Avoiding Pitfalls in Medicare Secondary Payer Compliance

At the 2019 WCI Conference, a session discussed how to avoid common pitfalls of the Medicare Secondary Payer Compliance (MSP) process. The speakers were:

• Heather Sanderson – Chief Legal Officer, Franco Signor LLc
• Rose Arellano – Director of Healthcare Billing & Recoveries, Performant Corp (current CMS contractor)
• Cliff Connor – VP Medicare Compliance, Gallagher Bassett Services

Conditional Payments

Medicare has the authority to make conditional payments where the primary plan may not pay promptly conditioned on reimbursement from the primary plan. Medicare has the statutory right to pursue recovery from any entity to secure this conditional payment. This includes carriers, self-insured employers, suppliers, attorneys and claimants. They have seen Medicare pursue claims against all these parties through lawsuits. Recently they have seen Medicare pursue recovery against certain plaintiff law firms for their repeated violation of the conditional payment laws.

Role of the Commercial Repayment Center (CRC)

The current CRC for workers compensation is Performant Corp. The CRC is contracted by Medicare and they are responsible for all the functions related to the MSP process. This includes sending out Conditional Payment Letters (CPLs), Conditional Payment Notices (CPNs), and demand notices. They also respond to disputes and appeals. They refer uncollected debt tot he Department of Treasury for further collections actions.

The contractor indicated that payers should expect to see a significant increase in CP letters in September as they have worked through backlogs associated with the change in contractors. There are 385,000 liens totaling $4 billion that are outstanding but have not yet generated a CP notice.

Appeals should now be heard within 75 days because their backlog has cleared. There was lots of confusion in the transition between contractors which created delays and led to some appeals being misclassified. Once matters have been referred to Treasury, communication can be very confusion as they tend to be unresponsive. The CRC can assist with this communication.

Disputes

Payers have 30 days from receipt of a Conditional Payment Notice to dispute the notice. If you fail to do so a demand letter is issued. Some of the reasons to dispute include the Conditional Payment Notice include:

• Unrelated charges.
• Statute of Limitations
• Policy Limit exhaustion.
• Claim denial.
• Other medical/legal defenses.

When a demand letter is received you have 60 days to issue payment and up to 120 days to appeal. Appeals to an ALJ are taking around two years right now. Interest continues to accrue daily during these appeals so these delays could be costly. It is recommended that you pay under protest during the appeal process to avoid the interest accrual. In addition, paying under protest keeps the matter from automatically being referred to Treasury for collections which adds a significant layer of complications. Treasury can withhold federal funds for any reason in order to recover a lien. Payments should always be made to the CRC not Treasury because things sent to Treasury tend to get misclassified and lost in the process. Treasury is a “black hole” in terms of information going in but not coming out.

The biggest problem leading to disputes is providing billing errors. For example, you may have a back claim under workers’ compensation. The worker sees the doctor for an unrelated condition but mentions the back in their history and the physical adds that diagnosis code to the billing. The office visit has nothing to do with the back, but because that diagnosis code is there CMS will flag it as related to the claim.

Medicare Advantage Plans

Medicare Advantage plans continue to grow in popularity. These entities have the same recovery rights as Medicare. However the challenge associated with them is that you cannot easily uncover their liens in the same manner as getting this information from Medicare. The Plans are aggressively pursuing recovery through litigation, often years after the claim closes with the payer unaware that there was a recovery issue pending.