By Tal A. Wollschlaeger
Medicare Lien Analyst
Everybody expects to get paid back one way or another. Whether someone owes you money because you bought him or her lunch when times were tough or you owe money on your credit card bill and its past due, when money is owed there is an expectation on the other end to be paid back in some way shape or form, and Medicare is no different. The difference between Medicare and the preceding examples is that Medicare employs a recovery agent known as the Medicare Secondary Recovery Contractor (MSPRC). The MSPRC website has defined its role in the following manner: “The MSPRC protects the Medicare trust fund by recovering payments when another entity had primary payment responsibility and the MSPRC accomplish this under the authority of the Medicare Secondary Payer Act. MSPRC is tasked with identifying and recovering Medicare payments that should have been paid by another entity under either a group health plan or as part of a Non-Group Health plan. These plans include but are not limited to Liability insurance, No-Fault Insurance, and Workers’ Comp. MSPRC does NOT pursue supplier, physician, or other provider recovery.” As one can imagine this process is a long and arduous one but pretty straightforward and this post will outline said process from A-Z.
In order for Medicare to know about the potential recovery situation, they need to be informed of such by the parties to litigation. This is done by the beneficiary themselves or their representative notifying the Coordination of Benefits Contractor (COBC) via telephone. During this call information such as Name, Address, Date of Accident, Injuries sustained by beneficiary, Insurance coverage, and the Beneficiary’s Attorney’s name and address is given to COBC so they can report the claim properly to MSPRC. It typically takes 24-48 hours for the claim to be reported to MSPRC, during that time it is imperative that if the Beneficiary has an attorney or representative, he or she must send the MSPRC proper proof of representation in order for the MSPRC to release information to the representative. At this point in the process the case has been established and there is an authorized representative assisting the beneficiary with this matter. Now that this has been accomplished it’s time for MSPRC to begin identifying claims.
MSPRC only begins identifying claims for recovery when it receives notice of a pending no-fault, liability, or Workers Comp matter. As MSPRC is seeking out claims, Attorney’s for the injured party are trying to secure settlement with the at fault parties insurance carrier. MSPRC will NOT issue a formal demand letter until settlement, judgment, or award; instead they will produce the Conditional Payment Letter (CPL). The CPL lists all the claims paid to date that are related to the claim reported to the COBC. Claims are presented in a code format known as ICD-9 codes; these codes can be deciphered by inputting them into a code converter which can be found at the following link (http://www.aapc.com/icd-10/codes/index.aspx). These codes range from 3-5 digits and once they are plugged into the converter the diagnosis will be generated. For example, the code 4019 is associated with hypertension/high blood pressure and 7231 is associated with Neck Pain. Given that the letter doesn’t provide a final demand amount; Medicare might make additional conditional payments while the claim is pending. The CPL has no minimum and no maximum amount and tends to include unrelated claims frequently. For example, if the injuries reported to COBC were back and neck injuries and MSPRC includes a charge for chest pain, the chest pain would be considered an unrelated charge. However, fear not! The next step in the process can help take care of situations such as the one presented.
It is common practice when a CPL comes in for the representative to audit the bill using an ICD-9 Code Converter online and search for unrelated claims. Following the audit it can be determined whether or not the CPL contains unrelated charges or not. If all charges are related, then all MSPRC needs is settlement info and they will produce a Final Demand. Conversely, if there are unrelated charges found and the beneficiary/representative believes that those claims should be removed, then they must send correspondence to the MSPRC establishing that the claims are not related to what was initially claimed. Additionally, they must forward a copy of the CPL in question and circle any and all unrelated claims. If this is done then MSPRC will take between 30-45 days to review and process the dispute. They will either adjust the CPL amount to account for anything they agree is not related to what has been claimed, or they will send a letter notifying you that they disagree with the dispute and to please refer to the most up to date CPL. If the latter occurs, an additional dispute is not out of the question should the beneficiary or representative wish to pursue one. Basically, the process would be repeated however this time around MSPRC asks that you send them additional evidence or documentation such as medical records to support the dispute. This process can go on back and forth until the beneficiary/representative is ok with the amount and wants to go forward with the disbursement of settlement funds. Speaking of settlement that leads us to the final step in the recovery process, and that is the Final Demand Letter.
Earlier in this post it was mentioned that once MSPRC is notified of a settlement/judgment/award that it will produce the final demand letter. It is expected that the beneficiary/representative send the settlement documentation to the MSPRC. This information must clearly identify the date of settlement, the settlement amount, the amount of attorney’s fees and other costs. Upon receipt of this information MSPRC will identify any related (THUS THE IMPORTANCE OF AUDITING FOR UNRELATED CHARGES) claims provided up to and including the settlement date and will issue the formal demand letter. The final demand letter will include the beneficiary’s name and Medicare Health Insurance Claim Number (HICN); the date of incident, the date of incident, a summary of payments made by Medicare, the total demand amount which (in most cases) will always be less than the CPL amount, and information on the beneficiary’s waiver and appeal rights. All checks must be made payable to Medicare and include the beneficiary’s name and HICN. However, a Demand is like a ticking time bomb and needs to be taken care of by a certain date. Failure to respond within the specified time frame will result in interest accruing, and ultimately all debt will be referred to the Department of the Treasury. Interest will begin to accrue from the date of the demand letter but will only be assessed if the debt is not repaid within in the time period specified. When the deadline hits, interest is due and payable for each full 30-day period the debt remains unpaid. Interest will continue to be assessed on unpaid debts even if a beneficiary is pursuing an appeal or waiver, that’s why it’s vital to pay the demand amount in a timely manner even if you decide to fight. Better yet if the waiver/appeal is granted the beneficiary will receive a refund, thus it makes very little since to not pay Medicare within the time frame specified in the demand letter.
Hopefully, this information helped shed some light on what MSPRC does for Medicare and cleared up any confusion about the entire process. As noted earlier, this process can take quite some time but if one is mindful of deadlines and diligent in their work then it won’t be as painful as it ultimately can be.