Roberto Ceniceros

Most self-insured employers have their third-party administrator manage their Medicare reporting and compliance requirements, but others have turned to independents, several sources say.

The independent companies specialize in Medicare Secondary Payer compliance and reporting requirements under Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007.

Cost considerations, settlement speed and administrative ease are among issues at stake for employers and the subject has stirred debate among providers about which model best serves self-insured employers.

Section 111 of the 2007 law requires parties that are deemed to be responsible reporting entities, including self-insured employers, to notify the U.S. Centers for Medicare & Medicaid Services when there is any workers compensation, liability or no-fault claim with a medical component that involves Medicare-eligible beneficiaries.

Meanwhile, Medicare secondary payer provisions prohibit Medicare from paying for medical care when payment is available from insurance plans, such as a workers compensation or general liability insurance settlement.

Medicare secondary payer compliance includes reimbursing Medicare for medical care conditional payments it has made when coverage is available through an insured or self-insured plan. Medicare makes the payments on the condition that it will be reimbursed in such cases.

Compliance also includes Medicare set-aside arrangements, which require parties settling a workers comp claim to reserve funds from the settlement for a claimant’s future medical expenses.

The reporting requirements, conditional payments and set-aside arrangements are a “three-headed monster,” said Ken Paradis, CEO of North Reading, Mass.-based Crowe Paradis Services Corp., a Medicare secondary payer compliance company.

They need to be considered jointly because Section 111 reporting provides CMS with a “treasure map” to find conditional payments or push for set-aside arrangements, Mr. Paradis said.

When seeking conditional payments, CMS sometimes incorrectly has charged employers for medical costs that are not part of an underlying claim. An example would be a claimant who is treated at a hospital for a workers comp injury and, while there, receives care for an unrelated health condition, Mr. Paradis said.

He said his company specializes in negotiating down charges CMS seeks to collect from employers.

But conditional payments cannot be negotiated to reduce inaccurate charges 60 days after a claim has settled, Mr. Paradis said. After 60 days, the conditional payment turns into a lien. So claims adjusters need information to help them determine an appropriate conditional payment amount early on, before a claim reaches settlement and Section 111 reporting is completed, Mr. Paradis said.

But not all TPAs possess the expertise and technology required to provide their claims adjusters with that information, Mr. Paradis said.

Some TPAs that offer Medicare compliance and reporting services handle it in-house, but many contract with specialty vendors to handle those tasks, several sources said.

David Richard, senior vp and chief technology officer at F.A. Richard & Associates Inc., said the Mandeville, La.-based firm has in-house Medicare compliance experts.

Specialty providers have convinced some self-insured clients that TPAs do not possess the needed expertise, but Mr. Richard said his TPA saves time by not passing data and claims reports to an outside provider handling Medicare compliance and reporting. His company’s adjusters can share claim file information and collaborate with their colleagues specializing in Medicare compliance, he said.

Allowing a TPA to manage Medicare reporting and compliance is more efficient, said Tom D. Pfingstag, senior vp and director of program management at TPA Sedgwick Claims Management Services Inc. in Memphis, Tenn.

“The ability for us to share information electronically within our four walls obviously makes it significantly quicker and easier to do in-house rather than sending it out,” Mr. Pfingstag said.

The potential of losing sensitive data also increases when another provider is included in servicing a claim, he said.

Ellen Vinck, director of risk management for the San Diego-based BAE Systems Ship Repair Inc., said it made sense for her TPA, F.A. Richard, to handle Medicare reporting and compliance because it already manages the other aspects of claims against her company.

“They already have all the information, so it seemed silly not to have them do it,” Ms. Vinck said.

But many large self-insured employers turn to Bradenton, Fla.-based Gould & Lamb L.L.C. to consolidate their Medicare compliance efforts when they contract with multiple TPAs, said John Williams, CEO and president of Gould & Lamb L.L.C., which specializes in Medicare compliance services.

Consolidation eases large, self-insured employers’ administrative burden because they otherwise would have to register each TPA with the government and obtain proof from each TPA that it meets government mandates to avoid penalties for noncompliance.

“For a self-insured (employer) with a large program that has multiple TPAs involved, from a management prospective, our process is simply easier to work with,” Mr. Williams said.

Self-insured employers hiring the independent vendors to oversee their Medicare compliance most often do so because they contract with multiple TPAs, Sedgwick’s Mr. Pfingstag said.

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This entry was posted by Adam V. Russo on Wednesday, March 31st, 2010 at 8:15 am and is filed under Health Care Legislation, Medicaid, Medicare, Third Party Administrators. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.