The Medicare Secondary Payer (MSP) provisions make Medicare a secondary payer to certain non-group health plans (NGHPs), which include workers’ compensation entities, liability insurers (including self-insured entities), and no-fault insurers. CMS has the right to recover Medicare payments made that should have been the responsibility of an NGHP or another payer.
MSP situations involving NGHPs are typically triggered by unexpected incidents, such as car accidents or work-related injuries involving Medicare beneficiaries, and result in medical expenses for which an NGHP has primary responsibility for payment, instead of Medicare. In these situations, Medicare becomes a secondary payer.
In some MSP situations involving NGHPs, Medicare will initially pay for related medical expenses in order to ensure that the beneficiary has timely access to needed care and later seek to recover those payments. These are known as “Conditional Payments.” 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.
Other common situations in a workers’ compensation claim that may result in conditional payments for a Medicare Beneficiary include (but are not limited to):
- Bills for services related to treatment for the industrial injuries are inadvertently sent to Medicare either by the treater or patient (Medicare beneficiary)
- Items and services are denied; the patient submits the bills to Medicare and the services or items are eventually accepted under the claim
- The patient goes to a provider for a service not related to the claim, but claim related issues are discussed or treated in the same visit and on the same record (more common with providers such as Kaiser)
The Benefits Coordination & Recovery Center (BCRC) is responsible for ensuring that Medicare gets repaid by the beneficiary for any conditional payments it makes related to a liability, no-fault, or workers’ compensation case for parts A and B claims. When the BCRC learns of an NGHP case, they will gather information about any related conditional payments Medicare made and request repayment.
Please note that recovery for parts C (Medicare Advantage Plan) and D (Optional Prescription Drug Plan) claims are the responsibility of the issuing plan and separate inquires may be required.
It is important to understand any outstanding conditional payment amounts prior to settlement, so that the exposure for those payments can be considered by the carrier when setting reserves for settlement funding. Otherwise, the Applicant/Beneficiary may receive an unexpected bill for any owed conditional payments post settlement.
To obtain a conditional payment information, interested parties may contact BCRC Customer Service Representatives Monday through Friday, from 8:00 a.m. to 8:00 p.m., Eastern Time, except holidays, at toll-free lines: 1-855-798-2627 (TTY/TDD: 1-855-797-2627 for the hearing and speech impaired).
Note that Medicare does not release information from a beneficiary’s records without appropriate authorization. If the beneficiary has an attorney or other representative, he or she must send the BCRC documentation that authorizes them to release information. The attorney or other representative will receive a copy of the RAR letter and other letters from the BCRC as long as he or she has submitted a Consent to Release form.
A Consent to Release (CTR) authorizes an individual or entity to receive certain information from the BCRC for a limited period of time. With that form on file, the attorney or other representative will also be sent a copy of the Conditional Payment Letter (CPL) and demand letter. If the attorney or other representative wants to enter into additional discussions with any of Medicare’s entities, a Proof of Representation document will also need to be submitted. A Proof of Representation (POR) authorizes an individual or entity (including an attorney) to act on your behalf. It is in the best interest of both sides to have the most accurate information available regarding the amount owed to the BCRC prior to settlement.Do you have questions about MSAs, how to value future medical care or posturing your cases for future medical settlement? Contact us for more information!
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Stay tuned for Part IV of our MSA Reporting Series – What Happens When A Claim Is Reported to CMS?
Note: The information contained herein was obtained from CMS and Medicare Secondary Payer resources and is not to be considered legal advice.
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