two years of medical records, last two years of payments, and prescription invoices showing dosage, quantity and frequency of the drugs.
Stephanie Volm and Reinaldo Alverez led the most unusual educational session at the NAMSAP Regional. Titled "MSA Jeopardy", this session consisted of collaborative attendee break-out groups competing with each other to answer questions such as:
- What are the top 12 WCMSA submission errors?
- What are the penalties for not paying the final amount in the demand letter?
- What are 10 things CMS wants to see in WCMSAs?
- Name seven criteria for determining whether a lump sum or structured settlement sufficiently takes Medicare's interests into account.
- How do you obtain a conditional payment letter in a liability MSA case?
- What are the requirements for an annuity in a WCMSA?
NAMSAP's 2014 Annual Conference, celebrating NAMSAP's 10th Anniversary, will take place May 8-9 in Las Vegas.