Gina Cox No Comments

CheckMarkAchieving 100% compliance when dealing with Medicare as a secondary payer is not easy. It’s a difficult, time-consuming, and labor-intensive effort, and one that many P&C insurance companies fail to give the priority it deserves.

The complexity and difficulty rises from the fact that the detailed rules and regulations involved are constantly changing. Plus, the average claims adjuster only sees a few Medicare-related claims a month. To help get a claims adjuster on the road to compliance, here are 5 core steps to follow.

NOTE: This is, of course, an oversimplification. At Flagship, we’ve broken down a checklist of nearly 60 steps required for various claim types and circumstances. In fact, every one of those 60 steps includes one or more items that could cause a claims adjuster or claims manager to trip up, costing a lot of extra time and money.
But looking at the big picture, these five steps cover the major actions required to carry a Medicare personal injury conditional payment claim from start to finish as efficiently as possible.
  1. Report the Medicare Claim. The first step is to properly report the claim using the appropriate program that interfaces directly with the Centers for Medicare Services (CMS) system. Remember, reporting via telephone, fax, or any other method is not considered adequate.

  2. Request a Conditional Payment Letter. Medicare’s Benefits Coordination & Recovery Center (BCRC) makes an initial determination as to which items or services, if any, are related to a Medicare beneficiary, and an initial Conditional Payment (CP) letter is sent to the primary payer upon their request. This CP letter itemizes the health care charges Medicare has paid on behalf of the Medicare beneficiary. P&C insurers are then expected to reimburse Medicare for Conditional Payments if the insurer provided any payment (i.e. settlement, judgment, award, other) to the beneficiary or health care provider.

  3. Request a Final Demand Letter (FDL) from Medicare with updated medical expenses related to the injury. New expenses may have been incurred and accrued since the last Conditional Payment letter, and the insurer can be obligated to pay those charges as well.

  4. Submit Reimbursement to CMS. Just like paying taxes after filing them and calculating what you owe, you have to issue payment via check directly to CMS. Interest and penalties can accrue if this lien is not paid.

  5. Obtain Case Closure Letter. A Case Closure Letter is Medicare’s “gold seal of approval” in the Conditional Payment recovery process. Receiving one means that you have dotted every “i” and crossed every “t.” With such a letter Medicare is letting you know, in writing, that you have no more obligations to them for a particular claim. A letter documenting case closure, thus, represents the ultimate Medicare compliance audit trail. If 100 Medicare beneficiaries are identified, and an insurer obtains 100 letters, that company is 100% compliant. Rare exceptions notwithstanding, it’s really that simple.

The five steps outlined above were excerpted from our new guide, “Distinguishable But Inseparable: Your Responsibility to Medicare and Why You’re Probably Doing it Wrong.” If 100% compliance and mitigation of costly risk is important to you, download your copy for free by clicking the big blue button below. We’re here to help you every step of the way.


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