Are there limitations on the recovery of conditional Medicare payments?
When making a conditional payment, CMS has a right of subrogation from any individual or entity, including a beneficiary, physician or attorney. Additionally, CMS has a direct right of recovery against any entity responsible for making primary payment for services received by the Medicare recipient/beneficiary.
The law states that CMS cannot recover payment for particular services unless it has filed a claim for recovery by ‘the end of the year following the year in which … [it] has notice that the insurer is a primary plan to Medicare for those services.’ By comparison, the U.S. Code creates a three-year period beginning on the date on which the item or service was furnished, within which CMS may seek to recover conditional payments if, within that time frame, it has submitted a request for payment to the primary payer. So, there appears to be some discord within the federal statutes concerning when a claim must be made by CMS to recover conditional Medicare payments
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How will CMS present its claims for reimbursement?
In 2006, the government selected Chickasaw Nation Industries Inc. as the national Medicare Secondary Payer Recovery Contractor (MSPRC). When Medicare learns of the identity of an entity that may be the primary payer on a claim, MSPRC will send a ‘Pre-Demand Letter’ indicating that Medicare may have made a conditional payment in error to the recipient and asserting its lien on future payments or settlements.
The primary payer is required to check its records to determine if it is the proper primary payer and reimburse Medicare accordingly. Otherwise, the MSPRC may send a demand letter advising the specific amount of money due. The primary payer may dispute the claim, but Medicare will decide if the rebuttal is a valid, documented defense. A primary payer can also submit payment pending a decision to stop the running of statutory interest. The downside is waiting for a refund from Medicare should it later decide in favor of the payer.
What are the current deadlines for reporting?
The mandatory requirements for MMSEA are a moving target. The July 1, 2009, reporting deadline was pushed to Sept. 30, 2009, since the onerous nature of the new mandates was not fully appreciated by Congress. The burden is on the responsible reporting entity (RRE) to determine the Medicare status of its claimants and report only those claims or settlements where the injured party is entitled to (although not necessarily enrolled in) Medicare. Although the requirement itself is simple, the implementation is not as easy as CMS envisioned.
The deadline for testing of the reported information has been delayed until March 31, 2010, and the first live reporting is now scheduled for sometime during the second quarter of 2010, despite the July 1, 2009, effective date. As the MSP seeks to shift the Medicare burden onto the private sector, the federal government appears to have little appreciation for the complexity of the insurance market and the impact of this recovery program.
Employers can stay current with CMS policy regarding its MSP program by visiting www.cms.hhs.gov/Manuals/IOM and www.cms.hhs.gov/MandatoryInsRep/Downloads/ NGHPUserGuide2ndRev082009.pdf.
Mark E. Morley is senior partner and co-chair of the Executive Committee at Secrest Wardle. Reach him at (248) 539-2840 or [email protected].