What are conditional payments?  How and when should payers respond to Conditional Payment Letters, Notices and Demands? What happens if you don’t? Our Chief Compliance Officer Dan Anders and Director of MSP Compliance Services Ada Lopez covered these topics and much more in our February 7 webinar.  Here’s a quick recap.

How does Medicare know who the primary payer is … or that a case has settled?

The Medicare Secondary Payer Act was written to protect the Medicare Trust Fund. And the Centers for Medicare and Medicaid Services developed Coordination of Benefits (COB) rules and processes to keep Medicare from paying for treatment that is covered by a primary payer (workers’ compensation, liability, no-fault). If Medicare has made a payment for which a primary payer exists, then such a payment is considered conditional, meaning it is conditioned upon reimbursement to the Medicare Trust Fund.

Most commonly, CMS learns that a primary payer for a Medicare beneficiary’s claim exists through these Section 111 reporting triggers:

• Acceptance of Ongoing Responsibility for Medical (ORM), usually in a WC or no-fault claim
• Total Payment Obligation to Claimant (TPOC), typically a settlement

Timeliness and accuracy are keys to protecting the payers who are the Responsible Reporting Entities (RREs)

• ORM and TPOC should be reported via Section 111 every quarter.
• As of Oct. 11, 2024, RREs will be subject to penalties if ORM or TPOC are reported more than 365 days late. (Link to Penalty blog)
• Report valid ICD-10 codes:
  • For ORM, report only diagnosis codes that are accepted on the claim.
  • For TPOC, only report diagnosis codes that are released as part of the settlement.
  • Be careful to report only codes that apply to the claim. (Medical bills and records often contain non-claim-related ICD-10 codes.)

Conditional payment recovery

The webinar took a deep dive into the processes and communications the Benefits Coordination & Recovery Center (BCRC) and Commercial Repayment Center (CRC) deploy to obtain reimbursements. Dan and Ada also discussed ways to dispute conditional payment notices and demands.  It’s worth requesting a recording of the session from Dan (daniel.anders@towermsa.com) just to get this information.

Some best practices for conditional payments

• Make sure claims are accurately and timely reported for ORM and TPOC.
• Update ICD-10 codes when additional body parts are accepted or denied or they need correction.
• Terminate ORM when appropriate, e.g., settlement.
• Identify your Medicare-eligible claimants.
• Immediately review and act on conditional payment correspondence and meet the deadlines!
• Make sure settlement terms specify who is responsible for conditional payments post-settlement.
• When a Demand is received, either pay or appeal. Pay attention to Conditional Payment Letters (CPLs) and Conditional Payment Notices (CPNs) and take action on them, but do not pay before the Demand.
• Be sure to respond to the Demand on time. Otherwise, the debt will eventually be transferred to the U.S. Treasury.
• Follow-up with the CRC or BCRC to ensure payment was received and applied to the debt and that no debt remains.

If you don’t work with conditional payments on a daily basis, consider partnering with Tower for conditional payment identification, resolutions and appeals. And, if you have any questions about conditional payments, even on specific claims, or any other MSP compliance issues, Dan Anders is happy to answer them.  Email daniel.anders@towermsa.com.

Also, let us know what areas of MSP compliance you would like us to cover in future Premier Webinars. We want to help you.