Treasury Recovery Claims – 5 Things to Know and How Verisk Can Help

May 28, 2025 / 7 min read

Under the Medicare Secondary Payer (MSP) statute and related regulations, the Centers for Medicare and Medicaid Services (CMS) has several different recourses for recovering conditional payments.^[1] For example, CMS has the right to seek recovery from the party who makes and receives payment,^[2]the ability to sue insurers for “double damages,”^[3]a direct right of recovery,^[4] and subrogation rights.^[5]

In addition to the above, another powerful tool is CMS’s ability to refer delinquent conditional payment debts to the United States Department of the Treasury (Treasury) for collection.^[6]Treasury collections account for a significant portion of Medicare’s overall conditional payment recovery. For example, in fiscal year 2024 (October 1, 2022, through September 30, 2023), the most recent year for which data is available, the Commercial Repayment Center (CRC) reported Treasury collections of $47.55 million, nearly 16% of the total amount collected by the CRC during that period.^[7]

As discussed below, Treasury actions can take several forms, and can often take insurers by surprise, so it is important to understand how Treasury claims arise, the Treasury recovery process, and how to mitigate the risk of Treasury activity. Towards that end, the author outlines five things to keep in mind regarding Treasury claims, and how Verisk can help, as follows:

1. Treasury actions relate to CMS’s conditional payment process (Medicare Parts A and B).

To start, it should be noted that Treasury actions only relate to CMS conditional payment recovery claims regarding Traditional Medicare (Medicare Part A and B claims).^[8]In general, as outlined in the author’s recent article, CMS handles conditional payment recovery regarding Part A and B claims, and they use two contractors as part of this process: the Benefits Coordination and Recovery Center (BCRC) and the Commercial Recovery Center (CRC).^[9] Importantly, it should be noted that the BCRC and the CRC only handle conditional payment recovery for Traditional Medicare, these contractors do not handle or have involvement with the Medicare Advantage Plans (Medicare Part C) or Medicare Prescription Drug Plans (Medicare Part D) recovery process. Rather, Part C and Part D recovery, which will be the subject of a forthcoming article, is handled by the issuing plan.^[10]

2. CMS can refer delinquent conditional payment debts to Treasury collection.

As part of CMS’s recovery process, Treasury claims arise when a CMS conditional payment demand is not timely paid or resolved and becomes delinquent.^[11]On this point, when CMS issues a conditional payment demand, CMS requests that the debtor issue payment within 60 days.^[12]If payment is not issued within the 60-day period, then CMS considers the debt to be delinquent.^[13] Under the Debt Collection Improvement Act of 1996, CMS is required to refer eligible debts which are more than 120 days delinquent to Treasury for collections.^[14]In addition, it is noted CMS can refer debt to Treasury prior to being 120 days delinquent if CMS has notified the debtor of its intention to refer the debt to Treasury.^[15]Also, and importantly, as part of CMS’s recovery practices it is noted that, per Medicare’s stated policy,^[16]a conditional payment debt will not be referred to Treasury if the debt is under active administrative appeal.^[17]

3. Treasury utilizes Private Collection Agencies (PCAs) to collect debts.

Treasury has several different paths to pursue collection on delinquent Medicare conditional payment demands, and it is important to understand that these paths are not mutually exclusive and can occur concurrently. Additionally, another point to note is that interest continues to accrue on the underlying debt while collections are occurring.^[18]One of the ways that Treasury seeks reimbursement is using Private Collection Agencies (PCAs). Upon CMS referral of a debt to Treasury, Treasury’s Cross Servicing division begins the collection process upon receipt of a delinquent Medicare conditional payment debt.^[19] From the author’s experience, the Bureau of the Fiscal Service will typically issue an initial demand letter notifying a debtor that a delinquent Medicare conditional payment debt has been referred to Treasury for collections and providing payment instructions. If the debt remains unpaid, Treasury may refer the debt to one of the following five private collection agencies (PCAs): The CBE Group, Conserve, Pioneer Credit Recovery, Coast Professional, and Transworld Systems.^[20] The assigned PCA will try to find and contact debtors by searching databases, making phone calls, and sending collection letters.^[21]

4. Treasury also uses the Treasury Offset Program (TOP) to collect debts.

In addition to using PCAs, Treasury also utilizes what is referred to as the Treasury Offset Program (TOP), operated by the Bureau of Fiscal Service.^[22]The TOP is described by Treasury as a “fully-automated, centralized offset program that intercepts federal and state payments to collect delinquent debts owed to federal and state agencies.”^[23] According to Treasury, TOP matches debtors (both individuals and businesses) with money that is being paid by a federal agency and, to the extent allowed by law, TOP offsets the money to satisfy the debt.^[24]This is done by matching the debtor’s Federal Employer Identification Number (FEIN) or Social Security Number (SSN) with the FEIN or SSN associated with a payment being made by Treasury.^[25]When insurers report claims under the required Medicare Section 111 Reporting process, the TIN Reference File includes a Responsible Reporting Entity’s (RRE’s) federal tax identification numbers (TINs), which CMS notes are used for coordination of benefits and recovery purposes.^[26] When a CMS conditional payment debt is referred to Treasury, these TINs may be used by Treasury to match potential payments for offset under TOP, making the TOP a powerful tool for Treasury to recover unresolved conditional payment debt.

5. Compliance strategies to avoid Treasury claims.

As outlined above, Treasury has powerful recovery tools and may present real challenges and potentially significant liability exposure for insurers. There are several steps that insurers may consider to significantly reduce potential Treasury claims. The first step is to build proactive compliance approaches to ensure Medicare conditional payment recovery is identified, reviewed, and resolved prior to a debt becoming eligible for referral to Treasury. This could involve the use of Medicare Secondary Payer Recovery Portal (“MSPRP”) Open Debt Reports, Section 111 data, Recovery Agents, or other means to proactively identify Medicare conditional payment recovery cases to ensure they are timely resolved. It is also crucial for insurers to understand CMS’s recovery process (outlined more fully here) and how the BCRC and CRC seek reimbursement. Finally, promptly resolving CMS demands – either via payment or the use of the CMS appeals process – will likely minimize the risk of CMS referring unresolved debts to Treasury for collection.

How Verisk Can Help

As part of our Medicare recovery services we can help you address Medicare Treasury claims. As part of our Treasury services, we offer ad hoc Treasury debt resolution for individual claims as well as programmatic Treasury monitoring. For debts where a Treasury offset has occurred, we offer our Recovery Reversal service, where our team will file a dispute with Medicare and seek to obtain reimbursement of any funds that were not owed. Of note, in 2024, we saved our customers nearly $1 million in Treasury savings.

In addition to Treasury claims, we have several different services to help you address CMS conditional payment claims more broadly, as well as Medicare Advantage and Part D recovery claims. We also offer our popular CP Link® program which provides a proactive approach to Medicare recovery claims that leverages your Section 111 data to initiate the conditional payment process. In general, CP Link helps speed up the conditional payment process by identifying potential conditional payment claims through Section 111 data, helps reduce adjuster time, and facilitates a holistic compliance approach to address conditional payment claims. Through our experienced team, we consistently deliver extraordinary savings for our customers. For example, in 2024, we saved our clients over $140 million in conditional payments.

[1] Under the MSP statute, the term “conditional payment” is defined as follows: “Definitions. In this subpart B and in subparts C through H of this part, unless the context indicates otherwise— Conditional payment means a Medicare payment for services for which another payer is responsible, made either on the bases set forth in subparts C through H of this part, or because the intermediary or carrier did not know that the other coverage existed.” 42 C.F.R. § 411.21. Also, CMS on its website defines “conditional payment” in general as follows: “A conditional payment is a payment Medicare makes for services another payer may be responsible for. The payment is ‘conditional’ because it must be repaid to Medicare when a beneficiary receives a settlement, judgment, award, or other payment from an NGHP. When the BCRC learns of an NGHP case, they will gather information about any related conditional payments Medicare made and request repayment.” https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview/Non-Group-Health-Plan-Recovery/Non-Group-Health-Plan-Recovery

[2] 42 U.S.C. § 1395y(b)(2)(ii).

[3] 42 U.S.C. § 1395y(b)(2)(iii).

[4] See e.g., 42 U.S.C. § 1395y(b)(2)(iii) and 42 CFR § 411.24 (e)

[5] 42 U.S.C. § 1395y(b)(2)(iv).

[6] See e.g., CMS website https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Beneficiary-Services/Medicares-Recovery-Process/Medicares-Recovery-Process

As part of the information contained on this page, CMS states as follows: “Referral of debt to the Department of Treasury. You will be notified of a delinquency through an Intent to Refer letter (a notice of the BCRC’s intent to refer the debt to the Department of Treasury Offset Program for further collection activities). The Intent to Refer letter is sent day 90 (after demand letter) if full payment or Valid Documented Defense is not received. If full repayment or Valid Documented Defense is not received within 60 days of Intent to Refer Letter (150 days of demand letter), debt is referred to Treasury once any outstanding correspondence is worked by the BCRC. Note: CMS may also refer debts to the Department of Justice for legal action if it determines that the required payment or a properly documented defense has not been provided. The law authorizes the Federal government to collect double damages from any party that is responsible for resolving the matter but which fails to do so.” Id. See also, Medicare Secondary Payer (MSP) Manual, Chapter 7, 70.2: “The DATA Act which amended the DCIA requires Federal agencies to refer eligible delinquent debt to a Treasury designated Debt Collection Center (DCC) for cross servicing and/or Treasury Offset Program (TOP). The CMS is mandated to refer all eligible delinquent debt, over 120 calendar days delinquent, to Treasury for cross-servicing.”

[7] Annual Report on the Medicare Secondary Payer (MSP) Commercial Repayment Center (CRC), Report to Congress, Fiscal Year 2023 (July 2024), Section 4.3. Of note, between direct collections and Treasury collections, the CRC collected $301.1 million during FY 23. It is important to point out that the CRC handles conditional payment recovery for group health plans (GHPs) as well as non-group health plans (NGHPs), where recovery is sought against the primary payer. Unfortunately, the Report to Congress does not contain a separate breakdown of statistics between GHP and NGHP recovery. Additionally, the author has not been able to locate any reports on recovery by the Benefits Coordination & Recovery Center (BCRC) where recovery is sought against claimant Medicare beneficiaries in NGHP claims.

[8] See n.1 regarding the definition of “conditional payment.” Regarding Medicare Part A and B, these are components of the Medicare program comprise what is known as “original Medicare” or “traditional Medicare.” Under Traditional Medicare, a beneficiary’s Medicare benefits are provided by the federal government as administered by the Centers for Medicare and Medicaid Services. Very generally, Part A provides “hospital insurance” and covers such items as inpatient care, skilled nursing facility care, hospice care, and home health care; while Part B provides “medical insurance” and helps covers such items as doctor services, outpatient care, home health care, durable medical equipment, and certain preventive services. See, Medicare & You 2023, The official U.S. government Medicare Handbook, Department of Health and Human Services, p. 9-11.

[9] For a general overview of CMS’s non-group health plan recovery process, see https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview/Non-Group-Health-Plan-Recovery/Non-Group-Health-Plan-Recovery

[10] https://www.cms.gov/medicare/coordination-benefits-recovery/overview/non-group-health-plan-recovery

[11] See, https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Beneficiary-Services/Medicares-Recovery-Process/Medicares-Recovery-Process

[12] https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/InsurerServices/Insurer-NGHP-Recovery#:~:text=Medicare%20recovers%20payments%20it%20made,Group%20Health%20Plans%20(NGHPs).

[13] MSP Manual, Chapter 7, Section 70.4.

[14] The Debt Collection Improvement Act of 1996 is codified at 31 U.S.C. 3701, et. seq.

[15] MSP Manual, Chapter 7, Section 70.2.

[16] See e.g., CMS’s recent report The Medicare Secondary Payer Commercial Repayment Center in Fiscal Year 2023 (July 2024) in which CMS states, in part, “[i]f an NGHP requests an appeal, the debt will not be referred to the Department of the Treasury while the appeal is being processed, but interest will continue to accrue.” Id. See also, MSP Manual, Chapter 7, Section 70.6 which states, in part: “Debts excluded from referral include: (a) Debts in appeal (pending at any level).”

[17] While a complete review of CMS’s administrative appeals process is beyond the scope of this article, in a recent CMS report, CMS describes the administrative appeals process as follows: “An identified NGHP debtor has 120 days from receipt of the Demand letter to file an appeal. Pursuant to section 1862(b)(2)(B)(viii) of the Act, NGHP entities from which the CRC recovers conditional payments were granted formal administrative appeal rights as of April 2015. The basis of the appeal may be the existence (the debtor did not actually have primary payment responsibility) or the amount (the specific responsibility for some or all the conditional payments) of the debt. The CRC processes the first-level appeal, called a request for redetermination. The identified debtor must provide documentation to support its request which, if successful, results in an adjustment of the debt. If the appeal is unsuccessful, the identified debtor may request a higher-level appeal. The higher levels of appeal are reconsideration by the CMS Qualified Independent Contractor, a hearing by an Administrative Law Judge within the Office of Medicare Hearings and Appeals, and review by the Departmental Appeals Board’s Medicare Appeals Council. If an NGHP requests an appeal, the debt will not be referred to the Department of the Treasury while the appeal is being processed, but interest will continue to accrue.” See, The Medicare Secondary Payer Commercial Repayment Center in Fiscal Year 2021 (October 2022) at p.7. Another CMS resource providing information on non-group health plan appeal rights can be viewed here. https://www.cms.gov/medicare/coordination-of-benefits-and-recovery/insurerservices/downloads/appeal-rights-for-applicable-plans.pdf

[18] 31 U.S. Code § 3717.

[19] 31 CFR § 285.12 (c) (5).

[20] https://www.fiscal.treasury.gov/cross-servicing/private-collection-agencies.html

[21] Id.

[22] https://fiscal.treasury.gov/top/

[23] See, https://fiscal.treasury.gov/files/top/TOP-rules-reqs-fact-sheet.pdf

[24] https://fiscal.treasury.gov/top/

[25] https://fiscal.treasury.gov/top/how-top-works.html

[26] CMS’s Section 111 NGHP User Guide (Version 8.1, May 5, 2025), Chapter IV: Technical Information, Table 3.1 NGHP Data File Types, page 10.