MEDICARE FAQ
How long does Medicare Conditional Payment resolution usually take?
Approximately 14 days after the claim has been reported, the BCRC will then begin preparing an itemization of all bills paid by Medicare. Within 65 days, the BCRC will send the first CPS to the beneficiary or their agent. This information may be available sooner on the MSPRP (portal).
Once the underlying personal injury action has resolved, the settlement information needs to be reported to Medicare. Within 7-14 days, we will receive a Final Demand. This amount must be repaid within 60 days or interest will begin to accrue. Once the final Demand is paid, a closure letter can be received within 7-12 days.
How much must be repaid to Medicare?
The amount that must be repaid to satisfy Medicare’s interest is determined by application of the appropriate reduction regulation.
- Medicare’s interest will be reduced by procurement costs according to statute if the Medicare payments are less than the judgment or settlement. Per C.F.R. 411.37(c):
- Add (Attorney’s Fees) and (Costs) = Total Procurement Costs
- (Total Procurement Costs) / (Gross Settlement Amount) = Ratio
- Multiply (Lien Amount) by (Ratio) = Reduction Amount
- (Lien Amount) – (Reduction Amount) = Medicare’s Final Demand Amount
- Medicare will allow for the attorney to take procurement costs from the overall settlement when Medicare payments are equal to or exceed the judgment or settlement.
- Add (Attorney’s Fees) and (Costs) = Total Procurement Costs
- (Gross Settlement Amount) – (Total Procurement Costs) = Medicare’s Final Demand Amount
Unfortunately, it is possible that Medicare’s Final Demand results in zero recovery for the beneficiary. If this is the case, or the amount of the Final Demand is substantial Synergy has a Medicare Final Demand Refund service. (Hyperlink to Refund)
Who is responsible to repay Medicare?
Everyone who was party to the resolution of the underlying personal injury matter is equally liable to repay Medicare’s Final Demand.
The United States may recover under this clause from any entity that has received payment from a primary plan or from the proceeds of a primary plan’s payment to any entity.” 42 U.S.C. § 1395y(b)(2)(B)(iii)
“CMS has a right of action to recover its payments from any entity, including a beneficiary, provider, supplier, physician, attorney, State agency or private insurer that has received a primary payment.” 42 C.F.R. §411.24(g)
What happens if the Final Demand is not paid?
If the Final Demand remains unpaid, Medicare will transfer the matter to the Department of Treasury so that plaintiff’s future Social Security Benefits can be garnished. Should litigation be required by Medicare the attorney fee and costs reduction will be inapplicable as that reduction is based upon the idea that Medicare is repaid without the requirement of litigation. Additionally, though rarely exercised by CMS themselves, there is the Private Cause of Action which allows CMS to double the amount of the Final Demand if not repaid within 60 days.
MEDICARE GLOSSARY
Appeal
When a Final Demand has been issued but there are errors in the calculation of the lien on the part of the lien holder, an appeal is submitted, identifying the error and requesting a correction. In most cases, an appeal request is submitted only after the Final Determination has been made if there are unrelated claims or an incorrect calculation of the final lien. Medicare requests a minimum of 60 days for a response to any appeal requests.
Audit
The review of the Medicare Conditional Payment Summary to ensure there are no errors, duplicates or unrelated treatment is included.
BCRC
The Benefits Coordination and Recovery Center. This is Medicare’s recovery contractor.
Compromise
When a lien has been established by Medicare, a compromise can be proposed as an attempt to reduce the lien beyond the standard reduction for procurement costs. A compromise may be granted if the case meets the consideration requirements by CMS.
Conditional Payment
Medicare payment for services for which another payer may later become responsible.
CMS
The Center for Medicare and Medicaid Services
CPL
The Conditional Payment Letter which itemizes all the benefits provide that CMS believes are related to ongoing litigation.
Final Demand
The letter issued by BCRC once they have been notified of settlement. The amount demanded in this letter must be repaid within 60 days.
MSP
The Medicare Secondary Payer Act
MSPRP
Medicare Secondary Payer Recovery Portal. An online tool used to communicate directly with BCRC about specific open cases. https://www.cob.cms.hhs.gov/MSPRP/login
QIC
Qualified Independent Contractor. These organizations conduct 2nd level appeals (Reconsideration) for CMS and are outside BCRC.
Redetermination
The first level of administrative appeal filed with BCRC following the issuance of a Final Demand. The deadline for filing is 120 days.
Reconsideration
The second level of administrative appeal filed with the appropriate QIC following the issuance of a Redetermination from BCRC.
Waiver
In very special cases where a Medicare lien cannot be repaid by a beneficiary, a waiver request may be submitted to Medicare. This request is made by using form SSA-632-BK and describing the financial situation along with the reason for the inability to reimburse Medicare after an overpayment.
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