Medicare is a government program that provides health insurance benefits to those above 65 years of age, the disabled, and those with end-stage renal disease. Prior to 1980, Medicare generally paid for medical services whether or not the Medicare beneficiary was also covered by another health plan. Then the Medicare Secondary Payer law (MSP) was enacted to reduce skyrocketing federal health care costs and protect the integrity of the Medicare system. The MSP makes Medicare the secondary payer for medical services provided to Medicare beneficiaries whenever payment is available from another primary payer.
The MSP requires Medicare beneficiaries exhaust all available insurance coverage before looking to Medicare’s coverage. To that end, the MSP law provides that “Medicare does not pay for items or services to the extent that payment has been, or may reasonably be expected to be, made through … a workers’ compensation entity. Medicare may make a conditional payment when there is evidence that the primary plan does not pay promptly conditioned upon reimbursement when the primary plan does pay”.
There can be a delay between when a bill is filed for a work-related injury and when the workers’ compensation insurance decides if they will pay the bill. Medicare will not pay for items or services that workers’ compensation will pay for promptly, this means generally within 120 days. If Medicare does make a payment, it is considered to be a “conditional payment” and if any other party later becomes responsible for payment of services already paid for by Medicare, then Medicare must be repaid.
The Benefits Coordination & Recovery Center (BCRC) is responsible for ensuring Medicare gets repaid for any conditional payments it makes related to a workers’ compensation claim. Whenever there is a pending workers’ compensation claim, it must be reported to the BCRC. If the BCRC determines that another insurance is primary to Medicare they will create an MSP occurrence and post it to Medicare’s records.
After the MSP occurrence is posted, the BRCR will initiate recovery activities against the responsible party and send the beneficiary a Rights and Responsibilities letter (RAR). The RAR explains what happens after a Medicare beneficiary files a workers’ compensation claim, what information BCRC needs and what information the beneficiary can expect from BCRC. If you want your attorney to receive the RAR and other communications from the BCRC, then your attorney must submit a consent to release form and if you want your attorney to speak with Medicare then you will need to submit a proof of representation, such as the signed retainer agreement with the attorney, to the BCRC.
The BCRC will begin identifying claims that Medicare has paid conditionally that are related to your workers’ compensation claim. Usually within two months or so of issuing the RAR, the BCRC will send a Conditional Payment Letter (CPL) and Payment Summary Form (PSF). The PSF will list all the items and services that Medicare has conditionally paid and which are related to your pending workers compensation claim. The CPL explains how to dispute any unrelated claims and provides an estimate as to how much Medicare needs to be reimbursed as of the date the letter is issued. Medicare may make additional conditional payments, which would also have to be reimbursed.
Should your case have already settled before it is reported to the BCRC, then a Conditional Payment Notification will be sent. The CPN provides information regarding the conditional payments and what actions you must take. You will have 30 days to respond and provide the requested information. The BCRC will review the information you have provided and issue a demand letter requesting payment.
Remember if you dispute the validity of any of claims listed on CPN, then you must send all your supporting information to BCRC as soon as possible. The BCRC will adjust the conditional payment amount if it agrees with your objections.
Once there is a settlement your attorney should notify the BCRC. The BCRC will set a termination date, which is generally the settlement date, identify any new conditional payments that may have been made and will issue a formal demand letter to the workers compensation insurance carrier listing the amount owed to Medicare. The amount due Medicare will have to be addressed by the settlement.
Interest on the amount due Medicare starts to accrue from the date of the demand letter, but is only assessed if the debt is not paid or otherwise resolved within the time frame set forth in the demand letter. Because of the high interest rate that the government can charge for failing to pay the final conditional payment demand within the required 60 days, the typical practice is to pay the demand and then request a waiver or compromise. If the waiver or compromise is granted, a refund will be issued.
This MSP framework creates a strong recovery right for Medicare, and it is often said that Medicare has a “super lien.” Medicare can seek repayment of their “conditional payments” from any party associated with the settlement of the workers’ compensation claim, including the attorneys. If the debt remains unpaid for 60 days after the date of the demand letter, it will be considered delinquent.
The debtor is notified of the delinquency through an intent to refer letter, which is a notice of BCRC’s intent to refer the debt to the Treasury Department’s Offset Program for collection. The law authorizes the Federal government to collect double damages from any party that is responsible for resolving the matter but has failed to do so.
It is critical that any conditional payments made by Medicare on your behalf be resolved without delay. Therefore, we highly recommend that you consult with an attorney regarding your workers’ compensation claim and how it may impact you financially.
MSA Meds stands ready to work with you and your attorney in resolving Medicare reimbursement issues and to assist you in managing the funds necessary to pay for your future medical care.