Once again insurers and self-insured employers have been hit with a substantial amount of new paperwork from the Centers for Medicare & Medicaid Services (CMS). Medicare conditional payment claims can arise at many points in the life of previously dormant claims and over the last several weeks we have begun to see a significant influx in new conditional payment notices (CPNs) from Medicare’s contractor. By following a few simple tips, insurers and self-insured employers can get on top of this problem and halt the rolling recovery wave before it becomes a tsunami.
How did we get here?
In 2015, The Centers for Medicare and Medicaid Services (CMS) amended the way they handle conditional payments under the Medicare Secondary Payer (MSP) Statute on no-fault and workers’ compensation cases. Rather than wait for a settlement before initiating the recovery process, CMS began enforcing its right to collect money from insurers on a rolling basis whenever the insurer had ongoing responsibility to pay for a claimant’s medical treatment. Rolling recovery was born.
This change was particularly problematic impact in states that do not traditionally close medical benefits such as Massachusetts, Texas, and New Hampshire to name a few. In these states, MSP compliance was rarely considered beyond mandatory insurer reporting. Since parties do not typically resolve medical claims via settlement in these states, claims payers and counsel were simply not prepared to deal with conditional payment recovery issues.
Under the MSP, CMS may not make payments for treatment or services when another party should be held responsible for payment. CMS has the authority, however, to pay conditionally for treatment or services when the primary payer cannot or will not make a primary payment. CMS makes these payments as a matter of public policy to avoid further damage from occurring for the beneficiary. Once Medicare makes a payment, however, it is entitle to recover its payment in full from the responsible primary payer.
Prior to 2015, CMS had not collected conditional payments in Massachusetts workers’ compensation because on most cases, settlement would never occur. CMS focused their attention in states that close out future medicals via settlement such as California, New York or Pennsylvania because they could issue a final demand for conditional payments at the time of settlement, closing the matter on its entirety. States such as Massachusetts were left with a ticking time bomb in the form of millions of dollars in outstanding conditional payments.
Medicare will now recover on a rolling basis. All open workers’ compensation and no fault claims involving Medicare beneficiaries are subject to potential demands for conditional payment recovery. Moreover, Medicare is not limited to recovering just one time. Medicare’s contractor can recover multiple times on the same claim until the insurer or employer is no longer responsible to pay for a claimant’s medical treatment. Rolling recovery greatly expands the number of cases subject to recovery, as well as the timeline for recovery on those cases.
How can the insurer address rolling recovery and protect its interests?
Proper compliance begins with proper §111 reporting. It is more important than ever to have accurate diagnosis codes on claims. Insurers should be aggressive in their §111 reporting to ensure that they only pay for what is their responsibility. Furthermore, procedures should be put into place regarding CPNs. When a CPN is received, the insurer should:
- Review the claim within 24 hours of receipt of the CPN,
- Research the payments made by reviewing the CPN, and
- Dispute any charges that are not the responsibility of the insurer.
CPNs have increased in volume throughout 2019. If nothing is addressed within 30 days, CMS issues demands for repayment of conditional payments, and failure to repay CMS at that time could result in interests and penalties being assessed. The best defense with conditional payments is often a good offense. So, remain proactive in identifying the issue, update your §111 timely, and ensure prompt and aggressive response to conditional payment demands.
ExamWorks Clinical Solutions offers a full suite of services to assist parties in addressing conditional payments and we will continue to monitor the situation and will provide updated guidance if and as required. If you need help with any aspect of Medicare conditional payments please contact our Director of Conditional Payment Services, Lou Porrazzo, Esq.