Getting on top of changing Medicare compliance issues

Getting on top of changing Medicare compliance issues

Medicare compliance can be a slippery slope that requires insurers stay up to date on changing regulations and updated provisions to reduce liability. But insurers should adhere to three fundamental steps to compliance in 2023, according to Mark Popolizio, VP of compliance at risk assessment firm Verisk:

  1. Get a Medicare game plan in place to address the various components of this program.
  2. Establish protocols around the various aspects of Medicare compliance.
  3. To understand that, in many cases, insurance companies have greater power to meet the challenges that Medicare Secondary Payer (MSP) compliance presents than they might have initially thought.

Popolizio spoke with Insurance Business about how insurers can use PAID Act data to reduce liability, staying on top of CMS and Section 111 updates, as well as details about lowering workers’ compensation costs.

Creating a game plan

The most integral element to successfully handling Medicare compliance this year is establishing a strategy that is on top of the latest trends, upcoming changes and proposed amendments. “I think it is imperative to set up a game plan first if you haven’t already done so,” Popolizio said. “Make sure to include best practices that are current, this will provide you with a basis of preparedness in the face of any proposed revisions.”

Part of any successful Medicare plan of action is establishing protocols around various compliance issues. “Whether seeking out regulation changes in CMS or other broader policy substitutions, new user guides or alters, you need to constantly be tuned into various channels to stay as relevant as possible,” Popolizio said.

Insurers must also be aware that they have power to address certain challenges related to MSP compliance. “For instance, the data that is necessary for the insurer to report underneath the Section 111 program, an individual can use that information to address whatever compliance requests that would be necessary based on the facts,” Popolizio said.

Understanding the PAID Act

The PAID Act was officially put into law in late 2021, requiring the Centres for Medicare and Medicaid Services (CMS) to provide Non-Group Health Plan (NGHP) and Responsible Reporting Entities (RREs) with information about a claimant’s Medicare C and Medicare D enrolment status.

While it may not provide lien information, a proactive insurer can use this information to “address potential MAP and Part D recovery claims to avoid potential ‘double damages’ lawsuits,” Popolizio said. “With the PAID Act, an insurer would no longer have to beg a plaintiff for information about their Medicare enrolment. They can now plug in some informational data into the Section 111 system to gain insight into enrolment status.”

However, one point of contention with the PAID Act and its infancy is that the data being reported for Medicare C and D is not always accurate. CMS has tried to rectify this situation by sending out a memo last April, advising C and D providers to improve their data intake and input.

“However, as we see the PAID Act take a deeper hold, the accuracy of data should improve, which is what I am predicting for in 2023,” Popolizio said.

CMS updates

Medicare 2023 Watch List, a report written by Popolizio that details the most pertinent information about the program and some helpful predictions, reveals that the industry is still waiting on confirmation of when CMS’s Section 111 civil money penalties will go into effect.

Initially expected to roll out in February of this year, this provision would charge $1,000 a day for per claim for RREs that fail to register to report or simply fail to report a settlement, judgment, award or other payment with one year are subject to penalization. Similarly, RREs that, when faced with recovery demand, provide information within the dispute or appeal that contradicts information previously reported in Section 111 could also be charged.

Towards the end of February, CMS revealed it would delay the release of this “final rule,” giving itself some extra time to finalize this amendment.

However, in the meantime, insurers should be doing, “if they haven’t already, is to evaluate their Section 111 reporting practices to see how they measure up to what CMS is putting on the table,” Popolizio said.

Per the PAID Act, it is vitally important for insurers to know what type of Medicare the claimant has, which will determine how and where they need to address potential recovery claims, especially considering nearly 50% of Medicare beneficiaries are on Section C, also known as Medicare Advantage, which is privately funded.

And while Section C plans are not reported to CMS, there have been instances where people on this plan have sued insurances companies for double damages, which is why it is even more imperative to know enrolment status.

Overcoming workers’ compensation challenges

Workers’ Compensation Medicare Set Aside, or WCMSA, should also be paid close attention to in 2023 to compliance practices.

“Keeping on top of CMS and WCSMA trends and pricing is paramount,” Popolizio said. “This requires checking to see if the medical records are clean and if or when they need to be updated. Are there opportunities to lower prescription drug costs, such as switching to generic brands? Are there any dosage or formulation changes?”

For over a decade, CMS has tried to formulate rules for liability on the idea of Medicare Set Aside, coming out with proposals that insurance companies went back and forth with to try and come to a mutual agreement and understanding.

In 2022, CMS had handed over their proposals to a government agency for review, but eventually ended up withdrawing, leaving the industry in the dark as to what was on the table and going back to square one. This chaotic atmosphere, should mandate that insurance companies make their own risk and business decisions as the industry waits to see if CMS plans to revisit the issue,” Popolizio said.  

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