CMS Prohibited From Collecting for Unrelated Conditions

A Federal Court in California has prohibited the Center for Medicare and Medicaid Services (CMS) from seeking reimbursement of conditional payments when the medical codes for the conditions are unrelated or not related even if the primary code was for a work-related medical condition. The court made the following ruling in a motion for partial summary judgment in a declaratory judgment action.

"The Court shall issue a judicial declaration that: (1) One “item or service,” as used in the Medicare Secondary Payer statute, 42 U.S.C. § 1395y(b)(2)(B)(ii), does not as a matter of law equate to any medical items, devices, supplies, or services that appear under in a single line-item charge on a payment summary form issued by CMS. Rather, a statutory “item or service” simply refers to one indivisible medical item, device, medical supply, or service, regardless of how it is billed; (2) Whether a particular line-item charge on a payment summary form contains more than one indivisible item, device, medical supply, or service is a factual question that must be resolved on a case-by-case basis; (3) If a single line-item charge on a payment summary form contains multiple diagnosis codes—some of which relate to a medical condition covered by the insurance policy administered by CIGA and some of which do not—the presence of one covered code does not ipso facto make CIGA responsible for reimbursing the full amount of the charge; and (4) In the event that a single line-item charge on a payment summary form contains one indivisible item, device, medical supply, or service that is covered by the workers' compensation policy CIGA is administering, and one indivisible item, device, medical supply, or service that is not so covered, CIGA does not have a responsibility to make payment for the uncovered item, device, medical supply, or service just because it was billed under the same single line-item charge as the covered item, device, medical supply, or service."

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"For the reasons discussed above, the Court shall enter (1) an order vacating and setting aside the disputed portions of three reimbursement demands at issue in this lawsuit and (2) a judicial declaration that CMS's interpretation of the MSP is unlawful with respect to reimbursement of conditional payments. The Court declines to issue further declaratory relief or an injunction at this time. 

California Insurance Guarantee Association v Price,  Case No 2:15-cv-01113-ODW (FFMx), 2017 WL 1737717 (05/03/2017)

Medicare Advantage Organization Allowed to Sue Law Firm and Lawyer Over Conditional Payments

A Federal Court has ruled that a Medicare Advantage Organization (MAO) is permitted under the law to sue a law firm and a lawyer for the failure to reimburse conditional medical expenses arising out of an accident. 

US District Court Judge, Henry E. Hudson, ruled that the Medicare Secondary Payer statute created a private cause of action to pursue recovery for conditional payments that it made on the beneficiary's behalf for medical expenses resulting from an automobile accident.

"Although not binding precedent, this Court finds persuasive the Third Circuit's determination that a MAO may pursue recovery pursuant to the private right of action in § 1395y(b)(3)(A). Section 1395y(b)(2)(A)'s plain language establishes a private right of action to recover double damages where a primary plan fails to pay. Absent from the plain language of the statute is any restriction upon who may utilize that private right of action."

Humana Insurance Co. v Paris Blank LLP, 197 F. Supp. 3d 676 (E.D. Virginia 2016)

CMS 2016 Recovery Thresholds for Workers’ Compensation Settlements, Judgments, Awards or Other Payments

2016 Recovery Thresholds for Certain Liability Insurance, No-Fault Insurance, and Workers’ Compensation Settlements, Judgments, Awards or Other Payments 

As required by section 1862(b) of the Social Security Act, the Centers for Medicare and Medicaid Services (CMS) has reviewed the costs related to collecting Medicare’s conditional payments and compared this to recovery amounts.

As of the date of this alert and for the remainder of 2016, CMS will maintain the $1,000 threshold for physical trauma-based liability insurance (including self-insurance) settlements. CMS will also implement a $750 threshold for no-fault insurance and workers’ compensation settlements, where the no-fault insurer or workers’ compensation entity does not otherwise have ongoing responsibly for medicals. 

This means that entities are not required to report, and CMS will not seek recovery on settlements, as outlined above. Please note that the liability insurance (including self-insurance) threshold does not apply to settlements for alleged ingestion, implantation or exposure cases. 

Information on the methodology used to determine the threshold is provided at https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-ofBenefits-and-Recovery-Overview/Non-Group-Health-Plan-Recovery/Downloads/Computationof-Annual-Recovery-Thresholds-2016.pdf

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Jon L. Gelman of Wayne NJ is the author of NJ Workers’ Compensation Law (West-Thomson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thomson-Reuters). For over 4 decades the Law Offices of Jon L Gelman  1.973.696.7900  jon@gelmans.com  has been representing injured workers and their families who have suffered occupational accidents and illnesses.

Related:

Workers' Compensation: CMS Publishes Final Rule for MSP ... May 17, 2016 ... This final rule, effective June 16, 2016, specifies the process and timeline for expanding CMS' existing Medicare Secondary Payer (MSP) Web ... idoctor-health.blogspot.com

Workers' Compensation: CMS Implements SMART Act Functionality ... Dec 21, 2015 ... The SMART Act of 2012 codifies the process to comply with the Medicare Secondary Payer Act. CMS has now implemented an on-line process ... idoctor-health.blogspot.com

Workers' Compensation: CMS Posts WCMSA Self-Administration ... Apr 14, 2014 ... A new WCMSA Self-Administration page has been added to the Workers Compensation Medicare Set-Aside Arrangement section of CMS.gov. idoctor-health.blogspot.com