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On August 10^th, Pete Stark Chairman of the Subcommittee on Health for the House Ways and Means Committee sent a letter to the GAO requesting an examination of “issues surrounding Medicare Secondary Payer rules as they apply to Non-Group Health Plans.  The letter discusses the purposes of the MSP in the context of liability and workers’ compensation cases.  In addition, it points out that the Congressional Budget Office has estimated that through Mandatory Insurer Reporting required by Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 $1.1 billion would be saved by Medicare over 10 years based upon elimination of “improper payments.” 

The letter went on to discuss two pieces of pending legislation related to the MSP.  First is HR 2641 which relates to workers’ compensation Medicare set asides.  HR 2641 legislatively establishes a requirement to create a Medicare set aside in workers’ compensation cases; provides a safe harbor for MSAs that are 10% of the settlement value; set a threshold value for MSA review and create statutory review as well as appellate process for set asides (which are sorely needed).  Second is HR 4796,  HR 4796 is entitled the Medicare Secondary Payer Enhancement Act (“MSPEA”).  The MSPEA would permit plaintiffs and their counsel to make a voluntary calculation of a conditional payment, which Medicare would have the right to oppose within a specified timeframe; lift requirements to reimburse the Medicare Trust Fund if the total settlement size was less than $5,000 or if the settlement involved ongoing responsibility for other medical payments of not more than $5,000; absolve insurers from CMS’s requirement that entities reporting a potential or actual settlement provide the beneficiary’s Medicare or Social Security number to help track the claims.  As the letter indicates, to date Congress has not acted on these bills.

Representative Stark requested the GAO examine a number of issues due to “concerns reported by NGHPs involving their interactions with CMS on issues where Medicare is the secondary payer.”  The following issues were identified:

1)      “What aspects of CMS’s reporting and settlement procedures create challenges for non-group health plans and what options could help address them?”

2)      “What are the current MSP workload, costs, and the amount of collections from the non-group health plans and how is that anticipated to change under mandatory reporting?”

3)      “What process does CMS use to track spending on beneficiaries who have received MSAs in workers compensation settlements and how much of the MSA money has been used to pay for Medicare-covered services?”

4)      “What have been CMS’s timeframes for responding to requests from settling parties for information on Medicare’s interest in settlements?”

These are some very important issues raised by Representative Stark.  Investigating these issues could lead to significant changes in the MSP and MSA polices as well as procedures.  Hopefully it will be good change.  More clarity and law relating to MSAs is definitely not a bad thing.  As it stand now, the MSA process and guidelines is all based on informal CMS policy and not law.  We need more law and definition regarding MSAs.  In addition, changes are needed related to conditional payments as well and would be welcomed if it speeds up the process of resolution.