CMS Releases Details of Pre-Settlement Final Conditional Payment Program

Over the weekend, the Centers for Medicare & Medicaid Services (Medicare) issued details regarding the new Medicare repayment option originally announced at the end of December. This option will be available for use starting February 21, 2012 and allows Medicare beneficiaries (with certain case types) the ability to obtain agreed-upon claims up to 60 days prior to settlement. Factors limiting the use of this option include settlement amount, type of settlement, completion of medical treatment, projected settlement date, and time elapsed since date of incident.

The Centers for Medicare and Medicaid Services (“Medicare”) has released preliminary instructions on a new process relevant to conditional payment reimbursement under the Medicare Secondary Payer (“MSP”) Act (42 U.S.C. §1395y(b)(2)). This option permits certain Medicare beneficiaries to receive a final conditional payment amount from Medicare prior to settlement. Historically, Medicare’s conditional payment reimbursement process has not allowed a Medicare beneficiary or settling parties from obtaining such pre-settlement information from Medicare or its recovery contractors.

Eligibility Limitations

This new resolution tool can only be used where certain conditions are met. Those conditions include:

1. Physical-Based Trauma: The liability insurance (including self-insurance) settlement must be for a physical trauma based injury (the settlement cannot relate to ingestion, exposure, or medical implant);
2. $25,000 Cap: The total liability settlement, judgment, award, or other payment will not exceed $25,000;
3. Date of Incident Timeline: The Date of Incident must have occurred at least six months before the beneficiary or representative submits the proposed conditional payment amount to Medicare;
4. No Continuing Treatment: The beneficiary’s treatment must have been completed for at least 90 days prior to submitting the proposed conditional payment amount to Medicare and no further treatment can be expected. A written physician attestation or beneficiary certification in writing that no medical treatment related to the case has occurred (see below); and
5. Settlement Timing: Settlement must occur within 60 days of the issuance of Medicare’s agreement with the claims amount.

The Process

If a case meets all of the above eligibility requirements, then using Medicare’s model language, a request for a Final Conditional Payment Amount can be submitted. The following must be included in this request:

• The approximate settlement amount;
• A list of any unrelated claims covered by Medicare;
• A list of any additional claims paid that were not covered by Medicare;
• An explanation of any disputed claims;
• A description of the injury (or injuries) sustained;
• Certification that the Medicare beneficiary’s case meets the eligibility requirements;
• Physician attestation or certification that no injury-related care has occurred in the last 90 days and no future injury-related care is needed; and
• Beneficiary, Representative or Attorney signature.

Within 60 days of the submission, Medicare will provide a response to the proposed amount and settlement information can be provided for processing of Medicare’s Final Demand.

Take Aways

Although the extent to which this resolution tool will apply to personal injury cases is unknown at this time, this new Medicare claims resolution tool is a major step in the right direction. By permitting settling parties under the right set of facts and circumstances to obtain Conditional Payment summaries before settling their cases, Medicare is signaling its desire to continue to improve its cost recovery mechanisms.

Settling parties should take note of this pre-settlement protocol and update their case intake procedures to identify those cases eligible for expedited treatment. Medicare’s pre-settlement protocol further supports the Garretson Resolution Group’s position that a formalized process that early on addresses Medicare enrollment status, audits claims and resolves and satisfies Medicare’s repayment rights will best protect the parties and ensure compliance with the MSP Act. Simply put, “verify, resolve & satisfy” is still the gold standard which all settlements should follow to prevent double damages and other post-settlement complications from arising.

Now, starting your Medicare verification process early under the right set of circumstances, can lead to even greater rewards as for those qualifying cases an expedited resolution timeline will lead to quicker payments with less fear of the unknown.

If you have any questions about this new option or any other Medicare Secondary Payer issues, please call us at (866) 694-4446.