conditional payment process -...
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CONDITIONAL PAYMENT PROCESS
P.O. Box 915619 • Longwood, FL 32791-5619 • P 866.858.7161 • F 407.389.0299 • mynuquest.com
PART I: OVERVIEW - MEDICARE’S CONDITIONAL PAYMENTS
Conditional Payment Overview
Medicare is a secondary payer when • “Payment has been made or can reasonably be expected to be made” by a primary plan
Exception to this occurs when • Payment is not reasonably expected to be made
“promptly” or within 120 days of receipt of the claim by the primary payer
If Medicare makes payment in this situation, the payment is a “conditional payment” which must be reimbursed to the Medicare Trust Fund.
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Conditional Payment Overview
A primary payer’s reimbursement obligation to Medicare may be demonstrated by: • A judgment
• A payment conditioned upon the recipient’s compromise,
waiver or release ( whether or not there is a determination of liability) of payment
• By other means (Section 1862 (b)(2) of the Social Security Act)
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Conditional Payment Overview
Under Section 1395 y(b)(2), Medicare may also recover the conditional payments from: • A beneficiary • A provider • A supplier • A physician • An attorney • A state agency • A private insurer that has received a primary payment
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Conditional Payment Overview
• Beneficiary must notify the Benefits Coordination and Recovery Center (BCRC) of a pending liability, no-fault or workers’ compensation claim
• A primary plan may have separate Section 111 Mandatory Reporting obligations in the claim
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Conditional Payment Overview
• Beneficiary is sent a Rights and Responsibilities letter from BCRC followed by a Conditional Payment Letter (CPL) and final demand letter • Interest accrues 60 days from the date of the demand letter • In general, when there is a Total Payment Obligation to the
Claimant (TPOC), Medicare pursues recovery from the beneficiary
• Beneficiary always provided with a multi-level appeal process for the resolution of any conditional payment disputes ( 42 CFR Section 405.904)
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Conditional Payment Overview
• On April 28, 2015, “Applicable Plans” (liability, self-insurance, no-fault and workers’ compensation plans) were given an identical multi-level appeal process when conditional payment recovery actions are directed against the plans
• Where the primary payer has ongoing responsibility for medicals (ORM), Medicare generally pursues recovery from the primary payer
• There may be a combination of recovery actions: – One related to the ORM from the primary payer – Recovery from the beneficiary’s Total Payment Obligation to the
Claimant
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PART III: CONDITIONAL PAYMENT PROCESS -IMPACT OF RECENT CHANGES
Impact of Changes
• Medicare conditional payment recovery process for beneficiary remains same: – Begins with a notification of an accidental injury claim to the Benefits
Coordination and Recovery Center (BCRC) – After the MSP occurrence is noted to the beneficiary’s file, BCRC will
issue a Rights and Responsibilities (RAR) letter
– The RAR explains the conditional payment recovery process
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Impact of Changes
– When Medicare is pursuing recovery directly from the insurer, beneficiary is sent a copy of the conditional payment recovery letters sent to the insurer or Applicable Plan
– Medicare identifies conditional payments related to the case and will send a Conditional Payment Letter (CPL) and Payment Summary Form (PSF) to the beneficiary.
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Beneficiary Conditional Payment Letter from BCRC
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Impact of Changes
• On October 5, 2015, CMS transitioned a portion of its Non-Group Health Plan recovery work to its Commercial Repayment Center (CRC)
• The transition only included cases where CMS is pursuing recovery from the liability insurer, no-fault insurer or WC entity directly
• The Benefits and Coordination & Recovery Contractor (BCRC) would continue to pursue recovery from the beneficiary.
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Impact of Changes
• The CRC will issue a Conditional Payment Notice (CPN) to the Applicable Plan when it has reported Ongoing Responsibility for Medicals (ORM) or otherwise notified CMS of its primary payment responsibilities
– When ORM is reported under Section 111, Medicare
should not be presented with bills or make conditional payments.
• If Medicare does make a conditional payment, the CRC will
issue a Conditional Payment Notice ( CPNs), when not disputed, will trigger demand letters.
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Impact of Changes
• Conditional Payment Letters do not trigger demand letters
• Section 2.2 of the April 4, 2016 WCMSA Reference Guide discusses the new process. It states: – Once the BCRC receives the information regarding a new
WC occurrence by phone or mail and applies the information to the beneficiary’s Medicare record,
– BCRC then sends the information to the Commercial Repayment Center (CRC) for processing.
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Impact of Changes
• CRC will then issue a Conditional Payment Letter ( CPL) or Conditional Payment Notice (CPN) to the insurer,
• copied to the beneficiary,
• explaining Medicare’s recovery rights with respect to conditional payments and
• outlining the next steps
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Insurer Conditional Payment Letter from CRC
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Insurer Conditional Payment Letter from CRC
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Initial Determination letter to insurer / formerly known as “demand letter”
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Initial Determination letter to insurer / formerly known as “demand letter”
Impact of Changes/ Best Practices
• Review correspondence carefully to see if recovery contractor is CRC or BCRC.
• Note the identified debtor.
• Make note of the nature of the correspondence. Is it a CPL, CPN or initial determination? There are no formal appeal rights before the initial determination is issued.
• Identify the due date for the response.
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Impact of Changes
• Review the conditional payment information in regards to ICD9 and ICD 10 codes- are they part of your claim?
• If unrelated codes are mixed with accepted codes, review medical records to see if any treatment was actually provided for the accepted codes on the service date.
• Respond in a timely way to CPN. Failure to respond to correspondence, prior to the initial determination/demand issued to a plan as the identified debtor, locks you in as the identified debtor.
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Impact of Changes
• Determine if there is a Statute of Limitations Argument that may be made?
• After July, 2013, the conditional payment recovery action must occur “no later than three years after the date of receipt of notice of a settlement, judgment, award, or other payment made….” Check the date of service.
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Impact of Changes
• Watch for multiple CPNs when there is a reported Ongoing Responsibility for Medical (ORM).
• The resolution of one CPN will not affect the subsequent CPNs that may be issued in the claim.
• Be alert for the CPN that is issued after the Total Payment Obligation to Claimant (TPOC) is reported.
• Watch for duplicate conditional payment cases being opened by the BCRC and the CRC.
• Clearly outline the parties’ responsibilities for reimbursing/negotiating the conditional payments in the settlement terms.
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Impact of Changes
• Respond to an “initial determination” letter in a timely way. • Only the applicable plan is a party to the appeal. • Beneficiary receives notice of the appeal but does not
participate. • Issues not subject to appeal include:
– CMS decision regarding the entity to pursue for recovery; i.e. who is the identified debtor.
• Waiver of recovery provisions available to a beneficiary do not apply to MSP claims where the applicable plan is the identified debtor
• No pro-rata reduction for attorneys fees/costs when the demands are issued to the applicable plans
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Impact of Changes
• If initial determination issued, consider appeal with proper proof of representation. – Deadline generally 120 days from receipt of demand
– Demand is presumed to be received within 5 days of the
date on the demand
• May appeal existence of the debt and the amount of the debt.
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P.O. Box 915619 • Longwood, FL 32791-5619 • P 866.858.7161 • F 407.389.0299 • mynuquest.com
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