Recovery process (medicare)

Medicare Secondary Payer (MSP)
Liability Insurance
(Including Self-Insurance),
No-Fault Insurance,
& Worker’s Compensation
Recovery Process

Town Hall Meeting
April 14, 2010
Presented by: MSPRC
Monique Cooper, MSPRC Outreach Coordinator

1

ALERT!

This presentation has substantive changes that are
different from the “Attorney Town Hall Presentation”
previously posted to www.MSPRC.info website,
including:

• Conditional Payment Notice(CPN) and new related
processes.

• Updates to Liability Insurance, No-Fault Insurance, and
Workers’ Compensation Process Flow.

• Updates to slides concerning the COBC Responsibilities and
the Rights and Responsibilities Process.

• New Tools and Resources on www.MSPRC.info to assist in
the recovery process. 2

Medicare’s Right of Recovery
Liability Insurance, No-Fault Insurance, Workers’ Compensation

• The applicable statute is 42 U.S.C. 1395y(b). See particularly, 42 U.S.C. 1395y(b)(2)(A)&(B).
See also 42 CFR Part 411 for the applicable regulations.

• Medicare is secondary to all types of liability insurance, no-fault insurance, or workers’
compensation. Note: For liability insurance, this includes self-insurance which is defined by
statute as follows: “An entity that engages in a business, trade, or profession shall be deemed
to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance, or
otherwise) in whole or in part.”

• Medicare may make conditional payments while a claim is pending but is entitled to repayment.
“A primary plan, and an entity that receives payment from a primary plan, shall reimburse the
appropriate Trust Fund for any payment made by the Secretary under this title with respect to
an item or service if it is demonstrated that such primary plan has or had a responsibility to
make payment with respect to such item or service. A primary plan's responsibility for such
payment may be demonstrated by a judgment, a payment conditioned upon the recipient's
compromise, waiver, or release (whether or not there is a determination or admission of
liability) of payment for items or services included in a claim against the primary plan or the
primary plan's insured, or by other means.”

3

Objectives for Town Hall
To understand how actions in a pending liability insurance, no-fault
insurance, or workers’ compensation claim interact with Medicare’s
recovery rights, processes and timelines. These include:
• When to contact CMS’ Coordination of Benefits contractor (COBC),
• The new Rights and Responsibilities Letter,
• The difference between Proof of Representation and Consent to
Release,
• What "Proof of Representation" documentation is required for
representatives and their agents,
• The Conditional Payment Letter (CPL) process and timeline,
• The New Conditional Payment Notice (CPN) process and timeline,
• What to provide MSPRC when there is a settlement, judgment,
award, or other payment,
• The recovery Demand Letter process and timeline; and actions
subsequent to the Demand Letter,
• New additions and changes to the MSPRC Recovery Process. 4

Topics to be Covered
• Overview of Recovery Process • Conditional Payment Letter (CPL)
– www.MSPRC.info – Changes in process
– Life of a Liability Insurance, No-Fault – Timeline
Insurance, Workers’ Compensation – Updates on conditional payment
Recovery Case amounts
• COBC • Conditional Payment Notice (CPN)
– Roles & Responsibilities – Changes in process
– Contacting COBC – Timeline
• Rights and Responsibilities Letter • Notice of Settlement, Judgment,
– Changes & additions to prior Letter Award, or Other Payment
• Claim Retrieval and Review Process – Required documentation
– Process overview – Computing /issuing demand
– General timeframes of process • Paying the demand
– Sending payment
• Proof of Representation and – Required information
Consent to Release – Interest/Delinquency
- Differentiating between Proof of – Potential Referral to Department of
Representation and Consent to Release Treasury
- Required Documentation • What’s New
– Conditional Payment Notice
– www.MSPRC.info
5

Overview of the Recovery Process

Accident/incident/ Beneficiary goes to
illness occurs. hospital/doctor.

7


Medicare makes Beneficiary or representative
conditional payments for notifies Coordination of Benefits MSPRC issues Rights and
items/services. Contractor (COBC) of the Responsibilities Letter.
accident/incident/injury. COBC If the beneficiary has
begins gathering initial information an attorney or
about the accident/incident/injury. representative, they
must submit
appropriate proof of
representation.

8


The MSPRC search MSPRC identifies
of Medicare Medicare paid
claims begins. medical claims related
to the
case and issues
Conditional
Payment Letter (CPL)

9


Settlement, judgment, award, or other
payment is reached. The beneficiary,
attorney and/or authorized The MSPRC identifies final
representative payment
must submit to the MSPRC the amount, calculates amount
settlement owed and issues the
information and include the settlement Demand Letter.
amount, date, attorney's fees and cost.

10


Option 1 - Payment

MSPRC receives
check for demand MSP Case
amount. Complete.

11


Option 2 - Questions

Post demand correspondence
sent to the MSPRC.
(e.g. questions, appeals, request for waiver, etc.)

12


Option 3 – No Payment

If full repayment is not
Interest accrues from received within 60 days of
date of demand and is Intent to Refer Letter (120
assessed if the debt is days of demand), debt is
not resolved within referred to Treasury once
60 days. any outstanding
correspondence is worked.
13

Coordination of Benefits Contractor (COBC)
Roles & Responsibilities
In Liability Insurance, No-Fault Insurance & Worker’s Compensation Cases

• The COBC collects information from multiple sources to
research MSP situations, as appropriate. (e.g. The COBC
collects the information from claims processors,
MMSEA Section 111 Mandatory Insurer Reporting
submissions, Initial Enrollment Questionnaire (IEQ),
Worker’s Compensation carriers).

• The COBC is responsible for updates to MSP situations
including insurance updates, address changes, changes
in coverage effective dates, etc.

14

Reporting a Case to COBC
Always contact the COBC first whenever you have a pending Liability
Insurance, No-Fault Insurance & Worker’s Compensation claim. Be
prepared to provide the COBC with the following information:
• Beneficiary Information
–Beneficiary’s Name
–Beneficiary’s Medicare Health Insurance Claim Number (HICN)
–Beneficiary’s Gender and Date of Birth
–Beneficiary’s Address and Phone number
• Case Information
–Date of injury/accident, date of first exposure, ingestion or, implant.
–Description of alleged injury or illness or harm.
–Type of Claim (Liability insurance, No-Fault insurance, Workers’
Compensation).
–Insurer/Workers’ Compensation name and address.
• Representative Information
–Representative/attorney name
–Law Firm name if the representative is an attorney
–Address and phone number 15

Contacting COBC

By Telephone
COBC Call Center:
1-800-999-1118
1-800-318-8782 (TTY/TDD)
Hours of Operation: Monday – Friday 8am-8pm(ET)

By Mail - General Inquiries
MEDICARE– Coordination of Benefits
P.O. Box 33847
Detroit, MI 48232 – 5847

Note: The COBC and MSPRC both have Detroit addresses.
Double-check the address you use.
16

Rights and Responsibilities Letter

• Once the case is established with the COBC, you will
receive a “Rights and Responsibilities” Letter (RAR)
from the MSPRC.

• The RAR Letter is mailed to all authorized
individuals/entities associated with the case and is
accompanied by:
–A correspondence coversheet,
–An educational brochure, and
–A Privacy Act enclosure.

17

Claim Retrieval Process
• The MSPRC begins retrieving all claims paid by Medicare with dates of service
on or after the Date of Incident. Once the MSPRC receives this information,
the claims are reviewed to determine which items and/or services are related
to the Liability Insurance, No-Fault insurance, or Workers’ Compensation case.

• MSPRC is not able to provide the Conditional Payment information until the
medical claims information is available and has been reviewed.

• This process takes approximately 8 weeks.

• During this time either Proof of Representation or Consent to Release
documentation, as appropriate, needs to be sent to the MSPRC as soon as
possible.

• If no valid Proof of Representation or Consent to Release document has been
received by the MSPRC, the Conditional Payment Letter (CPL) will ONLY be
sent to the beneficiary and any no-fault insurer or workers’ compensation
carrier reflected in the MSPRC’s records.

18

Proof of Representation vs.
Consent to Release
Documentation requirements for a wider array of proof of representation or
consent to release situations can be found at www.MSPRC.info in the “Proof
of Representation vs. Consent to Release” presentation. The presentation
includes:
• Beneficiary non-attorney representatives,
• Beneficiary attorney representative,
• Beneficiary guardians, conservators, power of attorney, Medicare
representative payees,
• Situations where the beneficiary’s representative (representative payee,
conservator, guardian, power of attorney) has hired an attorney or the
beneficiary attorney has referred the case to another attorney,
• Deceased beneficiaries,
• Workers’ Compensation or No-Fault Insurance vs. Liability Insurance
(Including Self-Insurance),
• Agents for insurers or workers’ compensation carriers.
19

For purposes of this presentation, we will be focusing on
the documentation required if you are an attorney
representing a Medicare beneficiary, including if you are
using an agent to assist you in resolving any potential
Medicare recovery claim. However, you should take the
time to review the full “Proof of Representation” vs.
“Consent to Release” presentation on www.MSPRC.info for
other issues.

20

Consent to Release

• The beneficiary has authorized an individual or entity to receive certain
information from the MSPRC for a limited period of time.

• The Consent to Release does NOT give the individual or entity the
authority to act on behalf of the beneficiary.

• The Consent to Release does NOT give the individual or entity receiving
beneficiary information the right to further release that information.

• The exchange of information is like a one-way street.
(i.e. The flow of information goes only from the MSPRC to the individual
or entity the beneficiary has authorized on the consent to release.)

21

Proof of Representation
• The beneficiary has authorized the individual or entity (including an
attorney) to ACT on the beneficiary’s behalf.

• The representative may receive and/or submit information/requests on
behalf of the beneficiary including:
– Responding to requests from the MSPRC,
– Disputing unrelated claims on Conditional Payment Letters/Notices,
– Correcting case related information (e.g. date of incident),
– Filing an appeal (if appropriate) or filing a request for waiver of
recovery (if appropriate).

• The exchange of information is like a two way street.
(i.e. Information can be exchanged between MSPRC and the
representative the beneficiary has authorized to act on his/her behalf.)

22

Proof of Representation Requirements –
Beneficiary Attorney Representative

• Attorneys representing Medicare Beneficiaries may submit their
retainer agreement with the beneficiary if:

– The retainer agreement is on attorney letterhead or
accompanied by a cover note on letterhead,
– The retainer agreement is signed by the beneficiary,
– The beneficiary’s name and Medicare Health Insurance Claim
Number (HICN) are printed at the top of the form (this may be
added after the retainer agreement is signed),
– The retainer agreement is signed or countersigned and dated
by the attorney.

• Attorneys representing Medicare Beneficiaries may also provide
the same proof of representation as non-attorneys if they wish to
do so.
23

Proof of Representation Requirements –
Beneficiary Attorney Representative (cont.)

• Attorney representing Medicare Beneficiary refers a matter to
another attorney – The second attorney must have a letter from
the first attorney showing his/her association on the beneficiary’s
claim and the necessary proof of representation document or
retainer agreement from the beneficiary to the first attorney.

• Attorney representing Medicare Beneficiary hires an agent to
resolve Medicare’s potential recovery claim – The agent must
have a beneficiary specific letter from the attorney specifying that
the agent has been hired to resolve Medicare’s potential recovery
claim and the necessary proof of representation document or
retainer agreement from the beneficiary to the attorney.

• In other words, you must have an appropriate chain of
authorization. We need to be able to link the beneficiary to you.
24

“Proof of Representation” and “Consent to Release”
Model Language

• The MSPRC has separate downloadable documents on
www.MSPRC.info which provides model language for
“proof of representation” and “consent to release” for
purposes of interacting with the MSPRC.

• Individuals/entities are not required to use this model
language but must provide all of the information
requested in the model language.

25

What is a conditional payment?

• A conditional payment is a payment that Medicare makes
for services where another payer may be responsible. This
conditional payment is made so that the beneficiary
won’t have to use his/her own money to pay the bill. The
payment is “conditional” because it must be repaid to
Medicare when a settlement, judgment, award or other
payment is secured.

• If Medicare makes a conditional payment, and the
beneficiary gets a settlement, judgment, award or other
payment, Medicare will recover the conditional payment
from the settlement. The beneficiary is responsible for
making sure that Medicare gets repaid for the conditional
payments. 27

What is a conditional payment?
(continued)
Example:

Rose is driving her car when someone in another car hits
her. Rose has to go to the hospital. The hospital tries to
bill the other driver’s liability insurer. The insurance
company disputes who was at fault, and won’t pay the
claim right away. The hospital bills Medicare, and
Medicare makes a conditional payment to the hospital for
health care services that Rose received. Later, when a
settlement is reached with the liability insurer, Rose
makes sure that Medicare gets its money back for the
conditional payment.
28

Conditional Payment Letter (CPL)

29

• An initial Conditional Payment Letter (CPL) does NOT need to be
requested. A CPL will be generated automatically within 65 days of
the issuance of the "Rights and Responsibilities Letter"
–This allows all available medical claims to be retrieved.

• Conditional Payment Letters will go to all authorized
individuals/entities.

• Additional requests for Conditional Payment Letters will not speed
up the process.

• Normally if a Conditional Payment Letter has been sent, requests
for an updated CPL can only be processed every 90 days after the
previous CPL was issued.

30

(continued)
• Review the Conditional Payment Letter thoroughly to make
sure that only case related claims are included.

• Up –to-date Conditional Payment amounts can be accessed
on the MyMedicare.gov website (attorneys will need to gain
access through their clients).
• If the MSPRC does not timely receive proof of representation
for the beneficiary or information concerning the no-fault
insurer or workers’ compensation, the initial CPL will be
issued solely to the beneficiary. The most expedient way for
the beneficiary’s representative to obtain a copy of the CPL
in this situation is to request a copy from the beneficiary.
31

Conditional Payment Notice (CPN)

32

Conditional Payment Notice (CPN) –
What is a CPN?

• A CPN is issued in lieu of a Conditional Payment Letter
(CPL) in certain circumstances when a settlement,
judgment, award or other payment has already
occurred.

• A CPN provides conditional payment information AND
tells you what actions must be taken because the
MSPRC has been notified of a settlement, judgment,
award or other payment.

33

When a CPN Will Be Sent
There are two instances when this letter will be issued
in place of the usual Conditional Payment Letter
(CPL). They are:
1. If the MSPRC is notified of a settlement, judgment,
award, or other payment through Section 111 reporting
rather than from the beneficiary or their
representative. For further information on Section 111
reporting go to www.cms.gov/mandatoryinsrep

2. If the MSPRC has been alerted to a settlement,
judgment, award, or other payment by the beneficiary
or their representative before the usual Conditional
Payment Letter (CPL) has been issued. (Continued on next
slide)
34

When a CPN Will Be Sent
(Situation 2 continued)

Note: Currently, the MSPRC sends a demand when it
receives notice of settlement, judgment, award or
other payment, however, with this new process, the
MSPRC will not send a demand but will send a
Conditional Payment Notice to allow the beneficiary
and attorney to review the conditional payments. If
there are claims not related to your case on the
Conditional Payment Notice, the beneficiary/attorney
will need to follow current dispute procedures within a
condensed timeframe printed on the Notice.

35

What does the CPN mean to you?
• In most cases, the Beneficiary and/or Representative will receive the Conditional
Payment Notice (CPN) within 65 days of the issuance of the Rights and
Responsibilities Letter. Exception: A CPN will be sent if the MSPRC receives
notification of a settlement from Section 111 reporting after the initial CPL is
issued.

• After the Conditional Payment Notice (CPN) has been issued to the debtor and any
authorized representatives, the MSPRC will allow up to 30 days for a response. A
response to the CPN should include:

– All proof of representation documentation, if not already submitted.
– Proof of any items and/or services that are NOT related to your case, if
applicable.
– All settlement documentation if you are providing proof of any items and/or
services not related to your case.
– Procurement costs and fees paid by the beneficiary, if not already submitted.
– Documentation for any additional or pending settlements, judgments, awards,
or other payments related to the same incident.
36


• If a response is received within 30 days, the correspondence
will be reviewed and a demand will be issued.

• If a response is not received within 30 days, a demand will
automatically be issued requesting repayment of all
conditional payments related to your case without a
proportionate reduction for fees or costs, if this information
has not already been submitted.

37

(Continued)

• Procurement costs and fees paid by the beneficiary are
necessary to correctly calculate the demand amount.

– NOTE: If the MSPRC does not have this information, it cannot make a
pro rata reduction to the conditional payment amount as set forth in 42
CFR 411.37.

• The total conditional payments may increase after the CPN is
issued if Medicare paid for additional items and/or services
related to your case.

38

Overview of the Conditional Payment
Notice (CPN) Process

If one of the situations below occur,
then the following steps will take place.

1. If the MSPRC is notified of a
settlement, judgment, award, or
other payment through Section 111
reporting rather than from the
beneficiary or their attorney.
MSPRC identifies
2. If the MSPRC has been alerted to a Medicare reimbursed
settlement, judgment, award, or claims related to the
other payment by the beneficiary insurance/workers’
or representative before the usual compensation claim and
Conditional Payment Letter would issues Conditional
have been issued. Payment Notice(CPN).

39


Option 1 - Response Option 2 – No Response

40


Response cont. No Response cont.

Once the Conditional If no response is received
Payment Notice within 30 days of the
response/dispute is issuance of the Conditional
resolved, MSPRC identifies Payment Notice, the MSPRC
final conditional payment will automatically issue a
amount and a Demand Demand Letter.
Letter is issued.
41

Notice of Settlement, Judgment,
Award, or Other Payment
• Once the case has settled, appropriate documentation must be furnished
to the MSPRC.

• Required information includes:
– Date of Settlement, Judgment, Award, or Other Payment,
– Amount,
– Attorney’s Fees (borne by the beneficiary),
– Other procurement costs borne by the beneficiary (itemized),
– In some instances, a copy of the settlement, judgment, award or other
payment will be requested as well as a copy of the release signed in
connection with the settlement, judgment, award or other payment.

• Where a matter is in dispute, MSPRC takes attorney fees and other
procurement costs borne by the beneficiary into account when computing
a demand amount (see 42 CFR 411.37). Note: If the beneficiary’s
representative hires another individual or entity to resolve any Medicare
recovery claim, this fee may not be included in the procurement cost.
This is not a cost incurred to obtain the settlement, judgment, award or
other payment. 42

The “Final Settlement Detail”
document can be found at www.MSPRC.info
website. This is a form one can use to fill in the
required information.

For further directions, please see
http://www.msprc.info/forms/Final_Settlement_Detail.pdf

43

Demand Letter
• Once the appropriate documentation concerning a
settlement, judgment, award, or other payment is
received by MSPRC, a Demand Letter is generated.

• Payment is due within 60 days of the date of the
Demand Letter.

44

Demand Letter
Interest
• Interest accrues from the date of the Demand Letter
and will be assessed on the outstanding balance on day
61 if no payment is received within 60 days of the date
of the demand.
• Payment is applied to interest first, principal second.
Requests for appeal or waiver of recovery do not stop
the accrual of interest.
• Where the beneficiary has requested an appeal or
waiver of recovery, interest continues to accrue. The
beneficiary can prevent interest by making payment. If
the request is successful, the MSPRC will issue a refund,
as appropriate.
45

Delinquency, Referral to Treasury
• Medicare is required to refer delinquent debts to Treasury for further collection
activities.
• The debtor is notified of delinquency through an Intent to Refer Letter (a
“Notice of Intent to refer Debt to the Department of the Treasury or a Treasury
Designated Debt Collection Center for Cross-Servicing and Offset of Federal
Payments”) which provides 60 days for a response resolving the debt.
• The MSPRC will not refer a debt to Treasury until it has worked any associated
correspondence. If there is no outstanding correspondence the MSPRC may
refer a debt to Treasury as soon as 120 days after the demand but must refer
all such debts before they are 180 delinquent (240 days from the date of
demand).
• Once debt is referred to Treasury, all correspondence must be directed to
Treasury not the MSPRC.

– NOTE: Medicare does not refer debts to treasury if the debts are the
subject of a waiver of recovery request or an appeal.

46

Repaying the MSPRC
• When sending payment, please make checks payable to
“Medicare”.

• Please ensure that the following information is included
either on the check or on an attached remittance:
– Beneficiary's Name
– Beneficiary's Medicare Health Insurance Claim Number (HICN)
– Type of Case
– Date of Injury

• If the check is also payable to any parties other than
Medicare, please ensure the check is fully endorsed
prior to sending it to the MSPRC.
47

MSPRC CONTACT INFORMATION
Normal contact process:
• Call our call center at 866-677-7220 during our
operating hours 8 AM – 8 PM, Monday – Friday,
Eastern time.

• Use the “Call Back” feature on our website at
www.MSPRC.info.

• Please have the beneficiary’s Medicare Health
Insurance Claim Number (HICN) when calling the
MSPRC.

• Please include the HICN and date of incident on all
correspondence mailed or faxed to the MSPRC.
48

www.MYMEDICARE.gov
• See the site for further information.

• Medicare Beneficiaries can view various types of
information on this site. (Representatives can only
obtain access through the beneficiary they represent.)

• Where the MSPRC has established a potential liability
insurance, no-fault insurance, or workers’ compensation
recovery case, once it has retrieved claims and reviewed
them to determine which are related to the pending
claim, this information will be available on an MSP TAB
for that particular Medicare beneficiary. The
information will be updated as the MSPRC updates its
information. 50

Thank you for your attention and participation.

51

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