The statutes and regulations that govern Medicare have been referred to by courts as “the most completely impenetrable texts within human experience.” With the complex nature of Medicare compliance comes the resulting confusion. Don’t fall victim to these Medicare Secondary Payer (MSP) misconceptions:
Myth #1: I’m an insurance carrier so I don’t have to worry about conditional payments — it’s the claimant’s problem.
Fact: Medicare can recover its payments from “any entity, including a beneficiary, provider, supplier, physician, attorney, State agency, or private insurer…” See 42 CFR 411.24(g). As a matter of policy, following a settlement, the Benefits Coordination & Recovery Center (BCRC) will typically pursue the clamant in liability claims. Increasingly, as of late, the BCRC has engaged in recovery against the claimant in workers' compensation claims following Total Payment Obligation to Claimant (TPOC) events. Consistently, however, the BCRC still maintains direct recovery against primary payers in workers' compensation and no-fault claims. Moreover, regardless of insurance type, collection efforts by the U.S. Department of the Treasury can be directed toward either the claimant or the primary payer. Medicare can also bring direct suit against a primary payer, claimant, or claimant’s attorney. See U.S. v. Harris 2009 WL 891931 (D. N.D. W. Va., March 26, 2009) (suit against claimant’s attorney) as well as United States v. Stricker, 524 F. App’x 500 (11th Cir. 2013) (suit against the claimant attorneys and insurance carriers).
Myth #2: Section 111 has nothing to do with conditional payments.
Fact: Section 111 is inextricably linked to conditional payments. Reporting Ongoing Responsibility for Medicals (ORM) is a coordination of benefits function designed to prevent Medicare from making payment where an RRE has been identified as a primary payer. Total Payment Obligation to Claimant (TPOC) reporting alerts Medicare to instances where it may initiate recovery following a settlement, judgment, or award. The Centers for Medicare and Medicaid Services (CMS) 2013 Financial Report indicates that, “in those situations where past mistaken payments are identified as the result of the Section 111 data, the more comprehensive Section 111 data assists in more efficient recovery operations.”
Myth #3: You can’t contest a Medicare conditional payment letter or final demand.
Fact: A conditional payment can be contested by any authorized party — both pre- and post-demand. The Strengthening Medicare and Repaying Taxpayers Act of 2012 (the SMART Act) amended the MSP statute to establish a primary payer’s right of appeal of a final demand — much like those that already exist for beneficiaries and providers. The steps for the appeals process are described in our March blog post. Don’t wait for a demand before filing an appeal. There’s a tremendous opportunity to eliminate conditional payment exposure through the pre-demand dispute process. In my experience, upwards of 90 percent of conditional payment amounts can be eliminated through pre-demand disputes.
Myth #4: I’m handling a workers' compensation claim, but there’s also a third-party claim, so I don’t need to be concerned with conditional payments.
Fact: There could be multiple layers of Medicare exposure directed toward both the workers' compensation and automobile insurers — either correctly or incorrectly. When a single accident is subject to multiple claims and coverage types, Medicare will typically establish separate MSP recovery cases for each coverage type. Typically, by virtue of the Section 111 ORM report, any first-party claims (for example, no fault or workers' compensation) are first on Medicare’s radar. With liability insurance, Medicare may not be aware of the claim until a TPOC event occurs. Single incidents with multiple coverage types can be difficult to process with Medicare, but early BCRC case registration, conditional payment identification, and proper coordination among parties will go a long way toward an expedient and streamlined resolution.
Myth #5: I don’t need to be concerned about conditional payment exposure because the claimant told me that he didn’t use Medicare to treat for his claim.
Fact: The best practice is to “trust, but verify.” First, consider that it’s entirely possible that the beneficiary is mistaken. Just because a claimant thinks Medicare has made no payments, doesn’t mean a provider hasn’t unexpectedly been billing Medicare. Second, even if the claimant is correct, Medicare may be improperly assigning responsibility. Without identifying conditional payment information, there may be unexpected Medicare exposure that the parties didn’t anticipate. If verification occurs, then this exposure can be properly identified and mitigated.
For more information about these conditional payment myths and many others, please contact Shawn Deane, assistant vice president of product development, at firstname.lastname@example.org.