The Centers for Medicare and Medicaid Services (CMS) has released two new reports providing data regarding its Commercial Repayment Center (CRC) recovery program and workers’ compensation Medicare set-aside (WCMSA) process. One report provides combined statistics related to CRC recovery for group-health plans (GHP) and CRC’s non-group health plan (NGHP) on-going responsibility for medicals (ORM) recovery program (NGHP-ORM). The other report provides data on several aspects of CMS’s workers’ compensation Medicare set-aside (WCMSA) review process.
As more fully outlined below, these reports provide interesting information on several fronts. For example, the data reflects, in part, that CRC net collections increased by 10%, there has been a 47% increase in Treasury collections, and that CMS returned $246.44M to the Medicare Trust Fund in FY 2021 (up from $220.10M in FY 2020). The WCMSA report shows, in part, that there have been decreases in certain WCMSA categories over the past two years, such as the total recommended WCMSA amount and total number of WCMSA submission.
CMS’s reports are outlined in general below, along with the authors’ observations and how Verisk can help you address Medicare recovery claims and reduce WCMSAs, as follows:
Commercial Repayment Center recovery – Fiscal Year 2021
CMS has released a report titled The Medicare Secondary Payer Commercial Repayment Center in Fiscal Year 2021 (October 2022). This report provides information regarding CRC collection activities from October 1, 2020 through September 30, 2021. CMS notes this is its annual report to Congress as required by Section 1893(h) of the Social Security Act of Fiscal Year 2021.1 As noted above, this report contains figures and statistics regarding CRC’s recovery activities regarding group health plans (GHPs)2 and in relation to CRC’s ORM recovery process for non-group health plans (liability insurance, no-fault insurance, or workers’ compensation plans).3 Unfortunately, the report does not contain a separate breakdown between the statistics related to CRC’s GHP recovery versus CRC’s NGHP-ORM related activities.
The following provides examples of the data reported by CMS:
- CRC net collections increased by 10% in FY 2021 over FY 2020; decreased demand volume, but increased demand amount
CRC nominal net collections increased by 10% in FY 2021 compared to FY 2020. While demand volume decreased by 9%, demand amounts increased by 10% in FY 2021.4
- CRC identified $1.04 billion in potential mistaken and conditional payments in FY 2021 ($539.87M validated)
In FY 2021, the CRC identified a total of $500 million in mistaken and conditional payments for both the GHP and NGHP ORM workload.5 The report further reflects that CRC issued 75,167 demand letter packages relating to 79,842 individual beneficiaries, representing $1.04 billion in potential mistaken and conditional payments made by the Medicare program during FY 2021.6 In response to these demand letters, the CRC received information that validated $539.87 million as correctly identified mistaken and conditional payments to be recovered.7
- CRC’s net collections totaled $286.83M in FY 2021
CMS’s report further reflects that the CRC’s net collections totaled $286.83 million in FY 2021.8 This amount includes mistaken and conditional payments identified through the end of FY 2021.9 CMS notes that collection efforts will continue into FY 2022 for mistaken payments identified in FY 2021.10 A total of $245.45 million of these payments were direct payments (checks received from debtors).11
- CRC processed $82.48M in Treasury collections in FY2021
During FY 2021, the CRC processed $82.48 million in collections made by the Department of the Treasury on delinquent debts. In addition, $41.10 million in excess collections were identified and refunded to the identified debtors.12 CMS noted that excess collections may occur when the debtor fails to respond in a timely manner.13
- CRC returned $246.44M to the Medicare Trust Fund in FY 2021 (up from $220.10M in FY 2020):
CMS reports that in FY 2021, the CRC identified a total of $500 million in mistaken and conditional payments for both the GHP and NGHP ORM workload.14 The CRC processed collections of $327.93 million on behalf of the Medicare program.15 Considering refunded excess collections of $41.10 million, the CRC posted $286.83 million in net collections.16
After accounting for agency administrative costs of $40.39 million, including contingency fees paid to the CRC, CMS returned $246.44 million dollars to the Medicare Trust Funds as a direct result of this program, compared to the return of $220.10 million for FY 2020.17
CMS expressed these figures mathematically as follows:
Figure 1: Amount Returned to the Medicare Trust Funds from the MSP Commercial Repayment Center in FY 202118
Direct Collections: $245,446.369.70
+ Treasury Collections: $82,480,909.71
(-) Excess Collections: $41,098,185.94
(-) CMS Admin. Costs: $40,392,300.63
Amt. Returned to Medicare $246,436,792.84
(CMS notes that CMS Administrative Costs include contingency fees paid to the CRC as well as certain CMS administrative costs and funds paid to support contractors to facilitate CRC work).
Comments: CMS typically releases conditional payment recovery program data on an annual basis and the reports follow a similar format as reflected in this current report. In reviewing the above findings, it is notable that, when comparing FY2020 to the recent FY2021 numbers, Treasury collections jumped from $55 million in 2020 to $82 million in 2021, a 47% increase.19 While CMS does not provide reasons for this significant increase in Treasury activity, it can likely be tied back to the CRC’s stricter adherence to the 120-day deadline to appeal conditional payment demands. On another front, it is also interesting that the CRC identified over $1.04 billion in potential conditional payments but validated only $539.87 million. This continues to be a significant delta year over year. While it’s unclear if the difference is attributed to issues with the CRC’s grouper algorithm or the accuracy of an RRE’s reported Section 111 data, this appears to be an area where there is an opportunity to improve processes to close the gap in the future.
Workers’ Compensation Medicare Set-Aside (WCMSA) Fiscal Year Statistics 2020-2022
CMS also issued a one-page report titled Workers’ Compensation Medicare Set-Aside (WCMSA) Fiscal Year Statistics: 2020-22 providing information on various aspects of WCMSA process.
In reviewing the data provided in this report, CMS reveals some interesting, but limited, year over year data points. By way of example, CMS reports that the total WCRC recommended WCMSA amount in FY 2022 was approximately $1.12M, which is down from approximately $1.19M in FY 2021. The report also reflects that the difference between the total submitted and proposed amount versus the CMS recommended WCMSA amount was 14% in FY 2022. Further, the data reflects, what appears to be, the total number of WCMSAs approved by CMS in FY 2022 was 13,752, down from 14,816 in FY 2021. The reported findings also reflect that the recommended medical amount in FY 2022 was $836,056,957.09 while the recommended RX amount was $285,717,812.91.
Comments: While it is always interesting when CMS shares data related to its MSP programs, the WCMSA data contained in this new report does not provide any significant insights into CMS’s process and relevant trending. For example, as noted above, the WCMSA fiscal year statistics appears to show a steady drop in the number of approved WCMSAs since 2020 – which seems significant, but without knowing the total number of WCMSA submissions during the same time, it is impossible to determine whether the decrease is caused by fewer WCMSA submissions, by an increase in the frequency which the Workers’ Compensation Review Center (WCRC) is developing cases, a combination of both, or perhaps other factors. Thus, while the presented data is interesting, unfortunately, determining the basis and reasoning for the changes and trending from these raw figures cannot be extrapolated.
How we can help
On many levels, the data released by CMS reflects that the agency continues to actively pursue its Medicare secondary payer rights. For insurers, having proactive MSP compliance approaches is critical to staying compliant, reducing costs, and getting claims settled.
Verisk can help you improve your outcomes with our holistic products and services which combine innovation, experience, and advocacy to deliver results.
Conditional Payments – we can help you reduce recovery claims!
We offer several service options to help meet your compliance needs. Our CP Link® our programmatic solution that automates CMS conditional payment identification, dispute, and resolution directly from Section 111 data for holistic compliance. With our new CP Link® PAID Act add-on component, insurers can now also use CP Link for a programmatic approach to Medicare Advantage (MAP) and prescription drug (Part D) recovery claims. We also offer our standard Medicare conditional payment, Medicare Advantage Resolution service and Treasury Claims services.
These services have consistently provided significant cost savings for our clients. For example, in 2021, we saved our clients approximately $100 million in conditional payment disputes and reduced 60% of conditional payment dispute submissions to zero dollars. Our CP Link solution saved our clients over $14 million in 2020 and approximately $12.6 million in 2021. Finally, we can also help build practical claims protocols to address each of the Medicare compliance areas noted above and provide training for management and staff
WCMSAs – our cost-mitigation services can help reduce MSA amounts!
On the WCMSA front, we have been an industry leader for over a decade in helping clients reduce WCMSA costs through an array of different services. These services, combined with our advocacy driven approach, have delivered results to help our customers save money and settle cases year after year. In 2021, we delivered over $158M in proactive WCSMA cost-mitigation; over $5M in CMS rebuttal savings; and over $13M in Amended Review savings. To learn more about our cost-mitigation options – including our new (and popular) Provider Outreach program – see our Verisk WCMSA Cost Mitigation Solutions.
MSP Navigator – getting Section 111 reporting right!
While Section 111 reporting was not addressed in CMS’s releases, keep in mind that CMS’s final Section 111 civil money penalties are currently being reviewed for release. Now is the time to make sure you are prepared to avoid Section 111’s “up to a $1,000 per day, per claim” penalty. Our MSP Navigator® reporting tool an industry leading solution that provides insurers with error free reporting through several different innovative and user-friendly features, including Smart prompts, customizable automated notifications of missing or invalid data, and management reports and dashboards to oversee and ensure full compliance.
Of course, please feel free to contact the authors if you have any questions regarding the above information or would like to set-up a call to discuss how our services can help you stay compliant and reduce costs!
- The Medicare Secondary Payer Commercial Repayment Center in Fiscal Year 2021 (October 2022), title page.
- The Medicare Secondary Payer Commercial Repayment Center in Fiscal Year 2021 (October 2022), Section 3.1, p.5-6.
- The Medicare Secondary Payer Commercial Repayment Center in Fiscal Year 2021 (October 2022), Section 3.2, p.6-7; and Section 2.1, p. 4. By way of background, the CRC assumed handling of GHP recovery cases from the MSPRC in May 2013. CMS then expanded CRC’s activities into the NGHP arena in FY 2016 to help identify and recover Medicare conditional payments when an NGHP applicable plan has, or had, ORM. The CRC coordinates with the Benefits Coordination and Recovery Center (BCRC) to review and new and updates NGHP records to identify conditional payments made by Medicare. As part of this process, the CRC identifies conditional payments where NGHP plan has ORM, the CRC initiates recovery. See, The Medicare Secondary Payer Commercial Repayment Center in Fiscal Year 2021 (October 2022), Section 2.1 , p. 4-5.
- The Medicare Secondary Payer Commercial Repayment Center in Fiscal Year 2021 (October 2022), Section 4.1, p.7.
- The Medicare Secondary Payer Commercial Repayment Center in Fiscal Year 2021 (October 2022), Section 4.2, p.7.
- The Medicare Secondary Payer Commercial Repayment Center in Fiscal Year 2021 (October 2022), Section 4.3, p.8.
- The Medicare Secondary Payer Commercial Repayment Center in Fiscal Year 2021 (October 2022), Section 4.1, p.7.
- The Medicare Secondary Payer Commercial Repayment Center in Fiscal Year 2021 (October 2022), Section 4.3, p.8
- The 2020 figure is taken from CMS’s “Report to Congress Medicare Secondary Payer Commercial Repayment Center in Fiscal Year 2020,” p. 8.