Risk Insider: Roy Franco

An Inside Look at CMS Developments

By: | June 27, 2014 • 2 min read

Roy Franco is chief legal officer of Franco Signor LLC, a leading Medicare secondary payer compliance services company. He oversees the company’s legislative advocacy program and is a founder of the Medicare Advocacy Recovery Coalition, the group responsible for the recent SMART legislation. He can be reached at [email protected]

The Centers for Medicare & Medicaid Services (CMS) is deliberate in the actions it takes. Updates take months, if not years, of back-and-forth within the agency. Political by nature, change takes time and are typically incremental, but always done to further CMS’ objectives — increase recovery of conditional payments and improve coordination of benefits. The following are observations of recent news and what it may lead to.

Coordination of Benefits & Recovery. Medicare Secondary Payer Recovery Contractor (MSPRC) and Coordination of Benefits Contractor (COBC) no longer exist. What operated as silos with information flowing in one direction between COBC’s Common Working File to the MSPRC Recovery Management Accounting System (ReMAS), now flows both ways. Consequently, Section 111 MMSEA data from Responsible Reporting Entities (RREs) are triggering Final Demands to Medicare beneficiaries. If not timely paid, CMS reduces Social Security benefits. Look next for reimbursement in claims involving Ongoing Responsibility for Medical (ORM) with no settlement, judgment or award.

Medicaid Reporting. CMS pays $500B to state Medicaid programs each year. Last December, a U.S. Budget agreement changed how Medicaid was to be reimbursed in personal injury settlements. The law requires 100 percent recovery to take effect on 10/1/2014, but extended to 10/1/2015. In the interim, States are encouraged to improve recovery laws. Rhode Island currently requires reporting, and others will follow with their own reporting rules for insurers and those that self-insure for losses.

Liability Medicare Set Asides. CMS submitted proposed regulations to the Office of Management & Budget for future medicals in liability settlements. No rules exist today, except for one CMS policy memorandum that is not helpful. Parties don’t know what reasonable steps to take to protect Medicare’s interest. Claimant’s future Medicare benefits are in jeopardy and with rules stalled since last October, parties are looking to courts to approve allocations. Are rules really necessary with Medicare deducting from social security benefits? Expect settlements to falter.

Office of Inspector General. There is little doubt that this CMS sister agency is responsible for Section 111 Penalty enforcement as OIG has included as part of its work plan for the past two years. OIG recently proposed regulations to enhance enforcement capabilities under the Civil Monetary Penalty regulations. Public comment is due 7/11/2014 and could it be a step toward Section 111 penalty enforcement. Next, watch for the publication on safe harbors required by SMART, and possible RAC Auditors.

WCMSA User Guide. Section 4.1.4 was added to the User Guide. CMS clarified how it would treat hearings on the merits. Generally, CMS respects allocations that result, but only if Medicare’s interests were adequately addressed. CMS reserved its right to set aside any settlement under 42 C.F.R. §411.46. Some have interpreted this change as an “alternative” to the WCMSA approval process. It is unlikely CMS has decreased its focus on the objective of improving coordination of benefits. Acquiescence to state boards on what is adequate to fund future losses is inconsistent. Primary plans should seek guidance from CMS first. Watch for further CMS clarification.

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]