June 6, 2023
Rasa Fumagalli JD, MSCC, CMSP-F
The Medicare Secondary Payer Act impacts workers’ compensation, liability, and no-fault settlements involving a Medicare beneficiary. This month’s “Since You Asked” column addresses a situation where Medicare incorrectly denies non-injury-related treatment after a workers’ compensation case settles.
Question:
My client settled a workers’ compensation case that involved an injury to the metatarsals of her right foot about six months ago. Since she was on Medicare at the time of the settlement, the workers’ compensation insurance carrier reported the settlement to Medicare. My client is now receiving treatment for a completely unrelated right ankle condition which is being denied by Medicare because of her workers’ compensation settlement. What is going on here?
Answer:
This situation may be due to an issue with Section 111 Mandatory Insurer Reporting that was done by the workers’ compensation insurance carrier’s Responsible Reporting Entity (RRE). Section 111’s Mandatory Insurer Reporting (MIR) provisions generally require workers’ compensation insurers to report all workers’ compensation settlements to Medicare that involve Medicare beneficiaries. This is called a Total Payment Obligation to Claimant (TPOC) report. There is also an obligation to report the assumption of an Ongoing Responsibility for Medical (ORM) when the accident is accepted. This reporting requirement helps Medicare recover improper payments and avoid making inappropriate payments in the future.
When a workers’ compensation insurer reports a settlement to Medicare, the RRE must provide the injury victim’s first name, last name, date of birth, gender, Medicare Beneficiary Identifier (MBI), and Social Security Number (or the last five digits). Additionally, the RRE must report International Classification of Diseases (“ICD”)-10 diagnosis codes for the illnesses/injuries alleged, claimed, or released in the settlement. CMS encourages RREs to supply as many valid ICD-9/ICD-10 Diagnosis Codes as possible for the most accurate coordination of benefits. In your client’s case, the RRE may have reported an overly broad diagnosis code for an injury to the right leg, instead of a specific injury to the metatarsals of the right foot resulting in Medicare’s denial of the post-settlement treatment.
The beneficiary’s medical provider may be able to help address this situation. The February 23, 2021, Medicare Learning Network article (MLN Matters Number: SE21002) advises providers about the appeal process to follow when Medicare denies treatment due to an open or closed Liability, No-Fault, or Workers’ Compensation MSP record on the beneficiary’s Medicare file.[1] When Medicare inappropriately denies a claim because the diagnosis code on the unrelated claim and in the beneficiary’s MSP Section 111 settlement reporting record are the same or similar, the provider should appeal the inappropriately denied claim with the Medicare Administrative Contractors (MACs). The appeal should explain and provide support that shows the services are not related to the injury reported on the MSP record. The article also advises the provider not to bill the Medicare beneficiary for the inappropriately denied claim but to resolve the claims issue with the appropriate MAC.
When faced with this unfortunate situation, we recommend that you reach out to the workers’ compensation insurance carrier to seek assistance in correcting the Section 111 settlement report. The provider should also be able to assist with the inappropriate denial by filing an appeal with the MAC. A proactive approach whereby both parties discuss and agree upon the diagnosis codes to be reported under Section 111 Mandatory Insurer Reporting when settling, generally helps to limit these types of problems post wash out of the claim.
Given these complexities, turn to Synergy Settlement Services team of MSP compliance attorneys to help guide you in the MSP compliance maze.
[1] https://www.cms.gov/files/document/se21002.pdf
