Auto Accidents, Medicare Beneficiaries, and the Two C’s — Compliance and Claims
By Carrie Barr and Shawn Deane
Evaluating automobile bodily injury claims—whether from young or old, healthy or infirmed-can be a daunting task. But those difficulties often multiply when addressing a claim involving a Medicare beneficiary. Likewise, Medicare beneficiaries can present added challenges in compliance, too. Far from being insoluble problems, however, the two C’s present a largely untapped opportunity to leverage data and analytics as a tiller to successfully steer claims decision making, evaluation, and settlements.
According to the federal organization Centers for Disease Control and Prevention (CDC), the chance of being injured in an automobile collision increases among older adults.i In 2012, more than 214,000 adults 65 years of age and older were injured in motor vehicle traffic collisions.ii Injuries reportedly occur with greater frequency and are often more severe due to age-related vulnerabilities. Indeed, medical conditions such as heart disease, diabetes, and other age-related comorbidities can make it more difficult for Medicare-eligible drivers to recover from accident-related injuries.iii
Other than age, the most common route to Medicare entitlement is through Social Security disability insurance enrollment after a 24-month qualifying period.iv
Therefore, there may be a need for increased scrutiny on claims involving injuries sustained by a Medicare beneficiary in a motor vehicle collision. Analytics tools can be a key to triaging and identifying potentially volatile claims at the outset.
Taking the Pain out of Auto Bodily Injury Claims
Predictive analytics have come a long way in recent years, and many claims departments are using predictive models for tasks such as prioritizing claim assignments. Assigning claims to an adjuster with an experience level commensurate with the severity of the Medicare beneficiary’s injuries can be challenging. Relying on screeners who may not be skilled at identifying these potentially volatile claims—or using traditional business rules to assign claims—can result in missed opportunities to identify high-severity claims early in the process. Those missed opportunities can drastically affect claim values.
Analytics tools can further help focus a claims department by supporting adjusters’ decision making and using objective data to identify potentially severe claims that may warrant more in-depth oversight. Rather than having adjusters primarily rely on human investigation to identify potentially severe claims, harnessing data and analytics can act as a reliable backstop. This may help prevent high-severity claims from slipping through the cracks until it becomes too late to mitigate costs proactively. It also potentially conserves precious resources by allowing the claims department to focus time and energy on high-severity claims.
Optimizing outcomes for automobile liability bodily injury claims relies heavily on reaching a liability decision that closely reflects the final cost of the claim. This is an area where a large number of adjusters may struggle and can result in overpayment and lost subrogation opportunities. Specific to automobile claims, tools that provide access to applicable state law, rules of the road, images from crash scenes, and diagrams can be invaluable in assisting the claims handler in determining an appropriate assignment of liability.
Predictive analytics tools can help control costs and provide consistency in settlements by reviewing, in part, vast amounts of data relative to the settlement histories of similarly situated claims. Effective tools can further support the settlement process by flagging anomalies or uncommon and difficult-to-detect claims characteristics. Historical insurer claims data and/or industrywide benchmarking statistics can assist in calculating a potential range of settlement values appropriate for a particular claim.
Considerations such as the age of the claimant, Medicare status, attorney representation, length of time the claim has been open, and potential severity of injuries are some of the components that can factor into settlement calculation. Predictive analytics help provide insights by examining a much wider array of similarly situated claims, which can promote consistency and savings.
The experience and knowledge of adjusters may remain at the core of claims handling, but predictive analytics tools can benefit the adjuster at every step of the claims process (Figure 1).
FIGURE 1 – Impact Areas of Predictive Analytics in Automobile Bodily Injury Claims
Predictive analytics may be especially beneficial in automobile bodily injury claims with Medicare beneficiaries because certain attributes make such claims more complex (including but not limited to the age of claimant, Medicare status, attorney representation, high propensity for litigation, and higher potential for severe injuries).
In those circumstances, predictive analytics can offer objective decision support, unprecedented insight, and greater visibility that result in faster triaging and assignment, efficient resource allocation, better liability determinations, and more consistent settlements.
It’s Complicated: How to Get Compliance Right
Subject to specific federal statutory provisions, Medicare has a right to recover payments it makes on behalf of Medicare beneficiaries when another insurer assumes responsibility under the Medicare Secondary Payer (MSP) Act.v
This would typically be applicable in bodily injury claims (including no-fault, liability, and workers' compensation). Medicare conditional payment compliance is complicated, and this complication is compounded when multiple coverages are implicated in the same loss. An adjuster typically faces this situation when a Medicare beneficiary is involved in an automobile bodily injury claim. To add to the existing difficulties, there are now separate Medicare recovery contractors that oversee recovery for each layer of coverage.vi
If both liability and no-fault coverages are implicated in an automobile bodily injury claim with a Medicare beneficiary, the first steps to conditional payment compliance include ensuring that the respective contractors are properly notified and that conditional payment information is requested, obtained, and analyzed from each contractor: the Benefits Coordination & Recovery Center (BCRC) for the liability claim and the Commercial Repayment Center (CRC) for the no-fault claim.
Typically, when ongoing responsibility to pay for medicals is assumed by an insurer, the no-fault coverage is first in line to be recovered against after evaluating the specific laws and regulations of a particular jurisdiction. In most instances with no-fault claims, Medicare will be put on notice by Ongoing Responsibility for Medicals (ORM) reporting pursuant to federal reporting requirements.vii
In instances of overlapping liability and no-fault coverage, Medicare will likely establish a recovery case against the no-fault claim before the liability claim. The CRC process attempts to establish a recovery claim following the federal reporting of assumption of ORM and transmit a Conditional Payment Notification (CPN) to the insurer.
FIGURE 2 – Medicare Conditional Payments with Concurrent Coverages
As depicted in Figure 2 (above), the Medicare conditional payment process is elaborate and complex. Due to the many moving components, different scenarios can arise that may require different approaches in claims handling. For instance, a liability claim settles before no-fault coverage is exhausted, and there are no conditional payments that have accrued on the BCRC’s liability MSP recovery case. No matter what the procedural scenario is, however, once conditional payment information is obtained for both coverage case types, a detailed analysis of contended Medicare charges should be completed. Where applicable, one should evaluate initiating a dispute with the respective contractor to mitigate MSP exposure and reduce costs. All efforts should be made to resolve, reimburse (when applicable), and close recovery claims with the respective contractor.
Compliance: Remember the Basics
The following best practices should be considered when implementing a process to ensure that appropriate steps are taken with respect to Medicare conditional payment compliance (in automobile BI claims where no-fault and liability insurance coverages are implicated):
- Don’t forget the basics: recovery claims with multiple contractors can become confusing, but don’t neglect to identify, analyze, mitigate/dispute, and reimburse/resolve conditional payments.
- If there’s available no-fault coverage with a Medicare beneficiary, take proactive steps to ascertain information about conditional payments.
- With an overlapping liability claim, ensure the no-fault MSP recovery case is established sooner rather than later.
- If there are two MSP recovery claims (one for no-fault and one for liability) and conditional payment claims have accrued against the liability claim only, consider evaluating if both claims can be transferred to the no-fault claim, depending on the potential exposure and procedural posture.
- Communicate and coordinate with the pro se claimant or the attorney and insurers for both no-fault and liability coverages.
- Evaluate all applicable law, including ensuring prompt Section 111 reporting for no-fault claims; the act of reporting ORM will trigger the conditional payment process with the CRC.
- Ensure that any liability settlement agreement also contains clear provisions for responsibilities surrounding conditional payment issues.
- Treat instances of concurrent coverage and MSP recovery claims case by case—weighing all factors, facts, and circumstances, including potential risk and exposure.
- Consult with an expert if the proper course of action is in question for resolving conditional payment issues.
Medicare conditional payment compliance in automobile bodily injury claims with multiple concurrent coverages is often challenging and burdensome. Yet risk and exposure can be greatly reduced or even eliminated through more accurate identification, analysis, and mitigation. To ensure proper coordination, pay close attention to the procedural posture of each recovery case with the applicable contactor relative to its respective insurance type.
When navigating the two C’s of claims and compliance for Medicare beneficiaries, analytics can be a highly useful instrument, not unlike a mariner’s sextant. When handled with a clear eye and steady hand, the results can often help point a route away from greater perils and toward safer shores.
v See 42 U.S.C. 1395y(b)(2)(B)(ii). This responsibility can be generally evidenced by a settlement, judgment, award, or other payment. In no-fault and first-party claims this responsibility can also be evidenced by the insurer’s assumption of ongoing responsibility of medicals.
vi As of October 5, 2015, the Commercial Repayment Center (CRC) administers recovery in no-fault and workers' compensation claims, while the Benefits Coordination & Recovery Center (BCRC) oversees recovery in liability claims.
vii https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Mandatory-Insurer-Reporting-For-Non-Group-Health-Plans/Overview.html. “Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) added mandatory reporting requirements with respect to Medicare beneficiaries who have coverage under group health plan (GHP) arrangements as well as for Medicare beneficiaries who receive settlements, judgments, awards or other payment from liability insurance (including self-insurance), no-fault insurance, or workers' compensation, collectively referred to as non-group health plan (NGHP) or NGHP insurance.”