By Donna M. MacKenzie, Esq.
Olsman Mueller Wallace & MacKenzie
As of February 5, 2014, the Coordination of Benefits Contractor (COBC) and the Medicare Secondary Payer Recovery Contractor are no longer handling Medicare’s recovery activities. Instead, all recovery activities are now being handled by the new Benefits Coordination & Recovery Center (BCRC).
Reporting your claim to Medicare
Whenever you have a tort liability, no-fault or worker’s compensation case, you will now provide the BCRC, not the COBC, with the following information:
- Beneficiary Information: Name, Health Insurance Claim Number (HICN), gender, date of birth, 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, worker’s compensation); insurer / worker’s compensation carrier’s (or self-insured employer’s) name and address.
- Representative Information: Representative / attorney’s name, law firm name if the representative is an attorney, address and phone number.
To contact the BCRC by phone, call 1-855-798-2627. The BCRC is available Monday through Friday from 8 a.m. to 8 p.m. The address for the BCRC is:
Benefits Coordination & Recovery Center (BCRC)
P.O. Box 1138832
Oklahoma City, OK 73113
As usual, Medicare does not surf court dockets to find cases where Medicare’s reimbursement rights are at stake; it is entirely up to the beneficiary and/or the beneficiary’s attorney to report the claim to Medicare. This obligation is even more ominous since the passage of Section 111 of the Medicare, Medicaid and State Children’s Health Insurance Program (SCHIP) Extension Act of 2007 (MMSEA), which added mandatory reporting requirements for insurers. PL 110-173, §111, 121 Stat 2497-2500, 42 USC 1395y(b)(7) and (8). Because insurers are now reporting any payment to a Medicare beneficiary, Medicare now has a built in security system that will alert it anytime a beneficiary receives payment.
Section 111 originally called for a mandatory $1,000 per day penalty for an insurer’s failure to report; however, that penalty is now discretionary and “up to” $1,000 per day. PL 112-242, §203(1), 126 Stat 2380, 42 USC 1395y(b)(8)(E)(i), effective 1/10/13. Although the penalties have been reduced significantly, insurers are regularly reporting to Medicare.
In the event that an insurer reports a claim that was not reported by a beneficiary, in practice, Medicare will seek recovery from the beneficiary and/or the beneficiary’s attorney first. Under the Medicare Secondary Payer Act, Medicare can recover twice the amount of an unpaid Medicare lien. 42 USC 1395y(b)(2)(B)(iii).
Liability Settlement Threshold
Effective February 18, 2014 (as “clarified” February 28, 2014), Centers for Medicare & Medicaid Services (CMS) increased its reimbursement threshold; as a result, claims with total settlement value of $1,000 or less do not need to be reported or reimbursed.
Rights and Responsibilities Letter
Once your case is established with the BCRC you will receive a Rights and Responsibilities (RAR) letter. In the past, this letter was sent by the MSPRC; this is now being handled by the BCRC.
The RAR letter provides confirmation that your claim is in the BCRC’s system. Once your claim is in the BCRC’s system, it will take approximately eight weeks for all medical claims that are related to your case to be retrieved by the BCRC.
The RAR letter will also request a Proof of Representation form.
Proof of Representation
Medicare will not communicate with anyone without an executed Proof of Representation. If your Retainer Agreement contains the following elements, it will serve as satisfactory proof of your representation:
- The name of the law firm in the body of the Retainer Agreement, on the law firm’s letterhead, or on a coversheet on the law firm’s letterhead.
- The attorney’s name, printed so the BCRC can read it.
- The attorney’s signature and the date of the signature.
- The beneficiary’s Medicare Number.
- The attorney’s signature and date the attorney signed added to the bottom of the Retainer Agreement.
However, you may also use the Proof of Representation form created by CMS. You can have this Proof of Representation form executed by your client in advance. Either a compliant Retainer Agreement or the Proof of Representation will give you authority to act on the beneficiary’s behalf.
Conditional Payment Letter
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.
Assuming that you have timely provided proper Proof of Representation, you will automatically receive a Conditional Payment Letter (CPL) within 65 days of receiving the RAR letter.
The CPL will contain an interim amount of the total claims that Medicare believes are related to your case. The CPL is not a request for payment. In addition, Medicare may continue to make conditional payments while a matter is pending. Consequently, the BCRC cannot provide a final conditional payment amount until there is a settlement or other final resolution of your case.
CMS’ systems retrieve additional paid claims for each established case once every 90 days. Therefore, updated CPL amounts are generally unavailable until at least 90 days after the initial CPL is issued.
Future Medical Care
In 2012, regulations were promulgated that covered the provision of medical care in the future in claims involving liability insurance. Despite being promulgated almost two years ago, these regulations have yet to be implemented. 77 FR 35917. Moreover, there exists no mechanism for the creation, maintenance, or even approval of any liability Medicare Set Asides by CMS.
MyMSP Online Portal
Once your CPL has been sent, you can view up-to-date conditional payment summaries on the MyMSP tab of the Medicare website, which can be found at www.mymedicare.gov. The beneficiary must register on the website in order to obtain this access. An attorney or representative can register the beneficiary and as long as the attorney has the sign-in ID and password, the attorney can access the beneficiary’s information on this website.
One you receive the CPL, you should review it thoroughly to make sure that only case related claims are included. If there are any unrelated claims, you can submit documentation supporting that position to the BCRC. Within 45 days, the BCRC will review the submitted disputes and remove any unrelated charges. During the review process, if the BCRC identifies additional payments that are related to the case, those charges will be included in the recalculated CPL.
As of February 21, 2002, beneficiaries have been able to receive a final conditional payment amount prior to settlement, but only where the settlement is being paid for physical trauma and does not exceed $25,000. In addition, the incident must have occurred at least six months before the proposed conditional payment amount is submitted to Medicare, the beneficiary must have completed treatment for at least 90 days before submitting the amount, and further treatment cannot be expected. Under this process, a request for a final conditional payment amount is submitted to Medicare and Medicare will respond within 60 days.
These requirements significantly limit the number of cases in which a final demand can be obtained pre-settlement. In January 2013, however, President Obama signed the Strengthening Medicare and Repaying Taxpayers (SMART) Act into law. PL 112-242, 126 Stat 2373. Under the SMART Act, §201, 26 Stat 2375-2378, 42 USC 1395y(b)(2)(B)(vii), settling parties can notify Medicare of an anticipated settlement, judgment or other payment within 120 days of an anticipated settlement. Medicare would then have 65 days (with the ability to request an additional 30 days) to determine its lien amount. If the settlement occurs within 3 days of Medicare’s decision, the lien will be considered final. This entire process would take place through a specific password protected website created by Medicare. Unfortunately, over one year has passed since the Act was signed into law and the final regulations have not yet been implemented. It is unknown when that will happen.
When you report your settlement, judgment, award or other payment, the BCRC can take steps to expedite a final demand amount.
To request a final demand from Medicare, you need to provide Medicare with the following information:
- Total amount of the settlement
- Total amount of med-pay or PIP
- Attorney Fee Amount Paid by the Beneficiary
- Additional Procurement Expenses Paid by the Beneficiary
- Date the Case was Settled
The final demand that you receive from Medicare will include a reduction for your procurement costs. Medicare typically calculates the ratio of costs and expenses to the final settlement amount, and reduces its lien using that same ratio.
Statute of Limitations
The new statute of limitations, effective as of July 10, 2013, provides that Medicare has three years from the date of reporting to file suit for recovery under the Medicare Secondary Payer Act. 42 USC 1395y(b)(2)(B)(iii).