The National Alliance of Medicare Set-Aside Professionals (NAMSAP), "the only non-profit association exclusively addressing the issues and challenges of the Medicare Secondary Payer (MSP) Statute and its impact on workers’ compensation and liability settlements", hosted its 2016 Annual Conference September 14-16 in San Antonio, Texas.
NAMSAP, which also seeks and welcomes opportunities to help improve Medicare set-aside (MSA) industry standards for documentation, work product and business practices, encompasses a highly diverse professional membership consisting of attorneys, MSA allocators, MSP compliance consultants, CPAs, claims professionals, structured settlement consultants, guardians, nurses, pharmacists, rehabilitation professionals, and life care planners.
As S2KM has observed in reports about past NAMSAP conferences (see links below), the combination of membership diversity, subject matter complexity, legislative and regulatory developments plus an expanding MSA market create extraordinary challenges for NAMSAP in planning and organizing its educational programs. This year's conference, co-chaired by NAMSAP President Gary Paturneau and Michelle Allan, should be congratulated for setting new standards for attendance (180) and sponsor/exhibitors (15) as well as the quality and organization of the speakers and extensive handout materials. The conference educational program was divided into two parts: an "MSP Crash Course" and the General Conference.
NAMSAP 2016 CONFERENCE
TOPICS AND SPEAKERS
MSP "CRASH COURSE"
- MEDICARE SECONDARY PAYER ACT 101 - Dan Anders and Leslie Schumacher
- GENERAL ANATOMY OF THE WCMSA REFERENCE GUIDE - Jake Reason and Kathleen Wyeth
- WHAT WOULD CMS DO? - Barbara Fairchild and Erin O'Neill
GENERAL CONFERENCE
- CONFERENCE INTRODUCTION - Gary Paturneau and Michelle Allan (Co-Chairs)
- MEDICARE ADVANTAGE ORGANIZATION CASE LAW - Ciara Koba; Heather Sanderson Hon Lee Yeakel; Jennifer Jordan
- CIVIL MONETARY PENALTIES - Katie Fox; Monika Boswein
- CURRENT STATE OF CONDITIONAL PAYMENT RECOVERY - Michele Carey; Shawn Deane; William Delaney
- PRIMARY PAYER APPEALS - Deborah Robinson Stewart; Melissa Woitalewicz; Kim Young
- ADVENTURES IN ALLOCATING - Christine Melancon; Beth Hostetler; Jake Reason
- SUBMISSION VS. NON-SUBMISSION (OPT-OUT) FOR WC - John Cattie; Jennifer Jordan; MeLinda Petit; Robert Sagrillo; Mark Sidney; Rita Wilson; Mark Walls (Moderator)
- LIABILITY MSAS - David Cherry; Roy Franco; Thomas Spratt
- SETTLEMENT LANGUAGE - Joy Brewer; James Raines; Vincent Quatrini
- CONFLICTS WITH STATE LAW - Jeanmarie Calcagno (IL), Rodney McColloch (GA), Joseph Schneider (TX)
- WCMSA RE-REVIEW PROCESS - Carmen Folluo; Shannon Metcalf; Kimberly Wiswell
- MITIGATING COSTS WHILE PROVIDING QUALITY CARE - Amy Bilton; Amy Lee; Mark Pew; Pamela Schweitzer.
- WHAT IS AFFECTING STAKEHOLDERS - John Cattie; Doug Holmes; Greg McKenna; Gary Paturneau
NOTEWORTHY NAMSAP PRESENTATIONS
Among NAMSAP's many outstanding conference presentations, S2KM found the following most noteworthy from a structured settlement perspective:
- The "Crash Course" presentation "Medicare Secondary Payer Act 101", which also featured an informative Medicare Overview and included exceptional handouts, did not reference structured settlements. With that single proviso, however, this NAMSAP presentation successfully captured, organized and communicated applicable information and data better than any prior presentation S2KM has attended - and should become part of the core curriculum for future educational programs offered by the National Structured Settlement Trade Association (NSSTA) and the Society of Settlement Planners (SSP).
- Another NAMSAP "Crash Course" presentation which arguably should have, but did not, discuss structured settlements, was titled: "General Anatomy of the WCMSA Reference Guide". Specific references to "structured settlements" exist throughout the WCMSA Reference Guide - see, for example: Table of Contents 5.0; 5.2; 19.3; Appendix 3 (Glossary entry for "structured settlement"); and Appendix 5:15. Paradoxically, and more importantly, the subtitle for this NAMSAP's Crash Course presentation (the "Final resting place for the old CMS memos"), is critically important for understanding why structured settlements provide an inherent cost advantage, compared with cash, in funding WCMSAs - as S2KM first explained in this 2013 blog post and which appears to remain just as applicable and important in the context of CMS WCMSA Reference Guide Version 2.5.
- Only one NAMSAP 2016 conference presentation ("Settlement Language") substantively addressed structured settlements issues. Significantly, based upon S2KM's review, the structured settlement documentation included with the NAMSAP conference handouts for this presentation raised potential tax issues and highlighted a fundamental problem. The CMS WCMSA Reference Guide Glossary defines "structured settlement" as "[a] settlement in which the agreed-on funds are paid from an initial deposit and subsequent deposits on a regular basis for a given amount of time." Unfortunately, there is no specific link in the CMS WCMSA Reference Guide to either structured settlement tax law generally or the tax definition for “structured settlement” in IRC 5891(c)(1) or the tax requirements of IRC 130 and 104(a)(1) more specifically. Settlement documentation which may satisfies CMS, therefore, does not automatically satisfy the IRS.
- The concluding NAMSAP panel discussing "What is Affecting Stakeholders" provided a valuable, if overly brief, summary of the complex Federal and state legislative and regulatory developments re-shaping personal injury claim management and settlement planning. Although many of the Medicare-related developments were addressed individually by separate NAMSAP presenters, the "Big Picture" perspective helped to reinforce how dramatically and quickly systemic changes are redefining the marketplace. For the structured settlement industry to expand and retain a leadership position within these dynamic claim management and settlement planning markets, it follows (at least from S2KM's perspective) that industry leaders must improve their collective knowledge of the changing landscape (much of it related to government benefits) in order to help industry participants learn to re-position their sale from a stand alone alternative product to a critical component of integrated claim and settlement solutions.
ADDITIONAL S2KM OBSERVATIONS
During the NAMSAP 2014 Regional Conference, then NAMSAP President Michael Westcott explained why structured settlements and MSAs produce "a perfect match that also saves stakeholders 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.
Just as Westcott pointed out in 2014, structured settlements continue to be underutilized in 2016 - especially considering the inherent cost advantage CMS has provided for structured settlement funding of WCMSAs compared with cash. Among the reasons (from S2KM perspective): a strategic knowledge gap separates most of the structured settlement industry from the MSP community creating, especially for structured settlements, educational needs but also business opportunities. Some examples and thoughts:
- Among a diverse, intelligent and influential group of NAMSAP speakers, 15 exhibitors and 180 attendees, only six structured settlement brokers attended this year's NAMSAP conference; none of whom were featured speakers; and only one broker company exhibited. No structured settlement annuity provider representatives attended or exhibited.
- NSSTA's current Certified Structured Settlement Consultant (CSSC) certification program does not cover MSAs, or the MSP Act or government benefits more generally. This educational omission probably results, at least in part, from NSSTA's historic political and marketing slogan that: "structured settlements enable injury victims to live free of reliance on government assistance".
- Regardless of its historic accuracy and/or value, this political/marketing slogan now appears not only false but contradictory and counterproductive. For many of the most promising and strategic structured settlement submarkets (including not just MSAs, but also special needs trusts, the Affordable Care Act, and the ABLE Act) the challenges and growth opportunities require integrating structured settlements with government benefits.
- In 2014 NSSTA commissioned separate surveys of senior claims executives, claims professionals and plaintiff attorneys. Significant for Medicare and MSAs, two thirds of the senior claims executive survey participants said they believed that structured settlement broker/consultant skills had stayed the same compared to 10 years ago and that they would value more educational and informational services about MSA requirements. They also recommended that structured settlement broker/consultants expand their Medicare services. Claims professionals, when asked their preferred areas for more education, gave their highest response by far (71%) to MSAs.
- Providing a "carrier perspective" on MSA compliance during their 2014 NAMSAP Regional Conference presentation, claims executives William Paxman and Todd Reimer pointed out that, although MSA issues are increasingly complex, they tend to align plaintiff attorneys and defendants - a decidedly positive characteristic for the structured settlement industry which has struggled historically with plaintiff vs. defendant broker "issues".
The structured settlement and Medicare Secondary Payer communities of professional practice increasingly overlap and share complementary knowledge and clients. A more formal working relationship that encompasses their respective professional associations and addresses shared educational, marketing, legislative, and regulatory considerations would likely improve and further expand both communities.
MSP ACT AND MSA BACKGROUND
MSAs are administrative and funding mechanisms utilized in certain categories of settlements to protect Medicare's interests as "secondary payer" under the MSP statute. Enacted in 1980, the MSP Act requires certain insurers, including liability, automobile, no-fault and workers compensation insurers, to make payment first for services to Medicare beneficiaries regarding claimed injuries, with Medicare responsible only as a “secondary payer.”
The Centers for Medicare & Medicaid Services (CMS), the Federal agency responsible for administering Medicare policies, failed to take practical steps to enforce the MSP rules until 2001 when it issued the first of several policy memoranda addressing workers compensation (WC) MSAs. These policy memoranda created a format, checklists and procedures for seeking approval for WCMSAs to "protect Medicare's interests" when workers compensation cases are settled.
Several of these WCMSA policy memoranda address, directly or indirectly, structured settlement issues. One of these policy memoranda (dated October 15, 2004) addresses WCMSA present value calculations and provides an important pricing advantage for annuity funding compared with lump sum funding.
During 2013, CMS published both an 88 page WCMSA Reference Guide - since updated to Version 2.5. The Reference Guide's intended purpose is to help WCMSA professionals, beneficiaries and other stakeholders "understand CMS' [WCMSA] amount approval process and to serve as a reference for those electing to submit such proposals to CMS for approval." CMS has also published a WCMSA Self-Administration Toolkit to help self-administrators manage their WCMSA accounts appropriately. Both the Reference Guide and the Toolkit prominently feature structured settlements.
Although CMS and its field offices have also issued informal guidance about the use of MSAs in liability cases, nothing comparable exists to the CMS WCMSA memoranda, WCMSA Reference Guide or the WCMSA Self-Administration Toolkit. As a result, there currently is no consensus among tort practitioners as to whether and when MSAs are required in liability cases. Lack of CMS guidance has not prevented an increase in the number of liability MSAs, according to leading professional MSA administrators. Unlike WCMSAs, however, liability MSAs typically are not submitted to CMS for approval.
S2KM Reporting for Prior NAMSAP Conferences
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