Medicare Reporting Update: Coding is King
Diagnostic codes can influence several major aspects of personal injury litigation, including liability carriers’ claims valuations, Medicare’s reimbursement demands, and Medicare’s willingness to cover future care.
These issues are of escalating importance, as we are seeing increasing signs of new Medicare procedures relating to injury claims. Medicare has massively increased their budget for contractors who process liability and reimbursement issues. U.S. Attorneys’ offices are actively investigating and charging plaintiff’s firms for failure to comply with the Medicare Secondary Payer Act.
CMS continues to roll out changes to the mandated reporting system under the Medicare and Medicaid SCHIP Extension Act of 2007 (MMSEA). This is the process by which carriers report claims and payments to CMS. CMS uses this data to process its secondary payer liens for conditional payments and for potential denial of future claims.Coding remains the driving factor in how carriers value personal injury claims. We strongly advocate that plaintiffs should determine the correct ICD-10 diagnostic codes for their claimed injuries, providing these to liability carriers in initial letters of representation, demand letters, discovery responses, etc., and use them in reporting to CMS.
However, when the case resolves, if incorrect or overbroad diagnostic codes are reported to Medicare, it may create significant problems for the plaintiff in the future. It is not unusual to assert an injury at the start of the claims process and later have to concede it is not causally related. It is important this change be reported to CMS by both plaintiff’s counsel and the liability carrier as part of a settlement process.
We often see liability carriers incorrectly include the same ICD-10 codes reported when the claim was opened in reporting the settlement/payment. The fallout to the CMS beneficiary who has to fight with CMS over the conditional payment lien and corresponding LMSA issues can be significant. A liability carrier that has a signed release would have no incentive to help clear up the problem they helped create, while the plaintiff/beneficiary looks to his/her counsel to help resolve the problem.
The issue is compounded by timing. When a case settles there is a real desire to get it paid, disbursed and closed without delay. A problem with CMS may not be apparent at the time a claim resolves. Importantly, claims input data is reported by carriers quarterly. By the time the data is processed and CMS generates a letter to the beneficiary and/or counsel that there is an issue, such as additional conditional payments added to the lien or a demand for reimbursement for ongoing care for which CMS claims it is secondary [ i.e. LMSA issues], more than six months may have passed. We have seen such letters generated several years after a plaintiff counsel has closed the file.
The most efficient way to avoid issues is to deal with them during the settlement and file closing process. This includes documenting the effort to fully inform and advise the client as to the CMS issues. The obligation is to act reasonably to protect CMS interest - past and future. Including the ICD10 codes for the injuries being paid as part of a recovery in the settlement documentation can be an important step in this process. However, this can be challenging if the liability carrier/defense counsel is not cooperative.
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