Recently, we celebrated a year since the Centers for Medicare & Medicaid Services (CMS) transitioned a portion of the Non-Group Health Plan (NGHP) Medicare Secondary Payer (MSP) recovery workload from the Benefits Coordination & Recovery Center (BCRC) to its Commercial Repayment Center (CRC). On October 5, 2015, the CRC assumed responsibility for the recovery of conditional payments where CMS is pursuing recovery directly from a liability insurer (including a self-insured entity), no-fault insurer or workers’ compensation entity, referred to as Applicable Plans (AP), as the identified debtor. Since then, CMS has been pursuing recovery directly from APs as the identified debtor when an applicable plan reports that it has ongoing responsibility for medicals (ORM) or otherwise notifies CMS of its primary payment responsibility, as the assumption is that the AP’s responsibility is not in dispute.
How did the first year go? Have we seen any improvements? Have there been any issues or problems? Where are we today? What is the anticipated future of the program? Anything in the works that NGHPs should be aware of or ready for?
CMS Announces Transition from BCRC to CRC on July 1, 2015
On July 1, 2015, CMS published its first announcement about the transition of NGHP recovery workload from the BCRC to the CRC. The announcement indicated that “as part of the continuing efforts to improve the Coordination of Benefits & Recovery program and claims payment accuracy in Medicare Secondary Payer situations, the Centers for Medicare & Medicaid Services will be transitioning a portion of the Non-Group Health Plan recovery workload from the Benefits Coordination & Recovery Center to its Commercial Repayment Center.” The announcement made it clear that the transition only included those cases where CMS is pursuing recovery from the liability insurer, no-fault insurer or WC entity directly. In other words, Medicare beneficiaries and their attorneys would continue to work with the BCRC where CMS is pursuing recovery from the beneficiary.
CMS Holds Webinar on Role of CRC on August 25, 2015
On July 29, 2015, CMS announced that on Tuesday, August 25, 2015, it would hold a webinar on the new role of the CRC in the NGHP conditional payment recovery process. The purpose of the webinar was to specifically outline the process the CRC would use to recover conditional payments directly from APs. In other words, CMS outlined that the CRC will identify and validate recoverable conditional payments, issue conditional payment notices (CPNs) and demand letters, respond to disputes and appeals, receive payments and resolve outstanding debts, and refer delinquents debts to the Department of Treasury (DOT) for further collection actions.”
CMS also indicated that the BCRC will continue to maintain responsibility for “all data collection activity, including Mandatory Insurer Reporting (MIR) information. It will also continue to pursue recovery from the beneficiary directly and continue to seek recovery on cases that initiated prior to October 5, 2015 where an applicable plan (AP) is the identified debtor. Therefore, the BCRC will continue to provide conditional payment letters (CPLs) when a beneficiary self reports that a NGHP has primary payment responsibility for an illness, incident, or injury where Medicare has made a conditional payment. Such CPLs will include conditional payments on a Payment Summary Form (PSF), will explain how to dispute payments made by Medicare, and will advise the AP how to move the recovery to final demand.”
In contrast, CMS also informed that “the CRC will be the one issuing CPNs when an NGHP entity indicates through MIR that it has ORM. The CPN will include conditional payment information on a Statement of Reimbursement (SOR) with items or services paid by Medicare it seeks to recover, will explain how to dispute any item or service included in the SOR, and will advise insurers and entities what further actions need to be taken.” During the webinar, CMS made it clear that “both CPLs and CPNs are not requests for payment. They are information provided to the NGHP entity for an opportunity to ensure an accurate listing of conditional payments. Therefore, if an AP believes a medical claim should be removed from the CPL or CPN, a dispute may be filed with proper documentation to challenge such payment. A major difference between CPLs and CPNs however is that although there is no time limitation when responding to a CPL, the NGHP entity must file the dispute within 30 days of the CPN date.”
CMS made it clear that if the CRC sends a NGHP entity a CPN seeking reimbursement for conditional payments Medicare believes to be related to the accident, incident, or injury, the AP has 30 days from the date of the CPN to respond or dispute such payments. “The AP may file a dispute by contacting the CRC in writing or through the Medicare Secondary Payer Recovery Portal (MSPRP). Disputes submitted to the CRC via the portal may only be submitted on the basis of relatedness and in response to a CPN; all other disputes must be submitted in writing.”
During the August 25, 2015 webinar, CMS also clarified that upon filing a dispute, the CRC will review and evaluate the dispute. The CRC has the authority to remove any medical claim from the SOR if the CRC agrees with the NGHP entity that such payment is not related to the claim at hand, or to the condition related to the claim at hand. “Any medical claim that remains in the SOR will then be included in the demand letter (DL). Any new medical claim that may have been received during the dispute and review process will also be added to the recovery amount and included in the DL.”
CMS also indicated during the webinar that if no dispute is received following a CPN, or if after dispute, the SOR contains one or more medical claims Medicare believes to be due, the CRC will issue a DL to the AP. The DL will include “basic information regarding the case, an updated SOR with a final listing of the items or services Medicare expects reimbursed, and an explanation of how to appeal any items and or services the NGHP entity believes should be removed from the SOR.”
CMS Holds Second Webinar on CRC Process on September 17, 2015
As a result of technical difficulties throughout their August 25, 2015 presentation and not being able to answer all of the questions, issues, and concerns from those attending, CMS concluded the webinar by indicating it would hold another webinar on September 17, 2015. Therefore, on September 17, 2015, CMS held its second webinar regarding the workload transition to the CRC. As they did during their first webinar, CMS again reminded listeners that the specific workload to be transitioned to the CRC only involves recovery cases where CMS is pursuing recovery from an applicable plan, liability insurance (including self-insurance), no-fault insurance, or a workers’ compensation law or plan, as the identified debtor.
CMS again reiterated that “starting October 5, 2015, the CRC will identify and recover Medicare’s conditional payments for all new recovery cases where CMS pursues recovery directly from an applicable plan as the identified debtor. CMS will pursue recovery directly from an applicable plan as the identified debtor when an applicable plan reports that it has ORM or otherwise notifies CMS of its primary payment responsibility.” As was also previously indicated, “the BCRC will continue to pursue all cases where it has initiated recovery activities prior to October 5, 2015. In addition, the BCRC will continue to recover Medicare’s conditional payments for all cases where the beneficiary is the identified debtor, before and after October 5, 2015. All other current BCRC activities, such as MIR, will remain unchanged.”
During the September 17, 2015 webinar, CMS again reviewed the new CRC recovery process for APs with ORM as the identified debtor. The new CRC conditional payment recovery process is as follows:
“An applicable plan reports that it has primary payment responsibility to the BCRC, including reporting ORM through MMSEA Section 111 reporting, or a beneficiary/beneficiary’s representative reports that an applicable plan may have primary payment responsibility.”
Conditional Payment Notice
“The CRC will identify conditional payments related to the claim made by Medicare. A Conditional Payment Notice will then be issued to the applicable plan.” CMS made it clear during the webinar that “if the applicable plan’s primary payment responsibility does not terminate and the CRC identifies additional conditional payments, further CPNs (and demand letters) may be issued for these additional conditional payments.”
“Applicable plans will have one opportunity to dispute medical claims identified on the CPN before a formal request for repayment, or demand, is issued. APs will have 30 days from the date of the CPN to dispute whether the payments included in the CPN are related to the claim. If the AP does not respond within 30 days, CRC will assume such charges are related to the claim and forward a demand letter.”
“If one or more conditional payments remain following the dispute response period, a demand letter, or initial determination, is issued. This is the CRC’s first request for payment.” The AP will have 60 days within which to make payment without being charged any interest. Payments made after such 60 days will be charged interest from the date of the demand letter.
“Applicable plans may appeal the amount or existence of the debt, in part or in full.” Applicable plans have an opportunity to initiate the formal appeal process by requesting redetermination. Formal appeals process available thereafter also includes a request for reconsideration, request for a hearing, request for review, and federal court action.
Failure to Respond
Interest accrues from the date of the demand letter and is assessed if the debt is not resolved within 60 days. “If the debt continues to be unresolved, the CRC will issue an Intent to Refer (ITR) letter informing the applicable plan of next steps should the debt remain unpaid, including referral to the Department of Treasury (DOT) for collections.”
Referral to Treasury
“If any portion of the debt remains delinquent more than 180 days from the date of the demand letter, the CRC will initiate the process to refer the debt to the Department of the Treasury for additional collection activities.”
During this webinar, CMS reminded listeners that “all recovery correspondence will be mailed to the address provided for the applicable plan. As a result, it is the responsibility of the applicable plan to provide accurate recovery address information through the MIR process. If the applicable plan wishes to have another individual or entity involved with post-demand correspondence (including filing an appeal) to resolve the matter on the plan’s behalf, the CRC must have a written authorization on file.” Therefore, “once the demand is issued, recovery agents will need to submit written authorization to continue working with the CRC. An applicable plan must submit a separate authorization for each CRC Recovery ID # to ensure recovery agents are included on correspondence post-demand.”
CRC Begins Processing ORM Claims on October 5, 2015
And just like that, overnight it seemed, as it did with MSAs in 2001, Medicare once again transformed the workers compensation and no-fault claims world, by again creating potential liability on every open compensable workers compensation or no-fault claim. Overnight, workers compensation and no-fault primary payers went from not having to worry about cases where because of statutory provisions that prevented parties from settling future medical care related to the workers compensation or no-fault claim, medical care related to such work comp or no-fault claims may have been kept open for years, sometimes decades, to knowing CMS will soon start sending notices asking for several hundred to several thousand dollars for reimbursement of conditional payments made by Medicare throughout the life of such workers compensation or no-fault claims. The immediate monetary impact on any open ORM claim could be huge. The potential long term financial effect of such changes could be even bigger.
As I wrote and spoke about at several conferences during this time period, for claims, risk, and legal professionals who are responsible for planning for such financial and claims handling details, I recommended not waiting to start receiving these notices from CRC to act. I strongly urged workers compensation and no-fault professionals to begin their file review early in the claims process, identify open medical cases with Medicare beneficiaries as early as possible, review mandatory insurer information reportable data with urgency, verify ICD-9 and ICD-10 codes reported through mandatory reporting process match those reported by the AP as related to the workers compensation or no-fault claim, inquire from CMS as to any conditional payments made right away, and hire staff or engage a service provider who has experience with mandatory insurer reporting and resolution of conditional payments as soon as possible. As many of you heard me say at various seminars and conferences throughout the country, my recommendation was to get a jump on this, to manage it, to control it, or else it would create havoc on your bottom line, it would take over your books, it would end up controlling your organization’s claims staff and your organization’s financial stability for several years to come.
CRC Lack of Responsiveness Reported on February 9, 2016
As the CRC assumed responsibility for the recovery of conditional payments where CMS is pursuing recovery directly from a liability insurer (including a self-insured entity), no-fault insurer or workers’ compensation entity as the identified debtor, NGHPs began to notice a considerable slow down, almost complete silence from CRC, with very few CPNs. In response to such industry wide concerns, on February 9, 2016, the CRC announced it had “issued more than 33,000 CPNs since the transition.” CMS further indicated that it “was aware that many insurers and WC entities were concerned and awaiting CPNs, or demand letters.” As a result, CMS stated that it “was actively engaged with the CRC to improve responsiveness to requests for conditional payment information and the handling of correspondence.” https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview/Whats-New/Whats-New.html
Over the next several months, workers compensation and no-fault claims professionals discovered what they had been fearing all along, that CGI, the federal contractor hired by CMS to do the CRC day to day work required to administer such ORM claims, had no experience in NGHP work, let alone an understanding of workers compensation and no-fault claims, process, structure, policies, coverage, benefits, settlement, exhaustion, limits, timing, state laws and requirements affecting reimbursement of conditional payments. As the months went by, it also became evident that there was no internal system or process at CGI to handle all of the various components of conditional payment resolution in situations where an AP had accepted ORM. Individuals at CGI answering questions from NGHP entities would often indicate they had not been trained in the specific workers compensation or no-fault issue at hand. This has resulted in NGHP entities receiving inaccurate and inconsistent answers and information, thereby extending, by several months, the resolution of such issues.
CMS Town Hall Meeting on CRC Progress on November 17, 2016
The CRC process was front and center at the November 17, 2016 CMS Town Hall telephone conference. After CMS updated listeners on the Medicare Secondary Payer Recovery Portal (MSPRP) and Social Security Number Removal Initiative (SSNRI), the CRC had the opportunity to present on lessons learned over the last year. Although it was clear that the process has improved regarding group looping, and accuracy of the conditional payments, the backlog remains an issue. Although the CRC shared timeframes within which each step of the process is currently worked, the reality is that cases are taking longer and longer at the CRC. Because CRC prefers to deal with cases referred to them through the MIR process, they generally will close the duplicate self referred cases, or cases called in by the beneficiary, his or her attorney, the AP, or AP’s agent. When closing the duplicate self referred case, the CRC will not transfer any of the items that the parties may have sent in over to the remaining open case. This requires parties to resubmit authorization forms, medical records, legal pleadings, settlement documentation, and policy exhaustion proof. Sometimes, more than once. Inevitable, this most definitely slows down the CRC process.
Another significant problem which was mentioned but not appropriately addressed during the Town Hall meeting is the lack of a process to handle timely responses from APs or their agents. During the teleconference, the CRC acknowledged that even when an AP or AP’s agent timely responds to the request for payment within the 30 days of the date of the CPN, the CRC continues to process the case as if no response was ever received, thereby ultimately leading to the CRC issuing an ITR letter. This is unacceptable. By now the CRC should have developed a process which when a timely response is received by the CRC, it acknowledges such a timely response and does away with the ITR letter. Despite the AP responding timely and acting appropriately, receiving an ITR letter creates the need to call the CRC, correspond with the CRC, provide copies of previously provided responses to the CRC- all of this creating unnecessary work, diminishing CRC’s credibility, and significantly slowing down the resolution process.
Last, but incredibly important to APs and their agents, is the lack of any consistent closure process. Although during the November 17, 2016 Town Hall teleconference, the CRC indicated that it is sending out closure letters specific to the items immediately sought and reimbursed while ORM remains in place, the CRC has completely overlooked the creation of a closure process for no-fault cases in which policy limits have been exhausted or further claims may be time barred. Creating such a process must be a priority for the CRC, as waiting for months without any closure creates further confusion, costs, and an incomplete resolution process.
On October 5, 2016, we celebrated a year since the CMS transitioned a portion of the NGHP recovery workload from the BCRC to the CRC. Because of volume, the ongoing nature of ORM, and the potential for MIR mistakes with ORM and ICD codes, most expected for the CRC to experience difficulty early on with the recovery of conditional payments where CMS is pursuing recovery directly from a liability insurer (including a self-insured entity), no-fault insurer or workers’ compensation entity, as the identified debtor. However, a year into it, most also expected for the CRC process to be better developed, for customer service representatives to be better informed, for communication channels to have been more clear and transparent, for the transfer of data and documents to be easier and smoother, for the conditional payment summaries to be more accurate, for the dispute process to be more consistent and faster, and for resolution to bring closure.
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About Rafael Gonzalez
Rafael Gonzalez, Esq. is President of Flagship Services Group, the only national Medicare Secondary Payer services provider focusing on and offering comprehensive mandatory reporting, conditional payments, and set aside allocation compliance services to the property and casualty insurance industry. He has been a part of the insurance, medical, and disability industries since 1983. He has served as a thought leader on all aspects of liability, workers compensation, social security, Medicare, and Medicaid compliance since 1990. He speaks and writes on mandatory insurer reporting, conditional payment resolution, set aside allocations, CMS approval, and MSA and SNT professional administration, as well as the interplay and effect of these processes and systems and the Affordable Care Act throughout the country. Rafael blogs on these topics at Medicare Compliance for P&C Insurers at http://www.flagshipservicesgroup.com/blog. He can be reached at firstname.lastname@example.org or 813.967.7598.