For several years now, the Centers for Medicare and Medicaid Services (CMS) has been ramping up its efforts to recoup as much money as possible from organizations that have primary responsibility for payment of medical claims. This includes pursuing amounts expended for treatment by Medicare in relation to workers’ compensation claims.

Conditional Payment Notice (CPN)

In an effort to collect monies from insurers and/or employers, CMS will send out a Conditional Payment Notice (CPN) advising the Responsible Reporting Entity (RRE) that Medicare has identified a claim or a number of claims for which the RRE has primary payment responsibility and for which Medicare has made conditional payments. Included with the correspondence will be a “Statement of Reimbursement” that lists the billing information for the treatment upon which CMS contends conditional payments were made by Medicare. This is the amount that CMS contends the RRE must reimburse to Medicare.

Upon receipt of a CPN letter, the RRE (or whoever it designates to respond to the letter) should respond to CMS with information acknowledging and/or disputing the amounts listed in the CPN letter. If any of the listed services are not related to treatment that the beneficiary received in relation to a workers’ compensation or liability claim, then the RRE must submit a written explanation to CMS along with a description of the injury and any supporting documentation within 30 days of the date of the letter from CMS.

Demand Letter

After the 30 day period expires, CMS will eventually issue a Demand Letter to the RRE. The Demand Letter will include an updated “Statement of Reimbursement.” If your organization submitted a dispute in response to the CPN, the “Statement of Reimbursement” should identify the charges that were disputed, and the outcome of each dispute as determined by CMS. At that time, your organization will have approximately 60 days to pay the amount requested in the letter. If you still believe that some amounts are not properly owed by your organization to Medicare, then you can remit payment on the amounts you are not disputing along with documentation explaining why you are submitting a payment for less than the entire amount.

With regard to amounts that your organization contends are still disputed, you may file an appeal with CMS. Your organization has 120 days from its receipt of the Demand Letter to file an appeal. CMS assumes your organization receives its Demand Letter within 5 days of the date of the Letter.

Thereafter, CMS will rule on the appeal. If it issues a decision that is not favorable to your organization, then the letter containing the decision will provide further appeal instructions.

The appeal should be in the form of a letter in which you explain why the amount or existence of the debt is incorrect. You should also include supporting documentation, if applicable. Medicare will suspend any additional recovery efforts while an appeal is pending; however, interest on any outstanding balance will continue to accrue from the date of the Demand Letter. At present, the interest rate CMS is using is 10.125%.

IMPORTANT TIP: If your organization has an agent (such as your MSP Recovery Agent) filing the appeal, you must provide CMS with a “Letter of Authority” authorizing the agent to act on your behalf in filing the appeal. If your agent files an appeal without a proper “Letter of Authority” on file with CMS, then CMS will dismiss the appeal and potentially treat it as though your organization never filed an appeal.

Letter of Intent to Refer the Debt to the Department of Treasury

If your organization did not pay the amount owed that is listed in the Demand Letter and did not file an appeal as to any of the amounts owed, then the next step in CMS’s enforcement process is for it to issue a Notice of Intent to refer the debt to the Department of Treasury for collection efforts. At this stage, your organization can present evidence that all or part of the debt is not past due or legally enforceable. Your organization will have 60 days from the date of the Letter of Intent to submit such evidence. Failure to present any evidence will result in the automatic referral of the debt to the Department of Treasury.

Once the debt is referred to the Department of Treasury, you may lose any ability to appeal the debt or to challenge any of the amounts CMS claims are owed.

The key takeaway from all of this is to take the CPNs seriously and make sure that your organization, your MSA Recovery Agent, and/or your TPA (if you have one) immediately reviews the “Statement of Reimbursement” that is provided, determines any amounts that are not related to the claim, and submits the appropriate letter of dispute or appeal at every step of the process. If certain amounts are not in dispute, then consider paying those amounts as soon as possible to cut off the accrual of interest on those amounts.

For further information or questions, contact Mike Pott, EIA Chief Claims Officer.