By Guest Author Rasa Fumagalli, J.D., MSCC, CMSP-F – Director of MSP Compliance Services
The conditional payment recovery process in a workers’ compensation claim is not always smooth. Although the workers’ compensation insurance carrier will generally resolve any conditional payments in an accepted claim, the injured employee and counsel may find themselves in receipt of a post settlement conditional payment notice or demand that identifies the injured employee as owing reimbursement to Medicare. This article will provide an overview of the conditional payment recovery process and identify ways to help you better navigate this process.
The obligation to address conditional payments stems from the Medicare Secondary Payer Act. It prohibits Medicare from making payment when “payment has been made or can reasonably be expected to be made under a workmen’s compensation law or plan of the United States or a State or under an automobile or liability insurance policy or plan (including a self-insured plan) or under no fault insurance.” (42 U.S.C.§1395 y(b)2(a)). The exception to this occurs when payment is not reasonably expected to be made “promptly.” In that situation, Medicare can make payment on the condition that the payment is reimbursed to the appropriate Medicare Trust Fund when the beneficiary receives a settlement, judgment, award, or other payment from a primary plan.
There are two separate conditional payment recovery contractors involved in a workers’ compensation case: Commercial Repayment Center (CRC) and the Benefits Coordination & Recovery Center (BCRC). The CRC is involved in recovery when the debtor is the workers’ compensation plan, while the BCRC is involved when the debtor is the Medicare beneficiary. Both the CRC and the BCRC are only involved in conditional payment recovery when the injured employee is enrolled in the traditional “fee for service” Medicare Parts A and B plans. When an injured employee is enrolled in a Medicare Advantage Plan (Part C) or Prescription Drug Plan (Part D), conditional payment information must be secured from the plan; it will not be provided by the CRC or the BCRC. Since Medicare Part C and D Plans also use the MSP Act as their recovery vehicle, these reimbursement claims should not be overlooked. Part C plans have become very aggressive in their recovery efforts and are successfully using the double damages provision of the Medicare Secondary Payer Act to pursue law firms so it is very important to address these claims as well as conditional payments.
The conditional payment process in a workers’ compensation claim involving a Medicare beneficiary generally begins with the workers’ compensation carrier’s Section 111 mandatory insurer reporting. If the case is accepted, the carrier’s Responsible Reporting Entity (RRE) will report an Ongoing Responsibility for Medical (ORM) for the accepted diagnosis codes to Medicare. This report will result in the CRC initiating a conditional payment search to look for payments made in connection with the reported injuries. If the CRC identifies conditional payments, it will seek recovery from the workers’ compensation plan as the debtor. When the claim settles, the RRE must also make a Section 111 Total Payment Obligation to Claimant (TPOC) report to Medicare. It is important to note that the Section 111 reporting is separate and distinct from the beneficiary’s obligation to report a pending workers’ compensation claim to the BCRC.
Once the TPOC report is made, the conditional payment debt is then transferred to the Medicare beneficiary. This moves the recovery claim from the CRC to the BCRC. This transfer occurs even though the case was accepted by the workers’ compensation carrier. The carrier however will not be able to address any outstanding conditional payments identified by the BCRC without having properly executed authorizations from the beneficiary. The beneficiary’s attorney will also need properly executed authorizations to access conditional payment information from the BCRC.
Conditional payment issues may arise during the transfer of the debt from the CRC to the BCRC. Since the CRC may have an internal policy whereby, they do not pursue recovery in debts below a certain dollar amount, the CRC may issue a close out letter to the workers’ compensation carrier. This close out however does not mean that the BCRC will not pursue the remaining balance. The practitioner can avoid the surprise of an open BCRC claim by checking the web-based Medicare Secondary Payer Recovery portal (MSPRP) a few weeks after settlement to ensure that there are no open conditional payment claims with the BCRC. A comprehensive list of claim will be provided if you search the MSPRP using the date of accident rather than the case number, since the BCRC may have multiple claim numbers for it.
Another issue that may come up post settlement involves the BCRC’s inappropriate attempt to demand conditional payments that were already addressed by the CRC and successfully disputed by the workers’ compensation carrier. This issue can best be resolved by working with the carrier to provide the BCRC with the CRC’s favorable appeal determinations.
The above examples serve to highlight some of the post settlement conditional payment issues that may come up in a settled case. The following tips may help you to address them:
- Secure executed authorizations from the beneficiary before the case closes to address conditional payment issues.
- Check the MSPR portal post settlement to ensure that there are no open claims with the BCRC post settlement.
- Work with the defense to address conditional payments with the BCRC when the carrier accepted responsibility for payment in the settlement terms.
- Remind the injured employee to promptly notify you of any correspondence from Medicare.
Synergy’s team of experts is also available to assist in addressing Medicare Secondary Payer compliance issues in your settlements. Our Medicare team of experts can make sure your files are closed compliantly and help avoid some of the unpleasant scenarios described herein.
Jason D. Lazarus is the managing partner and founder of the Special Needs Law Firm; a Florida law firm that provides legal services related to public benefit preservation, liens and Medicare Secondary Payer compliance. He is also a founding Principal and Chief Executive Officer of Synergy Settlement Services, which offers healthcare lien resolution, Medicare secondary payer compliance services, pooled trust services, settlement asset management services and structured settlements.