How To Avoid Medicare Payment Problems After The WC Settlement Is Closed
James E. Pocius, Ross A. Carrozza
Recently, we attended the National Alliance of Medicare Set-Aside Professionals. At the seminar, officials from CMS attended and discussed several outstanding issues. They included proposed rule-making, problems with the BCRC, such as duplicate cases and extensive delays. The Medicare officials essentially refused to comment on most of these issues and, thus, future policies are still expected. However, another problem raised its ugly head. This problem includes multiple cases opened with the BCRC and the CRC on the same case. These cases, according to CMS officials, arise when a workers' compensation case is denied and then later is settled. Often, a TPA, self-insured or insurance carrier, will be considering resolution of a denied claim and will contact the CRC about the Medicare beneficiary for conditional payment information. When the conditional payment information is received, the carrier, TPA or self-insured then contests the payments on the basis of a denied claim. This action opens a CRC claim and, if the CRC upholds the denial, a zero payment letter could be issued. That case is then closed at the CRC. However, the case is not closed on the Medicare reporting run, or should not be closed on the Medicare reporting run because a settlement is being considered.
When the case is resolved with the settlement or payment of any kind, over the threshold of $750.00, the settlement is reported and is listed on the reporting run. When that occurs, the BCRC opens a file with the same billing that was originally contained in the CRC case that seeks reimbursement of any outstanding work-relate funds from the Claimant. It is an entirely separate demand from the CRC. The CRC demands the money from the Claimant because, in the Medicare records, this case was shown as a denied claim. However, the claim was not denied because it was later resolved.
These cases have resulted in settlements being reopened because of the demand letter from the BCRC to the Claimant. In Pennsylvania, an argument could be made that the Claimant was not fully informed, regarding his compromise and release since the Claimant was unaware that he or she would receive a demand from Medicare after the settlement occurred.
This results in increased litigation and a potentially bad faith argument against the employer in some states.
With this background, and with the Agency's inability to resolve this problem, we are recommending a proactive policy in these instances. We would suggest the following steps to successful resolution:
Determine if the injured worker is a Medicare beneficiary.
If settling a denied claim, with a Medicare beneficiary, make sure that the self-insured, the TPA, or the insurance carrier has not contested the conditional payment on the basis of the initial denial.
Determine if a conditional payment is made, which was related to the work injury.
Include, as a term of payment, the amount to be paid to Medicare, if any, as part of the settlement.
If these steps are followed, these post-litigation and settlement problems should be avoided.
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