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Medicare Set Aside News - GAO Reports Additional Steps Are Needed to Improve Non-Group Health Plans

The US General Accountability Office (GAO) Releases Their Report to Improve Program Effectiveness for Non-Group Health Plans (NGHP)

In early April, the GAO released their report of various efficiencies and inefficiencies of the MMSEA Section 111 NGHP programs. Some of the efficiencies include net savings of $100 million dollars per year. The "savings" are essentially claims denials and conditional payment recoveries attributed to liability insurance. GAO did not quantify the added costs of regulatory compliance on NGHP insurers, which may be the subject of future Congressional hearings. The GAO criticized CMS's implementation of mandatory reporting which included certain details about extended timeframes to resolve open cases by the Medicare Secondary Payer Recovery Contractor (MSPRC).

Additionally, the report indicates continued difficulty of NGHPs to secure information from claimants needed to determine Medicare status, identifying ICD-9 codes that match insurer payments, and obtaining CMS guidance.

Finally, the report points out that reporting small settlements are counter-productive, and suggests that reporting thresholds for settlements larger than $25,000 for Medicare Set Asides which would ease reporting burdens on NGHPs without forgoing significant recoveries. CMS is considering the use of permanent reporting thresholds, and it will be reviewing more data before reaching any decisions. We have advocated this settlement threshold for many years as a way to eliminate undue administrative burden and focus on the major claims.

GAO offered five recommendations to CMS for improved reporting and administration of the MMSEA Section 111 reporting and Medicare Set Aside programs.

  1. periodically review reporting thresholds,
  2. consider making the reporting of ICD-9 codes optional,
  3. improve the Section 111 website,
  4. provide more guidance on the use of Medicare set-aside arrangements, and
  5. improve correspondence with Medicare beneficiaries.

CMS's comments largely concurred with each of the recommendations except the second recommendation regarding ICD-9 codes.

Click here for the full report.

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