On May 17, the Centers for Medicare and Medicaid Services (CMS) released its final rule on the SMART Act’s interim conditional payment process through the Federal Register, and insurers will want to become familiar with how this will affect them. Under the SMART Act, CMS is required to provide the opportunity for parties to obtain a final conditional payment amount concurrent with workers' compensation or liability claim settlements. The final rule goes into effect June 16, 2016.
CMS released its interim final rule on the expedited conditional payment process in September 2013 and sought public comment. In response to comments received, CMS adjusted the regulation in the final rule but left the rule largely unchanged. In summary, 42 CFR 411.39 will allow parties to obtain a conditional payment amount concurrent with settlement if they do the following (once a conditional payment case is established in the conditional payment web portal):
Within 120 days of a possible settlement date, the claimant or authorized applicable plan should notify CMS of the intention to settle.
- Within that 120-day period, the claimant or authorized applicable plan should use the conditional payment web portal to obtain a final conditional payment amount.
- If the expedited process is used, individual claims may be disputed “once and only once” using the web portal.
- After the final conditional payment amount is obtained, the amount is valid for “three calendar days.”
There are a few subtle differences from the interim final rule published nearly three years ago, including the following changes:
- A clarification states that “an individual conditional payment amount, or a line item, on a payment summary form, may be disputed once and only once” if the expedited conditional payment process is used. CMS further explains that “an individual or entity may submit disputes more than once, but never for the same conditional payment or line item.” Presumably, if the amount changes, the concerned party is free to dispute new charges.
- CMS removed an awkward “refresh” requirement from the final rule.
- CMS modified the final rule so that a final conditional payment amount “may be requested at any time after a recovery case has been posted on the Web portal. Additionally, there is no requirement that 120 days must elapse before a final conditional payment amount may be requested.”
The most profound change is that CMS has effectively eliminated applicable plans from the expedited conditional payment program—absent a signed proof of representation from the individual Medicare beneficiary. In a new section, 42 CFR 411.39(c)(2), CMS states:
“An applicable plan may only obtain a final conditional payment amount related to a pending liability insurance (including self-insurance), no-fault insurance, or workers’ compensation settlement, judgment, award, or other payment…if the applicable plan has properly registered to use the Web portal and has obtained from the beneficiary, and submitted to the appropriate CMS contractor, proper proof of representation. The applicable plan may obtain read-only access if the applicable plan obtains from the beneficiary, and submits to the appropriate CMS contractor, proper consent to release.”
This is not a substantial change operationally, as CMS has modified recovery processes to differentiate between pre-settlement recovery [performed by the Commercial Repayment Center (CRC) in workers' compensation and no fault cases] and post-settlement recovery [performed by the Benefits Coordination and Recovery Contractor (BCRC) following liability and workers' compensation settlements]. This language is new in the final rule, however, and codifies CMS’s preference that a beneficiary be listed as the identified debtor whenever a pending settlement exists, regardless of insurance type.
For several years, CMS used the insurance type to guide recovery. In liability cases, the preference has always been to name the beneficiary as the debtor. In workers' compensation cases, CMS has shifted to a model based on the case status. If the claim is open and unresolved, the debtor is the insurer or primary payer. Once settlement occurs, the beneficiary becomes the debtor.
What does this mean for insurers? The best way to resolve conditional payments remains to address conditional payments proactively as soon as a claimant is identified as a Medicare beneficiary. In the case of ISO Claims Partners, we work with clients to develop conditional payment protocols that quickly identify conditional payment amounts, mitigate risk, and achieve resolution. Our CP Link program manages those risks with minimal intrusion into an adjuster’s day-to-day claims handling—while often eliminating inaccurate, unnecessary, and erroneous conditional payment demands.