The United States Government Accountability Office (GAO) has just issued a much-anticipated report entitled, “Medicare Secondary Payer: Additional Steps are Needed to Improve Program Effectiveness for Non-Group Health Plans,” examining the Medicare Secondary Payer (MSP) program. Congressman Pete Stark (D-CA), requested the report on August 10, 2010, requiring that the GAO “conduct a detailed examination of issues surrounding Medicare Secondary Payer rules as they apply to Non-Group Health Plans.”
Non-group health plans include auto or other liability insurance, no-fault insurance, and workers’ compensation plans. Currently, CMS attempts to recover Medicare payments made that were the responsibility of NGHPs, but this is easier said than done, as CMS has not always been aware of these MSP situations. Although CMS oversees all MSP activities and administers the MSP program, contractors perform most of CMS’s administrative activities within the process for MSP situations involving NGHPs. The process for MSP situations that involve NGHPs generally includes five basic components—notification, negotiation, resolution, mandatory reporting, and recovery.
In 2007, with hopes of alleviating this problem, legislation added mandatory reporting requirements for NGHPs, enabling CMS to better become aware of the issues with the health plans. NGHPs, however, reported concerns about the MSP process, and CMS delayed the start of mandatory reporting by NGHPs, in part because of these concerns.
The GAO examined this current situation, and made some interesting findings. First, the Centers for Medicare and Medicaid Services (CMS) workloads have increased dramatically during the recent implementation of mandatory insurer reporting. The GAO identified key related to contractor performance, demand amounts, mandatory insurer reporting, CMS guidance and CMS communication. CMS either has addressed or is taking steps to address some, but not all, of these challenges.
• Contractor performance. Challenges related to the timeliness of the MSPRC and WCRC were identified, including significant increases in the time required to complete important tasks. CMS reported taking steps to address the challenges with each of these contractors’ performance.
• Demand and recovery issues. Challenges were identified related to the timing of demand amounts, the cost-effectiveness of recovery efforts, and the amounts of Medicare demands from liability settlements. CMS reported taking steps to address some, but not all, of these challenges.
• Mandatory reporting. Key challenges were identified with certain aspects of mandatory reporting: determining whether individuals are Medicare beneficiaries, supplying diagnostic codes related to individuals’ injuries, and reporting all liability settlement amounts. CMS reported taking steps to address some, but not all, of these challenges.
• CMS guidance and communication. Key challenges were identified related to CMS guidance and communication about the MSP process, guidance on Medicare set-aside arrangements, and beneficiary rights and responsibilities. CMS has taken few steps to address these challenges.
GAO did acknowledge that CMS was working on many of these issues, and in its conclusion made the following five recommendations with CMS in agreement:
- Review recovery thresholds to ensure cost-effectiveness of recovery efforts and not require Non-Group Health Plans to report on cases where CMS will have no recovery.
- Consider making the reporting of ICD-9 codes optional.
- Develop a centralized MSP website.
- Issue guidance regarding liability and no-fault Medicare Set-Aside arrangements.
- Review and revise correspondence with beneficiaries.
In a letter sent immediately to CMS acting administrator Ms. Marilyn Tavenner, Congressman Pete Stark (D-CA) urged CMS to “quickly take action to implement GAO’s recommendations” and to provide him “with an action plan for implementing these recommendations to further improve the MSP process by May 31, 2012.”