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Tag Archive for: GAO

The GAO Report on the MSP Program – A Closer Look at the Players

The March 2012 report from the U.S. Government Accountability Office (GAO) is packed with information, and provides a fascinating look at the Medicare Secondary Payer (MSP) program.   There are so many issues addressed in this GAO report that I thought I would address them in separate blogs.  In this blog, I will discuss the background of the report, how it came about and who the parties are.

MARC Coalition – Formed in 2008 to advocate improvements to the Medicare Secondary Payer (MSP) program on behalf of beneficiaries and affected companies, the Medicare Advocacy Recovery Coalition (MARC) is, without a doubt, the main driving force behind this GAO study.  They have worked tirelessly on Capital Hill to bring about reform of the MSP program.  Their main accomplishment has been to introduce H.R. 1063, the Strengthening Medicare and Repaying Taxpayers Act of 2011 (SMART ACT) and it’s Senate counterpart S. 1718.

Congressman Pete Stark (D-CA) – On August 10, 2010, Congressman Pete Stark, wrote a letter, in his capacity as Chairman of the Health Subcomittee of Ways and Means committee, to the GAO requesting that a study be done.  Congressman Stark’s letter was the catalyst that prompted this study.  The March 9, 2012 GAO report is specifically addressed to “The Honorable Fortney Pete Stark, Ranking Member, Committee on Health, Committee on Ways and Means, House of Representatives.

The GAO – The Government Accountability Office (GAO) is the audit, evaluation and investigation arm of Congress.  It exists to support Congress and to help improve the performance and accountability of the federal government for the American people.   The GAO examines the use of public funds, evaluates federal programs, and provides analysis and other assistance to Congress.

CMS – The Centers for Medicare and Medicaid Services (CMS) is a federal agency within the United States Department of Health and Human Services (HHS) that administers the Medicare program and works in partnership with state governments to administer Medicaid, the State Children’s Health Insurance Program (SCHIP), and health insurance portability standards.

So, this GAO study was in response to a letter from Congressman Pete Stark asking the GAO to examine CMS’s MSP program and processes.  Although the MARC coalition and H.R. 1063 was the primary driving force behind this, Medivest also played a significant role because of meetings it had with key Congressional representatives and staff.  In those meetings Medivest pointed out the practical necessity of apportionment in liability cases, the benefits of MSA review thresholds, and the benefits of professional administration.

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GAO Issues Report Recommending Improvements to the MSP Program

On April 3, 2012, the United States Government Accountability Office (GAO) issued a much-anticipated report examining the Medicare Secondary Payer (MSP) program entitled, “Medicare Secondary Payer: Additional Steps are Needed to Improve Program Effectiveness for Non-Group Health Plans”. The report was in response to a request from Congressman Pete Stark (D-CA), dated August 10, 2010, that the GAO “conduct a detailed examination of issues surrounding Medicare Secondary Payer rules as they apply to Non-Group Health Plans).

The 47-page report found that the Centers for Medicare and Medicaid Services (CMS) workloads increased dramatically during the recent implementation of mandatory insurer reporting. Key challenges were identified related to contractor performance, demand amounts, mandatory insurer reporting, CMS guidance and CMS communication. GAO acknowledged that CMS has addressed many of these issues and in conclusion GAO made the following five recommendations:

  1. 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.
  2. Consider making the reporting of ICD-9 codes optional.
  3. Develop a centralized MSP website.
  4. Issue guidance regarding liability and no-fault Medicare Set-Aside arrangements.
  5. 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”.

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Congressman Pete Stark Requests GAO Study into Medicare Secondary Payer Procedures

Last month, Congressman Pete Stark, Chairman of the Subcommittee on Health, Ways and Means Committee, sent a letter to the Government Accountability Office (GAO) formally requesting that the GAO conduct a study into the issues surrounding Medicare Secondary Payer rules as they pertain to non-group health plans.

In this letter Congressman Stark reaffirms Medicare’s role as a secondary payer when Medicare beneficiaries have received payment for medical care following a liability, no-fault, or workers’ compensation settlement.  This letter also brings attention to the difficulties the settling parties are encountering when trying to obtain information from the Centers for Medicare and Medicaid Services (CMS) such as conditional payments and approval of a proposed Medicare Set Aside Arrangement.

This letter references two pieces of legislation as the catalyst for this study and specifically asks the GAO to address these questions:

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?

An important thing to remember throughout all of this is that GAO studies have historically led to remarkable changes in the Medicare Set Aside (MSA) industry.  It is widely known that the last study the GAO conducted in the MSA arena led to the release of the “Patel Memo”, which announced that MSAs were now CMS’ preferred method of protecting Medicare’s interest in workers’ compensation cases.  While it may be presumptuous to assume another blockbuster change is on the horizon, Congressman Stark’s letter does give an indication that changes are being considered.

To view Congressman Stark’s letter, please click here.