CMS Initiates Process Allowing for Obtaining Final Conditional Payment Amount Pre-Settlement


12/31/2015

On Monday, December 21, 2015 the Centers for Medicare and Medicaid Services  (CMS) published an Alert entitled: Modification of the Medicare Secondary Payer  Recovery Portal (MSPRP) for Inclusion of Final Conditional Payment (CP) Process  Functionality. CMS has completed the implementation of an electronic  method that allows claimants or their authorized representatives to obtain the  final conditional payment amount within three days of final settlement as  opposed to initiating lien investigation and resolution in anticipation of settlement  without a concrete time frame. The process through the MSPRP is very rigid in its  requirements which may limit its usefulness to parties settling workers’  compensation and liability cases.

Background

CMS initiated this process to meet the statutory requirements of the  Strengthening Medicare and Repaying Taxpayers Act of 2012 (the SMART Act)  which statutorily required access to conditional payment lien amounts by both an  insurer and a beneficiary. The statue requires:

  • a “protected period” during which a conditional payment demand could  considered reliable,
  • a formalized dispute process with concrete timeframes for CMS to  respond and
  • a mechanism to advise CMS of an anticipated settlement (120 days), and a  refresh feature allowing up to date conditional payment amounts.

With the recent appointment of the Commercial Repayment Center (CRC) to  initiate conditional payment recovery against insurers and primary payers, the  Alert addresses some questions regarding the process and the continued role of  the Benefits Coordination and Recovery Contractor (BCRC).

Pre-Settlement Final Conditional Payment Amount Process

The Alert makes clear some important procedural requirements to obtain the final  conditional payment amount pre-settlement which are consistent with SMART Act  requirements:

  • First, “authorized” MSPRP users have the option to notify CMS that a  recovery case is 120 days (or less) from an anticipated settlement. Any  party to the litigation can begin the process through the portal at the  appropriate time.
  • Second, a user can ensure that relatedness disputes are addressed within  11 business days of receipt of any dispute.
  • Third, it allows for the request of a Final Conditional Payment Amount  with a time and date stamped final conditional payment summary  document before settlement. The conditional payment amount can be  relied upon as long as the case is settled within three (3) calendar days of  requesting the Final Conditional Payment Amount and, if settlement  information is submitted through the MSPRP within 30 calendar days of  requesting the Final Conditional Payment Amount.

The Alert adds that a request for a Final Conditional Payment Amount can only be  done once per case. This requirement is not included in the SMART Act and  appears reflective of CMS’ need to ensure that information is not being provided  where imminent settlement is not anticipated. CMS reiterates that if the case is  not settled with three days and/or the settlement information is not submitted  through the MSPRP within 30 calendar days, the Final CP process, and thus the  Final Conditional Payment Amount will be voided. Thereafter, new claims may be  added to the case and the CP amount will be modified accordingly. Subsequent  disputes will not be held to the 11 day resolution timeframes applicable to  disputes raised during the “discrepancy” period mandated by the SMART Act.

Insurer Involvement in Process

CMS included an Important Note distinguishing between cases where recovery  will be initiated by the BCRC against the beneficiary/plaintiff and those that will be  initiated by the CRC against insurers/primary plans. An insurer and their  authorized representatives can initiate the final CP process on their insurer-debtor  case as long as a settlement is pending on the case and no outstanding Ongoing  Responsibility for Medicals (ORM) exists. Consistent with the CMS roll out of the  CRC to assert conditional payment recovery rights where Ongoing Responsibility  for Medicals (ORM) has been accepted, the MSPRP now allows an insurer to begin  the process only where ORM does not exist. Once the Final CP process has been  started by an insurer-debtor, two events will occur:

  • The insurer-debtor case will be closed and the debt will be transferred to  a new case where the beneficiary is the identified debtor.
  • The insurer and their authorized representatives will not be able to work  the new beneficiary-debtor case or receive copies of any recovery-related  correspondence related to the new beneficiary-debtor case until they  obtain and submit an authorization signed by the beneficiary.

The Alert is consistent with the change in philosophy that was reflected in the  appointment of the CRC to pursue insurers/primary plans. As noted, where  Ongoing Responsibility for Medicals (ORM) exists, the target of recovery by CMS  will be the insurer-debtor. As stated in previous ECS Industry News Bulletins,  recovery may begin before settlement and, possibly, on multiple occasions. Where  ORM does not exist, the beneficiary will be responsible for lien satisfaction and,  while the insurer carrier can initiate the conditional payment recovery process  using the new MSPRP, active participation in the process cannot be had without  authorization on behalf of the beneficiary.  Thus, new releases are required to be signed by the beneficiary for an insurer to  be allowed to receive information, dispute a conditional payment amount, and to  participate in any resolution. CMS MSPRP development and the existence of the  CRC have drawn a clear distinction regarding its thought process. Where ORM  exists, the CRC will pursue the insurer, and where it does not, the beneficiary will  be responsible.

Analysis

From a practical perspective, CMS has made the conditional payment recovery  process both counterintuitive and more cumbersome. In most typical workers’  compensation cases, ORM exists. Presumably, the CRC will initiate recovery efforts  against the insurer/carrier and the MSPRP would be utilized to resolve any  conditional payments. However, in most liability cases and denied workers’  compensation cases, ORM has not been accepted and the significant information  gathering, dispute, appeal and updating features will be left to the beneficiary and  their representatives absent a signed authorization in each instance. This process  limits the role of the insurer/carrier to only the initiation of the process as  opposed to ensuring active participation.

When considering the intent of the SMART Act to ensure to all litigants ready,  reliable and timely access to conditional payment information and to allow for  simplified procedures for challenging or satisfying Medicare’s interests, the  MSPRP and the new CRC process has fallen short of those goals. By essentially  limiting insurer/carrier participation in the conditional payment recovery process  based solely upon the acceptance of ORM, CMS has placed a new road block in  the path of insurers/carriers in achieving timely and uncomplicated claim  resolution.

ECS will continue to monitor the new MSPRP process and its effects following the  launch date. In the interim, ECS will conduct a series of webinars regarding the  procedural and practical aspects of the conditional payment process including the  CRC, BCRC, dispute processes, time limitations and best practices. See the  schedule below for dates and times.

ECS Web Presentation: Guide to the New CMS Pre-Settlement Final Conditional Payment Amount Process

Wednesday, January 13, 2016 – click here to register
2:00 pm | Eastern Standard Time (New York, GMT-05:00) | 1 hr

Thursday, January 14, 2016 – click here to register
4:00 pm | Eastern Standard Time (New York, GMT-05:00) | 1 hr

Having problems registering?  Click here for support.

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