We routinely preach the importance of making sure you’re 100% Medicare compliant if you’re doing business in the P&C insurance realm.
But, despite our best efforts, there are still a lot of misconceptions and misunderstandings out there leaving a lot of well-intentioned companies exposed to potential non-compliance. And, although it’s not every one, we find that the majority of these companies are in the position they’re in because the leadership team has prescribed to one or more of the following excuses.
“We use Section 111 reporting, and that’s good enough.”
Unfortunately, this is a common refrain. But Section 111 reporting alone fails to take into consideration the other half of the reporting/recovery formula. What many of these companies are doing is reporting to Medicare every dime they owe in reimbursements for conditional payments, but then failing to follow up and actually pay Medicare back!
The resulting interest payments alone can run into the millions if the company processes any significant volume of claims.
“We have ‘hold harmless’ language in all of our contracts, so we’re protected.”
This is a false sense of security. The fact is, Medicare pays no attention whatsoever to the wording of your contracts with claimants, other insurance companies, or lawyers. Their only concern is your responsibility to them as a Responsible Reporting Entity (RRE). And, without fail, they come after large insurance companies first every single time.
“The claimant’s attorney is handling Medicare for us.”
This one is frightening. The claimant’s attorney has no reason whatsoever to protect your company and plenty of reasons not to care. Plus, few if any attorneys involved in the kind of personal injury cases that generate Medicare conditional payments are highly experienced in handling all the ins and outs of the reporting and recovery process. So even the best-intentioned lawyer can leave you completely exposed.
“I’m sure our claims examiners know all this already.”
The reality is that Medicare claims only comprise about 17% of any one claims examiner’s workload, and claims involving conditional payments will only be a fraction of that. Although the financial risk to your company is fairly high, Medicare compliance ranks very low on the day-to-day priority list of the average claims examiner.
“Working toward 100% compliance is more expensive than it’s worth.”
Medicare has set up the reporting and recovery requirements in such a way that failure to comply is actually egregiously expensive. Penalties include up to $1,000 per day for any claim improperly or not reported, and up to double the value of the entire claim plus interest for any conditional payment that is not properly reimbursed.
With any significant volume of claims being processed, you can see how those numbers can add up incredibly fast.
What bothers us the most about these and other common excuses that lend P&C companies a false sense of security is that 100% Medicare compliance is actually a fairly simple goal to reach with the right partners in your corner. At Flagship Services Group, we offer comprehensive Medicare Compliance Programs and have been at the cutting edge of Medicare compliance for years. We’re in the best position to help you be truly secure no matter what Medicare throws at you.