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i65 for Advisors Tackles Medicare Maze

If one of the services you offer clients is to help them save for a comfortable retirement, make sure you cover one of the biggest retirement discomforts in retirement: the cost of health care.

Fidelity Benefits Consulting’s 2017 estimate for what a 65-year old couple, retiring in the current year, will need to cover health care and medical expenses throughout retirement is $275,000. That represents a 6% increase over 2016’s estimate of $260,000. As an indicator of how health care costs continue to climb, the estimate is up 70% since Fidelity issued its first retiree health care estimate in 2002.

So won’t Medicare cover the bulk of those costs? The answer is yes and no, but even the most financially and health-care savvy retiree faces a daunting task: understanding the Medicare system sufficiently to ensure they 1) optimize the benefits they’ll need in retirement and 2) avoid big mistakes in when and how they enroll in the government health insurance system.

That’s where i65 can provide an unbiased, expert solution for advisors and their clients.

The subsidiary of 65 Incorporated, which has been providing one-on-one Medicare advice on a fee-for-service basis since 2012, i65 was the brainchild of Diane Omdahl, a registered nurse who has been providing Medicare guidance since the mid-1980s. After selling her original business in 2008, she decided to help individuals directly, according to Melinda Caughill, 65 Incorporated’s co-founder and chief marketing officer. Omdahl was hoping to answer a common question posted by many retirees after they made mistakes in enrolling in Medicare and choosing its many options: “Why didn’t anybody tell me?”

Thus i65’s business model, said Caughill, is to “put Diane into a box, to provide Medicare enrollment advice” specifically to retirees through advisors.

The need is great: 3.6 million Americans turn 65 each year and enroll in Medicare, said Caughill, and surveys have shown more than half admit they don’t understand Medicare. The danger, she said, is that “one enrollment mistake can cost thousands of dollars, and keep them from getting needed medical care.”

When retirees decide they can’t or won’t do it on their own, turning to an advisor for help “will be one of their first stops,” Caughill suggested, and doing so through i65 “empowers you to become your clients’ Medicare enrollment hero.”

The software — white labeled for the advisory firm — walks an advisor and her client through the retirement health care maze through a series of questions on living preferences (Do you spend several months a year in Florida, though you’re a resident of New Jersey? Are you still working with health care coverage?). The software explores the six-step process of enrolling (including when to enroll) and evaluating the many options of Medicare parts A, B, C and D, including Medigap and other supplements, eventually creating an individual Medicare RoadMap for the client.

That PDF includes step-by-step Medicare enrollment instructions.

The one-year-old company is not affiliated with any insurance carriers. “We make NO MONEY from the sale of insurance products,” its website proudly proclaims. “As such, you’ll know our guidance is always in YOUR best interest.” To limit liability and remain unbiased, Caughill says “we have the client making the final decisions” on which specific plans to enroll in.

“We recommend; they decide. We steer clear of recommending specific insurance companies, especially for fiduciary advisors.”

The cost for the service? It’s a five-tier subscription model, explained Caughill, starting at $249 a year for the Solo tier, which allows for the creation of four different RoadMaps, up to $2,599 a year for the Elite tier, which allows for the creation of 60 RoadMaps. Free tech support is available at every level, as is Medicare Basics Training, marketing materials and an unlimited number of users. There are also modules that address different states’ specific Medicare regulations, notably New York, Connecticut and Massachusetts, which have “dramatically different” rules, Caughill said, on everything from Medicare Advantage premiums to the options for switching from one Medicare plan to another.

So far, i65 has enrolled slightly fewer than 60 advisors, all “fast-moving” RIAs who understand the value to clients. Those early adopters are realizing another benefit: more referrals from clients, since advisors using i65 can “literally show the thousands of dollars you can save clients” in the RoadMaps.

Caughill says her favorite feature of the software is the IRMAA Calculator, referring to the Medicare equation under which higher-income Medicare participants must pay higher premiums on their Part B medical providers and Part D drug coverage, but which are based on a subscriber’s two-year old adjusted gross income, which she points out could be misleading if someone has just entered retirement. Using the IRMAA Calculator, subscribers can request a review of the higher premiums from Medicare due to a “life-changing event,” such as retirement. Those reviews can result in lower premiums for Parts B and D, which Caughill said, “can save some people with higher income thousands of dollars. It’s low-hanging fruit.”


Providers Medicare Secondary Payments Responsibilities

Health care providers also have important responsibilities under the MSP law.  Small and mid-sized providers should be on special alert, as they may lack the same level of centralized data processing and availability of in-house counsel to keep them informed of Medicare enforcement trends and regulatory requirements. Healthcare providers have MSP responsibilities, although they are less onerous than those placed upon GHPs and NGHPs.  Generally, providers must implement certain procedures to determine each patient’s Medicare eligibility status and submit claims to the proper insurer for reimbursement.  These procedures include asking the patient his or her Medicare eligibility status, checking the Common Working File, and creating and maintaining an internal database that stores information on each patient’s insurance coverage.  When inquiring about a patient’s insurance coverage, providers are encouraged to use a CMS Questionnaire found on the CMS website.1 Providers must also submit an Explanation of Benefits (EOB) form with each claim to Medicare to ensure proper billing.2  Providers should inquire as to whether the reason the patient is being seen for treatment is prompted by an injury that would be covered by an NGHP provider, such as an automobile accident, fall, or injury in the workplace.

If a provider submits an improper claim to Medicare but receives a conditional payment, the provider must reimburse Medicare within 60 days of receiving the payment and will not be penalized if the provider maintains an internal database that stores information on each patient’s insurance coverage and the provider can show that the claim was submitted as a result of false information provided by the beneficiary or someone acting on the beneficiary’s behalf.3  However, if a provider does not reimburse a conditional payment within the timeframe mandated in a Medicare demand letter, it can face civil monetary penalties, such as paying interest on any outstanding payment and being assessed double damages.4

These rules are summarized below:

Acting Party Responsibilities Liabilities for Non-Compliance

· Investigate each patient’s Medicare eligibility by asking the beneficiary his/her Medicare status and by checking the Common Working File to verify each patient’s Medicare status

· Maintain a database that includes each patient’s insurance coverage

· Properly bill Medicare

· Include all relevant MSP information or Explanation of Benefits with Medicare claims

· Reimburse Medicare in 60 days if improperly billed

·Must pay interest on reimbursement if paid 60 days after issuance of demand letter

· Possible FCA liability if the claims to Medicare were false or fraudulent

This is part 5 of 7 in the Medicare Secondary Payer Compliance series. Subscribe to our blog for future updates. Part 4 can be accessed here: Medicare Secondary Payer Compliance: Non-Group Health Plans (NGHPs) (Part IV)

Medicare Secondary Payer Compliance: Group Health Plans (Part III)

Medicare Secondary Payer Compliance: Conditional Payments (Part II)

Medicare Secondary Payer Compliance: An Introduction (Part I)


2. Medicare Secondary Payer Manual, Ch. 3 § 30.5.B.

3. 42 CFR § 489.20.

4. 42 CFR § 489.24.

Andrew Kuder contributed significantly to the preparation of this post.


Medicare may cover psychotherapy



The following item ran in “Kokua Line” on Jan. 17

Question: My mother is a widow. She’s pretty isolated, with no social life to speak of except for visits from me (I have no siblings).

She doesn’t belong to a church and has never been a “joiner.”

I think she is depressed, although there are some activities she enjoys, like walking.

I think she would benefit from some sort of group therapy, where she is with other people. But every time I bring it up she says “Medicare won’t cover that.”

Is that true?

Answer: A: Not necessarily. Original Medicare (which consists of Part A and Part B) doesn’t pay for support groups that bring people together to socialize, but it does cover group psychotherapy, according to “Medicare & Your Mental Health Benefits,” a booklet published by the Centers for Medicare and Medicaid Services, which oversees the U.S. health insurance for people over 65.

The latter may be an option for your mother if she is diagnosed with depression or some other illness for which group psychotherapy is beneficial.

You can read the full booklet at .

You mentioned that your mom is not inclined to join clubs, but that she does enjoy walking.

Exercise can be therapeutic — physically and mentally! Perhaps you could walk with her, or encourage her to invite a neighbor or a friend to walk too. Such outings may lead her to eventually consider joining an organized activity for senior citizens, of which there are many.

Write to Kokua Line at Honolulu Star-Advertiser, 7 Waterfront Plaza, Suite 210, 500 Ala Moana Blvd., Honolulu 96813; call 529-4773; or email

Justice Department faces uphill battle in Medicare Advantage false billing cases

The U.S. Justice Department recently has been dealt heavy blows in its quest to recover millions in allegedly fraudulent Medicare Advantage payments to UnitedHealth Group. But the federal courts have laid out a road map, albeit a demanding one, for how the federal government could win future cases.

The federal government on Friday ditched most of its False Claims Act lawsuit over Minnetonka, Minn.-based UnitedHealth Group’s Medicare Advantage billing practices. That setback came just a few months after UnitedHealth defeated the Justice Department in a similar lawsuit accusing the nation’s largest insurer and affiliated health plans of exaggerating how sick its patients were to score millions of dollars in inflated Medicare Advantage payments. UnitedHealth has vigorously denied those accusations.

In a brief notice to a federal court in Los Angeles, the Justice Department said it wouldn’t update its lawsuit to revive claims over UnitedHealth’s statements about the accuracy of its Medicare Advantage billing data. Instead, the federal government will only litigate whether the data used to secure more than $1 billion in Medicare Advantage payments was invalid.

U.S. District Judge Michael Fitzgerald had thrown out some of the lawsuit’s claims in February, determining that the Justice Department did not prove that statements UnitedHealth made about the data’s accuracy would have affected whether the government paid the Medicare Advantage claims or not. That was a standard set by the U.S. Supreme Court in 2016 when it limited False Claims Act liability.

Law experts say that’s a demanding test. The Justice Department, which is investigating the medical upcoding practices of several other large health insurers, will have to find another way to win back the potentially billions in allegedly fraudulent payments from Medicare Advantage insurers.

“Fighting alleged fraud in Medicare Advantage context has been hard for the government. It’s a complex system and it’s harder to draw a straight line between alleged falsehood or inaccuracy and the decision of Medicare to pay,” said William Horton, partner at the law firm Jones Walker. It’s unclear if the Justice Department’s latest setbacks will deter it from pursuing similar cases against other Advantage insurers, he said.

At the same time, the court has now laid out a roadmap for what it would expect to see in a future complaint, Horton said.

The Justice Department’s partial loss also could limit the amount of damages it can claim in False Claims Act cases, according to Ben Waldin, an associate at law firm Eimer Stahl. In previous cases, the Justice Department has tried to recoup all payments made by the government on the basis of an insurer’s false assurance of compliance with regulations.

But now, “the judge here essentially adopted a view of the case law saying the DOJ is limited to going after just those claims that were false, rather than all claims made under the attestation,” Waldin explained.

Waldin said the government has the option to appeal the dismissal of some of the claims. It’s likely, he said, that in the future the government will avoid pursuing cases against Medicare Advantage insurers on the basis of their statements about the accuracy of their billing data.

“I wouldn’t be too surprised if the DOJ tries to move the case law away from this,” he said.

The Justice Department has opened several investigations into the upcoding practices in the Medicare Advantage program. UnitedHealth, Aetna, Health Net, Humana and Cigna’s Bravo Health are all under federal scrutiny for potential upcoding issues.

Payment rates in Medicare Advantage are based on regional trends and utilization in traditional fee-for-service Medicare as well as adjustments to plan members’ risk scores. The government pays private health plans monthly amounts for every member they cover, and those taxpayer-funded payments are adjusted based on how sick someone is. Members with more chronic conditions have higher risk scores, and plans that cover them receive higher payments.

Risk scores were created to incentivize plans to cover all seniors regardless of their health status, but there have been several whistle-blower lawsuits in recent years that allege health plans have been inflating the scores to collect more funds.

The UnitedHealth whistle-blower lawsuit at issue, which the feds joined in February 2017 but was initially brought in 2011, alleged that the insurer inflated its plan members’ risk scores since at least 2005 in order to boost payments under Medicare Advantage’s risk-adjustment program.

The lawsuit claimed UnitedHealth collected payments from false claims that it treated patients for conditions they didn’t have, for more severe conditions than they had, conditions that had already been treated, or diagnoses that didn’t meet the requirements for risk adjustment.


Medicare Watch List: Staying ahead of the Medicare Secondary Payer compliance curve

As another new year settles in, we know at least one thing is certain: Medicare Secondary Payer (MSP) compliance will continue to present formidable challenges for claims payers. With each passing year, MSP issues seem to grow in both number and complexity—and 2018 promises to be no different.

To help prepare for another year of Medicare fun, the following provides a quick MSP level set and key items to watch in 2018:

SSNRI/MBI Initiative

Starting this April, the Centers for Medicare and Medicaid Services (CMS) will begin replacing all Medicare cards with a new unique 11-byte Medicare Beneficiary Identifier (MBI) number. This is all part of CMS’ Social Security Number Removal Initiative (SSNRI) as mandated under the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. This law requires CMS to discontinue all SSN-based Medicare identifiers and to reissue all Medicare cards with a new MBI by April 2019.

MACRA contains a special MSP exemption that provides claims payers with flexibility in dealing with CMS on MSP matters. Specifically, claims payers will still be permitted to use a claimant’s Health Insurance Claim Number (HICN) or SSN (in addition to using the new MBI) in connection with standard MSP practices, such as Section 111 reporting, conditional payments, Medicare Set-Asides, and using CMS’ various MSP portals.

Section 111 Reporting

It is unknown if 2018 will finally be the year CMS revisits the issues of Section 111 penalties and good-faith safe harbors. In December 2013, CMS sought public comment on what circumstances and factors should be considered in establishing Section 111 penalties and compliance “safe harbors” when a Responsible Reporting Entity (RRE) is unable to determine a claimant’s Medicare status despite “good faith” efforts to do so. However, to date, CMS has not taken any further action on these issues.

On another front, CMS recently released an updated Section 111 Non-Group Health Plan (NGHP) User Guide (Version 5.3, December 15, 2017). This latest edition provides reporting updates involving CMS’ SSNRI/MBI initiative, ORM termination, ICD-10 exclusions, matters related to the retiree drug subsidy (RDS), and contact protocol for Section 111 data escalation.

Conditional Payments

All eyes are closely watching what will unfold regarding CMS’ recent award of the Commercial Repayment Center (CRC) contract to Performant Financial Corporation (Performant). Performant assumed responsibilities from previous contractor, , CGI Federal, on February 12, 2018.

The CRC is the contractor that CMS uses to process conditional payment recoveries for Non-Group Health Plan (NGHP) claims where the claims payer is the debtor. Under this process, CMS uses the CRC contractor to pursue recovery against claims payers when the payer has assumed ongoing responsibility for medicals (ORM) prior to claim settlement. This process typically impacts workers’ compensation, no-fault, and med-pay claims as these claims often involve ORM.

CMS and Performant held a Town Hall call in January to discuss pertinent transition items. Performant advises that its goal is for a seamless, smooth, and efficient transition. Toward these objectives, Performant plans to reach out to industry stakeholders and vowed to be available to stakeholders during its tenure as the CRC.

Other key items discussed on the call included:

  1. Performant will maintain the same recovery processes that CGI Federal has been using (i.e. seeking recovery against payers in ORM situations).
  2. All current case information will be transitioned from CGI to Performant.
  3. Performant will have access to completed case histories, copies of communications, correspondence and contact information, including authorizations.
  4. All recovery processes, including established timeframes, will remain the same

As Performant takes over, the industry will need to closely monitor what changes (if any) the new contractor makes to the CRC recovery process, and evaluate any differences from the industry’s interaction with CGI Federal over the past few years.

Workers’ Compensation Medicare Set-Asides (WCMSAs)

New days are coming for WCMSAs with CMS’ award of the Workers’ Compensation Review Contract (WCRC) to Capitol Bridge, LLC, in July 2017. The WCRC is responsible for reviewing and approving WCMSA submissions. Capitol Bridge will replace the current contractor, Provider Resources, Inc. (PRI). Capitol Bridge took a step closer toward full transition as CMS’ new WCRC in mid-December, when the Government Accountability Office (GAO) denied the bid protests filed by two contractors that challenged CMS’ award.

As with previous contractor changes, it remains to be seen how the WCMSA review process will change once Capitol Bridge assumes the full WCRC reins, including what impact this may have on WCMSA determination turnaround times, which had greatly improved under PRI. How the new contractor will handle re-review requests and other challenges is also another important area to watch—especially in relation to CMS’ new Amended Review process, which provides parties with unprecedented opportunity to seek re-review of prior CMS approvals in certain situations.

Liability Medicare Set-Asides (LMSAs)

Where CMS plans to head next regarding LMSAs is another item to watch in 2018. Back in June 2016, CMS announced intentions to revisit MSAs for liability cases and indicated that it planned to hold a series of Town Hall calls to address the matter. In 2017, there were some indications that CMS was preparing internally for possible expansion of its MSA process. For example, one of the qualifying criteria for the WCRC included the contractor having the ability to handle MSAs for liability and no-fault claims in the event CMS elected to expand its process. CMS also issued certain internal change requests prepping its contractors on potential LMSAs and No-Fault Medicare Set-Asides (NFMSAs).

Despite these “behind the scenes” signs, to date, CMS has not set any Town Hall calls or issued any additional information, memoranda, guidance, and so forth to the industry regarding what it may be contemplating for LMSAs (and potentially NFMSAs). A key point to watch is exactly how CMS plans to do this. That is, will CMS use the formal rulemaking process to establish legal regulations in the Code of Federal Regulations (as they attempted in 2012–2014), or will it simply expand its MSA process through informal agency policy memoranda, and guidance?

Medicare Advantage Plans (MAPs)

What 2018 has in store regarding Medicare Advantage Plans (MAPs) is another area that warrants attention. MAPs continue to grow in popularity—with 19 million individuals (roughly 33% of total Medicare beneficiaries nationally) now covered under a private MAP.

At the claims level, the ongoing legal battle regarding the nature and extent of MAP lien rights continues. The big question here is whether MAPs enjoy private cause of action rights permitting them to seek double-damages against claims payers (and other parties) under 42 USC 1395y(b)(3)(A). Over the past few years, several federal courts have ruled that this statute does in fact apply to MAPs, thereby giving them double-damages rights. These jurisdictions include the Third Circuit (Delaware, New Jersey, Pennsylvania, and the U.S. Virgin Islands) and Eleventh Circuit (Alabama, Florida, and Georgia); as well as the Western District of Louisiana, the Eastern District of Texas, the Eastern District of Tennessee, and the Eastern District of Virginia.

In 2017, this growing list of double-damages jurisdictions held steady. However, the industry needs to stay vigilant in 2018 to see if other jurisdictions weigh in on the MAP/private cause of action issue. On this note, there are two cases pending in the Central District of California that may ultimately address this issue.

Medicare Part D (Rx Plans)

Another emerging compliance issue quietly inching up the charts involves Medicare Part D recovery. Part D is Medicare’s voluntary outpatient prescription drug benefit. Beneficiaries enrolled in traditional Medicare can purchase what is known as a “stand-alone” Part D plan, while MAP beneficiaries may purchase a plan as part of their coverage under their particular MAP program.

Initially, these plans were simply sending letters to claims payers asking them to confirm primary payer status, injury date, claimed injuries, and other claim-related information. However, over the past year or so, Part D providers have started to send letters asserting recovery rights and providing a breakdown of alleged payments for reimbursement. Similar to MAPs, the exact nature and extent of Part D lien rights may ultimately need to be fleshed out by the courts. In the meantime, claims payers should note this growing area and be prepared to address potential Part D recovery issues and claims.

ISO Claims Partners will be monitoring all these areas in 2018 and provide updates as warranted. Please do not hesitate to contact the author if you have any questions about MSP compliance trends.

This article is the feature of an in-depth Medicare trends report. To access the full report Medicare Today: Understand Upcoming Changes and the Impact on Claims click here.

Mark Popolizio is the Vice President of MSP Compliance and Policy for ISO Claims Partners. Mark’s area of specialty is Medicare secondary payer compliance. He authors regular articles and provides educational presentations across the country on MSP issues. Mark’s e-mail address is

Tagged with:ISO Claims Partners, Centers for Medicare and Medicaid Services (CMS), Medicare ID, Section 111, Conditional Payment, Commercial Repayment Center (CRC), Workers’ Compensation Medicare Set-Aside (WCMSA), Workers’ Compensation Review Contractor (WCRC), Amended Review, Liability Medicare Set-Aside (LMSA), Medicare Advantage Plans (MAPS), Medicare Part D


Medicare Isn’t Free: Why It Costs So Much

Medicare isn’t free.

“For the Medicare program to be viable in the future we’re going to need to think about ways to provide additional support for people at the lower end of the income scale. Medicare does not for the most part do that now.”

“We’ve got to provide some relief for people at the lower end of the income scale. Otherwise, what we’ll be doing is driving more and more seniors into poverty, which is the situation we were in before Medicare was enacted. And I don’t think we should be going backward on the progress that we’ve made over the last 50 years.”

Those comments came from Professor Gerald Kominski, Director of the UCLA Center for Health Policy Research, talking about the out-of-pocket costs for a senior on Medicare. The situation is far worse than most people think.

To many Americans the Medicare program provides government health care for free. Indeed, this perception fuels the frequent left-wing talking point about replacing the language of “single payer” with “Medicare for all.” And, while this may or may not be sound policy, it is not our current reality. For people on it, Medicare can actually be very expensive.

In January the Kaiser Family Foundation released a study on the out-of-pocket expenses that seniors on Medicare face. The findings were daunting.

According to Kaiser’s data, in 2013, Medicare enrollees spent approximately 41% of a Social Security income on out of pocket health care expenses. Foundation researchers expect that number to rise past 50% by 2030, at which point health care expenses will consume most of a Social Security retiree’s assets.

Medicare out-of-pocket costs vary. Parts A, B, D and C can require an enrollee to pay either premiums, deductibles or both, depending on their specific plan. Further, the program rarely pays for long term, which many seniors come to rely on as they grow older.

This latter issue alone often pushes retirees into poverty, as they exhaust their savings paying for needed services care such as nursing home stays or in-home health care aids.

Medicaid does provide supplemental coverage for seniors who can show sufficient need, but to reach that point a patient has to have spent all of their money and sold off any major assets. They have to have almost nothing left.

Many seniors receive Medicaid coverage, including more than two out of every five receiving long-term care.

“They are not necessarily intended to work together because they target different populations,” said Kominski. “Having said that, about 10 percent of Medicare beneficiaries qualify for Medicaid because their income is low enough.”

“But you have to become medically impoverished. You have to pass what’s known as the asset test, and you have to spend all of your saving. If you’re single or widowed, you have to sell your home… So they started off as middle class with savings and a home, but all of that money’s gone and now they qualify for Medicaid.”

Millions of Americans depend on Social Security to secure their retirements. According to the Social Security Administration, 23% of married couples and 43% of unmarried persons depend on it for all or almost all of their income. Yet this problem goes far beyond Social Security-reliant seniors. Kaiser found that costs have become a major financial reality for all retirees, with more than half of those surveyed spending at least 14% of their total income on health care costs. Nationwide, the average plan enrollee spends almost $11,000 per year on health care.

And while for many seniors these costs may not present a problem, they are not the population that the Medicare statute was written for. This program exists to help seniors who could not otherwise afford care, the ones who either cannot find or cannot afford the private insurance that their wealthier counterparts often rely on. For these people, the program’s out-of-pocket costs have become an increasing burden on a relatively small amount of disposable income.

“There is tremendous disparity among seniors in their ability to pay for additional medical expenses above and beyond what’s already covered by Medicare,” Kominski said. “Half of Medicare beneficiaries have incomes below $26,000… but five percent have incomes above 100,000. So it really depends on where you are on that income scale.”

“With 50 percent of seniors below $26,000 of annual income, medical expenses can take a pretty big bite out of that.”

The problem is compounded, he said, by the degree to which many Americans have struggled to save for retirement. One in five seniors, Kominski said, has less than $15,000 in the bank. One in 12 has no savings at all.

Medicare covers approximately 59 million people nationwide. They’re spending a lot more than most Americans realize.