The National Alliance of Medicare Set-Aside Professionals (NAMSAP) hosted its 2008 Annual Meeting October 2 in Washington, D.C. One hundred and thirty-six members attended including attorneys, insurers, life care planners, MSA administrators and structured settlement professionals.
Founded in 2005, NAMSAP is a non-profit organization devoted to improving Medicare set-aside arrangements (MSAs) and to facilitating compliance with Medicare conditional payment recovery. NAMSAP has over 600 members who are responsible for the vast majority of MSA submissions to the Center for Medicare and Medicaid Services (CMS). CMS is the Federal agency within the U.S. Department of Health and Human Services responsible for enforcing the Medicare Secondary Payer (MSP) rules.
Although the MSP rules were enacted by Congress in 1980, CMS did not begin to enforce the MSP statute until 2001. Beginning July 2001, CMS has enforced the MSP statute by recommending MSAs for certain categories of workers compensation (WC) commutation settlements. Since 2001, CMS has issued a series of policy memoranda for WCMSAs, several of which address structured settlement issues. These CMS WCMSA policy memos are available for download on this CMS website.
On December 29, 2007, President George W. Bush signed into law the "Medicare, Medicaid and SCHIP Extension Act of 2007" (MMSEA). Beginning July 1, 2009, Section 111 of MMSEA requires liability insurers (including self-insurers, no-fault insurers and workers compensation insurers) to:
- Determine Medicare status for all claimants; and
- Report all claims involving a Medicare beneficiary to CMS when those claims are resolved.
If the reporting for any claimant is not done in a timely manner, MMSEA authorizes CMS to enforce a civil penalty of $1000 per day per claimant. These information requirements and penalty provisions provide the basis for expanded enforcement by CMS of the MSP statute.
CMS stated recently that it currently receives, on average, 1550 WCMSA submissions per month - and this number appears to be increasing. According to NAMSAP leaders, the vast majority of WCMSAs are self-administered and a high percentage of WCMSAs are funded with structured settlement annuities. Because of the "set-off" method CMS requires for determining present value, structured settlement annuities currently have a cost advantage over lump sum alternatives.
CMS also accepts rated ages from annuity providers to determine the funding period for WCMSAs unless state law specifically limits the length of time that workers compensation (WC) covers work-related conditions. CMS most recently addressed age rated annuity rules in its August 20, 2008 policy memorandum. The August 20, 2008 CMS policy memo states in part:
"Unless a submitter furnishes acceptable proof of a Rated Age for a claimant, CMS will estimate the claimant's remaining life expectancy using Actual Age. Acceptable proof of Rated Ages includes independent rated ages on the letterhead of an insurance carrier or settlement broker and a statement from the submitter that all rated ages obtained on the claimant have been included."
NAMSAP Meeting Highlights
NAMSAP Accomplishments - NAMSAP President Rob Lewis summarized NAMSAP's 2008 accomplishments:
- Increasing membership
- Increasing revenues
- Funded participation on the MARC coalition steering committee
- NAMSAP position paper for CMS
- Active listserve and committees
- NAMSAP ethics statement
- MSA educational resources including:
- Annual meeting
- Webinar series
- Updated certification program
- National training program for structured settlement consultants
Medicare Action Recovery Coalition (MARC) - Roy Franco, Director of Safeway's Risk Management Strategies and Acting Chairman of MARC spoke about "Medicare and Liability Claims - Turmoil in the Trenches".
- In discussing the MMSEA requirements for liability cases, Franco said "the issue is not just about reporting". He asked "what will the government do with the data" and predicted a "claim freeze" as liability insurers and self-insureds wait for resolution and approval before they pay claims.
characterized the MMSEA MSP rules as an attack on traditional best
practices for liability claim management. He predicted legal challenges
and criticized MMSEA rules for:
- Required consent;
- Immediate reporting;
- No safe harbor for liability insurers;
- Lack of time limits, due process, or reimbursement mechanism;
- Disregard for state tort laws;
- Disenfranchisement of senior citizens;
- Legal impossibility to report all settlements and awards
- Franco outlined MARC's Action Plan priorities for MMSEA including:
- Change the law - or, alternatively, obtain an injunction to stop its July 1, 2009 implementation;
- Raise public and legislative awareness;
- An October 8, 2008 Steering Committee meeting;
- Increased MARC membership.
H.R. 2549 and WCMSA Reform - Douglas Holmes, President of UWC, spoke about WCMSA reform focusing on pending U.S. House of Representatives bill H.R. 2549.
- Holmes summarized H.R. 2549's goals including:
- No CMS review where the MSA cost is less than the MSA benefit;
- Streamline CMS approval process;
- Establish an MSA appeal process;
- Consistent and efficient MSA procedures;
- State WC laws define the primary obligation;
- Medicare shares the cost of protecting its own interests;
- Creating clear legal authority for MSAs.
- Holmes stated CMS is not cooperating with Congress. He cited CMS' failures to respond to:
- Congressional requests for data to determine whether H.R. 2549 is revenue neutral;
- Supplemental Congressional letters and requests for meetings.
Ethics and Multi-Disciplinary Approach - A panel discussion of NAMSAP members addressed ethical issues that arise when attorneys, nurses and structured settlement consultants collaborate on MSA cases. Participants included: Aaron Frederickson; Robert Brown; Karen Cofield; and Christine Phillips. Although this discussion was important and valuable, the topic deserves and requires more time and would benefit from a comparative analysis of existing standards of professional conduct as well as hypothetical case studies.
NAMSAP Committee Reports - NAMSAP currently has four committees whose chairpersons provided summary reports:
- Membership - Ann Major
- Government Affairs - Henry Kohnlein
- Education - Leslie Schumacher
- Ethics and Standards - Tom Spratt
Additional Presentations - The following presentations completed the NAMSAP educational program:
- Pharmacy Trends - Robert Esgro
- Coding - Jason Beans
- CAT Claims - Jon Gice
- Mandatory Insurer Reporting - Mark Popolizio and John Williams
Congratulations to NAMSAP, especially President Rob Lewis and Education Chairperson Leslie Schumacher, for a valuable and well-organized educational program. Lewis closed the meeting by announcing the election of Robert Brown and David Korch as new NAMSAP Directors.
For additional information about:
Release 44 of "Structured Settlements and Periodic Payment Judgments" (S2P2J) will include an update on Medicare set-aside arrangements.