On Tuesday, August 23rd, 2015 CMS held a webinar further explaining the new policies and procedures for conditional payment recovery through the Commercial Repayment Center (CRC) and the Benefits Coordination and Recovery Center (BCRC). On July 1, 2015, CMS first announced that it would be transitioning a portion of the NGHP recovery workload from the Benefits Coordination & Recovery Center (BCRC) to the CRC. CMS explained that the transition was part of a continuing effort to improve the conditional payment recovery and its accuracy in Medicare Secondary Payer (MSP) situations.
Effective October 5, 2015, the CRC assumes responsibility for the recovery of conditional payments when CMS pursues recovery directly from a liability insurer (including a self-insured entity), no-fault insurer or workers’ compensation (WC) entity (Applicable Plan) as the identified debtor. In situations where the identified debtor is the beneficiary, the BCRC will continue to be responsible for those cases.
As indicated in the July announcement, Section 111 of the Medicare, Medicaid and SCHIP Extension Act (MMSEA) reporting and the broader requirements of the Medicare Secondary Payer will trigger CMS recovery action. The MSP Act, in 42 U.S.C. 1395y(b) and 42 C.F.R. Part 411, preclude Medicare from paying for a beneficiary’s medical expenses when payment “has been made or reasonably can be expected to be made under a workers’ compensation plan, an automobile or liability policy or plan (including a self-insurance plan), or under no-fault insurance.” Accordingly, once payment has been made on behalf of a beneficiary, reimbursement rights ripen.
Until the July announcement, CMS had not sought recovery from any entity until a settlement or judgment had been obtained. However, CMS has now begun recovery action based upon the existence of Ongoing Responsibility for Medical (ORM) that is reported electronically through Section 111 Reporting. In cases where the ORM indicator is populated, CMS will begin recovery either as against a beneficiary or Applicable Plan. As noted, if against an Applicable Plan, the action is instituted by and through the CRC whereas the BCRC will pursue a beneficiary. All cases instituted and pursued by the BCRC prior to October 5, 2015 will remain with the BCRC. The CRC will be responsible for recovery actions against Applicable Plans instituted after that date.
According to CMS, the Section 111 report on a claim will cause the CRC to issue a Conditional Payment Notice (CPN) to the Applicable Plan. The Notice will include a Statement of Reimbursement (SOR) itemizing charges deemed related to the injury. If not disputed within 30 days, a Demand Letter will follow requiring payment by the Applicable Plan. Applicable Plans should be prepared to expect Demand Letters as early as October 25, 2015. Additionally, CMS will assess interest on Demand Letter amounts and will no longer wait 60 days, as had been their previous procedure. No appeal can be made until a Final Demand is received.
As with the previous announcement, CMS reiterated that Applicable Plans may designate a Recovery Agent to address recovery issues. Section 111 allows a Responsible Reporting Entity to designate a Recovery Agent for the recovery process. However, updated authorizations to act on behalf of the Applicable Plan will still be required when the Recovery Agent will be responsible for dealing with the CRC.
Based upon the announcement and the webinar, it appears that CMS has taken an aggressive stance on conditional payment recoveries. Rather than wait for the parties to settle an injury case, CMS will assert its priority rights to recovery. Much like the relatively recent move by CMS to automatically generate conditional payment recovery action based upon the report of a settlement, judgment or award through Section 111, the reporting of the existence of ORM will now generate recovery activity which, presumably, will be automatically generated as well. With the transition from International Classification of Disease (ICD) 9 coding to ICD-10 coding set to occur on October 1, 2015, it is hoped that the more comprehensive and accurate ICD-10 codes will result in less recovery activity if the coding is properly utilized.
The webinar will be replayed again on September 17, 2015 due to some technical difficulties. Applicable Plans would be well served to attend the rebroadcast and provide CMS with any questions or concerns not addressed using the CMS inbox. In the interim, procedures surrounding the reporting of ORM should be reviewed as well as the timeframes for appeal of Final Demands. Of course, the designation of a Recovery Agent and updated authorizations for the Agent are critical as is ensuring a proper methodology for capturing and reporting the correct ICD-10 codes. ECS customers will continue to be updated on operational changes and procedural changes regarding both MMSEA reporting and Conditional Payment recovery.