Medicare Compliance – Background
Medicare is a federal health coverage program for U.S. citizens age 65 and older, plus citizens with specific chronic health issues under age 65. The initial Medicare legislation was signed into law in 1965, and currently provides coverage for 15%-20% of the U.S. population. In 1980, new legislation made Medicare the secondary payer to any other personal injury insurance coverage a Medicare beneficiary might have. Additional legislation in 2007 requires P&C insurers to report claims involving Medicare beneficiaries to CMS (Centers for Medicare and Medicaid Services). This obligation helps Medicare identify primary payers with obligations to reimburse them for Conditional Payments.
Medicare has been on a collision course with financial disaster for several years due to:
- An explosive senior population,
- Escalating health care costs,
- Enormous fraud,
- Shrinking funding sources.
To combat these challenges Medicare is utilizing federal legislation, that includes substantial financial penalties for non-compliance, to incentivize providers of P&C insurance to Medicare beneficiaries to:
1) Report claims involving Medicare beneficiaries to CMS;
2) Reimburse Medicare for Conditional Payments made to health care providers on behalf of beneficiaries;
3) Set-aside funding for projected future health care needs attributable to a Medicare covered injury.
Medicare Compliance – Essential, But Time Intensive
Medicare regulations are complex, ever-changing and continuously expanding. Medicare has a federal statutory right of recovery for health care payments made on behalf of Medicare beneficiaries when a private P&C insurance carrier is the primary payer. Adjusters frequently pay Medicare’s Conditional Payment “liens” rather than delay settlement. However, the potential aggregate savings in Medicare reimbursements, through Flagship’s rebuttal process, can be worth millions of dollars.
Medicare Non-Compliance – Expensive
Non-compliance with Medicare regulations can have severe monetary and brand image consequences, as well as boardroom issues. For example, failure of a P&C insurer to report claims involving Medicare beneficiaries carries a potential penalty up to $1,000 per day per claim. Delays or neglect in reimbursing Medicare for Conditional Payments can result in double damages plus accrued interest.
Medicare Non-Compliance – Brand Image Risks
In addition to the financial consequences, negative publicity can seriously tarnish a well-respected brand image. Medicare has a “sacred cow” image to most taxpayers, and the failure of an insurance provider to comply with reimbursement obligations, through either neglect or misunderstanding, can have a significant negative impact on the brand.
Medicare Non-Compliance – A Solution
Outsourcing Medicare claims processing increases the efficiency of the internal claim adjusters in managing the non-Medicare claims that constitute the overwhelming majority of personal injury claims. Additionally, it generally and substantially reduces the reimbursement amounts paid to Medicare. And finally, it provides 100% compliance assurance in an area where the legal regulations are complex and frequently changing. Successfully rebutting Medicare “liens” requires experience, expertise, resources and time. In most instances, it is not economical for insurers to create a dedicated internal Medicare compliance group with medical, legal and claims expertise in Medicare compliance, when Medicare claims usually constitute only 10%-15% of total personal injury claims.
Flagship Services Group – Guarantees
Flagship Services Group is the premier Medicare compliance services provider to P&C insurers, and the only provider with a 100% Medicare Compliance Guarantee to clients. We exclusively focus on Medicare claims, and our medical, legal and claims teams are unmatched in 1) successfully rebutting Medicare “liens,” 2) reducing Conditional Payment reimbursements to the lowest defensible amount and 3) removing the Medicare claims headache from adjusters’ desks.
- Ghostbusters (11/1/2019) - In 1984, Ivy League trained parapsychologists Venkman, Stantz, and Spengler started a ghost-catching business in New York City, despite implausible research, and eventually were welcomed as heroes by saving the city from the paranormal disguised as giant marshmallow man Stay Puft. Only in the movies! But, we can use this ghoulish time of the year to serve as a reminder: Don’t let MSP enforcement claims by Medicare Part C Advantage Plans sneak up to shock and detract your standard claims operating procedures. Identifying and resolving these repayment claims may be just as important a part to your overall MSP compliance strategy as similar claims by traditional Medicare Parts A and B.
- How far is too far when negotiating Medicare release terms? (10/7/2019) - At the recent NAMSAP Educational Conference in Baltimore, during a breakout panel discussion on “Leveraging Settlement with Medicare Set-Asides in Mediation”, a rather strident concern was raised with respect to the reasonable scope of terms in a settlement release irrespective of the type of primary plan covering the loss. Specifically, attendees questioned whether Medicare eligible individuals could or to what extent may release their claim or claims in the future to these public health and welfare insurance benefits while negotiating compromise settlement provisions under liability, no-fault or workers compensation plan.
- Treasury Trove (9/17/2019) - Medicare is paid for through two Trust Fund accounts—Hospital Insurance and Supplementary Medical Insurance—held by the United States Department of Treasury, How Is Medicare Funded. In 2018, over 60 million people were covered by Medicare with over $731 billion in total expenditures from the Trust Funds Facts on Medicare Spending and Financing. Further, CMS reports validating $493.68 million in recoverable mistaken conditional payments, while returning $98.68 million dollars to the Medicare Trust Funds in 2018 as a direct result of its recovery program activities, on top of $131.78 million in 2017, MSPRC Commercial Repayment Center in Fiscal Year 2018. Collection activity by the United States Department of Treasury (DOT) on Medicare conditional payments is reportedly increasing in 2019, plus, over the past 15 months, the United States Department of Justice reached six-figure settlements with two Plaintiff’s law firms for failure to repay Medicare conditional payments.