In 1980, the Medicare Secondary Payor (MSP) Act was enacted providing that Medicare may not pay medical bills for a beneficiary’s treatment when payment “has been made or can reasonably be expected to be made under a Workers’ Compensation plan, an automobile or Liability policy or plan (including a self-insured plan), or under no-fault insurance.” 42 U.S.C S 1395y (b)(2) and S1862 (b) (2) (A) (ii).
If the claim is denied or the Insurance Carrier does not pay on time, Medicare may make a “conditional payment.” Any conditional payment is subject to recovery by Medicare upon settlement, judgment, award, or other payment.
Section 111 Reporting
To better track conditional payments, Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 was passed. Section 111 Reporting, as it is commonly called, requires reporting regarding Medicare beneficiaries who have coverage under non-group health care plans or who receive settlements, judgments or other awards through Liability, no-fault or Workers’ Compensation insurance.
Reporting is divided into two categories. Ongoing Responsibility for Medicals (ORM) refers to the Insurer’s obligation to report cases where they have accepted the responsibility to pay medical bills on an ongoing basis. Total Payment Obligation to the Claimant (TPOC) refers to the obligation to report payment of a “one time” or “lump sum” settlement, judgment or award.
Cases are reported to the Benefits Coordination Recovery Contractor (BCRC). The BCRC opens a file and collects information to update the CMS databases used in the recovery process. The BCRC is then responsible for the recovery of amounts owed to Medicare as the result of a Liability, no-fault or Workers’ Compensation settlement, judgment or award or TPOC cases.
The BCRC transfers cases for ORM to the Commercial Repayment Center (CRC). The CRC is responsible for the recovery of conditional payments where a Liability, no-fault or Workers’ Compensation entity has assumed ongoing responsibility for the payment of medical bills or ORM.
Penalties for non-compliance are severe and may result in the Insurer being fined up to $1,000.00 per claim/per day for non-compliant reporting. Due to the stiff penalties for non-compliance, most Insurance Carriers will promptly report. However, instances may arise when the Insurance Carrier does not promptly report and the Injured Worker’s or Plaintiff’s Attorney may report the case.
To report a case to Medicare, contact the BCRC and have the following information available:
- Beneficiary’s Full Name, Address and Phone Number, HICN Number, Gender and Date of Birth
- Date of Injury
- Type of Claim, Insurer’s Name and Address
- Attorney, Law Firm, Address and Phone Number
- Description of Injury, including the ICD 10 codes
Practice tip: Review the ICD 10 codes that are reported by the Insurance Carrier. They will define the description of injury in Medicare’s eyes and will impact your client’s future medical payments made by Medicare.
If you have a case that was not properly reported, call MSA Meds today! We partner with experts in reporting and lien resolution to offer you one point of contact for all of your MSP compliance needs.
COB Lien Resolution
Once the case is reported and a file is opened, the contractor will begin gathering medical payments that were paid by Medicare but should have been paid by the Liability, no-fault or Workers’ Compensation Insurer.
The CRC Process
- A Conditional Payment Letter (CPL) or Conditional Payment Notice (CPN) is issued. A CPL is an estimate of conditional payments and is not time-sensitive. A CPN requires an informal dispute of any inappropriate items within 30 days.
- Next, a Demand Letter is issued, triggering the payment obligation and imposing a deadline of 120 days to file an appeal.
- If/when payment is made in full, a Paid in Full (PIF) letter is issued. If the demand was disputed, a Determination Letter is issued.
- If there is no payment or “open correspondence” at day 180, the debt is sent to the US Treasury for collection. Recovery efforts are against the Liability, no-fault or Workers’ Compensation Insurer. This recovery process will repeat throughout a claim if the ORM remains open.
The BCRC Process
- Upon notification of a settlement, the BCRC will issue a Final Demand. The beneficiary has up to 120 days to initiate the appeals process.
- On day 65, after the Final Demand, an Intent to Refer is issued.
- At day 120, the debt is sent to the Treasury Department to collect. Recovery options include the garnishment of Social Security benefits and Income Tax Refunds.
- Recovery efforts are against the Beneficiary. This may cause issues where the Workers’ Compensation insurer has agreed to pay the bills pursuant to the terms of the settlement.
Practice tip: Carefully review the Conditional Payment ledger; not all claims listed are legitimate. Requests for removal of inappropriate items must be in writing and made pursuant to Medicare’s time deadlines. In rare cases, Medicare will waive all or part of its lien pursuant to the Hardship Waiver Provisions.
Contact MSA Meds
Contact MSA Meds for help with COB Lien Resolution. We partner with experts in MSP compliance to give you one convenient point of contact to protect your clients’ future Medicare eligibility.