3 Absolute Must-Dos When Attempting Medicare Compliance

Posted by Kendell Gracey on Mar 5, 2015 8:00:00 AM

checklistWe've worked with all sorts of clients over the years: large and small, public and private. One thing we run into over and over again is that these companies simply do not understand the level of risk they are exposed to when it comes to Medicare compliance.

Sometimes we feel like a broken record because we say the same thing over and over, but it's surprising that so many P&C insurance carriers - companies completely built around the concept of understanding, predicting, and capitalizing on risk - overlook compliance and don’t make it a priority, or simply pay whatever Medicare demands just to close the claim in a belief that it is the best way to keep things efficient.

Failing to report and/or properly recover conditional payment claims can result in huge fines that are far more costly than just taking the time to have the claims processed correctly to begin with.Without taking the time to investigate every aspect of Medicare's lien, companies routinely overpay Medicare for line items that are not the insurer's responsibility.

In both cases, a significant amount of money is left on the table. Taking this situation lightly can lead, at best, to unnecessary overpayment to Medicare, and at worst, to tremendous fines. This is why the suite of professional Medicare Compliance services offered by Flagship Services Group is so important from a business perspective.

The following excerpt from our soon-to-be-released white paper, “Distinguishable But Inseparable,” helps break down the basic reporting and recovery rules as they apply to personal injury claims where Medicare is the secondary payer. As you review these three basic steps, think about how much money you may have already wasted, and how much risk you may be exposed to right now:

1. Use CMS System to Report

Every responsible reporting entity (RRE) is assigned a specific 7-day window once each quarter during which Medicare claims must be reported. Proper reporting requires specialized software that interfaces directly with the Centers for Medicare Services (CMS) system, as reporting is not considered adequate via telephone, fax, email or any other method. If an RRE fails to properly report a qualifying claim during that 7-day window, the potential fines can be as high as $1,000 per claim per day.

2. Request a Conditional Payment Letter

After a claim is properly reported via Section 111 requirements, an RRE must request a Conditional Payment Letter (CPL) from Medicare. This letter is not automatically triggered after a claim is reported. It must be a separate request.

The CPL includes a notice of the amount of Medicare's lien related to that claim, which is the first in a long list of steps required to appropriately handle Medicare claim reimbursement recovery.

(NOTE: Among those steps are investigations and negotiations seeking to reduce Medicare's lien to the lowest legitimate amount owed by the RRE.)

3. Pay After Receiving a Final Demand Letter

Medicare sends a final demand letter (FDL) to recover their funds after a settlement is complete. At this point, Primary Payers are required to reimburse Medicare. Failure to appropriately reimburse Medicare for all qualified charges can result in fines equal to double the damages plus interest.

Both the Reporting and Recovery side have their own list of specific requirements, time line, and potential negative consequences for non-compliance, so they are distinguishable. But both sides must be fully satisfied in order to achieve 100% Medicare compliance, so they really are inseparable.

At Flagship, we specialize in helping our clients maintain 100% compliance with Medicare regulations. When all of our recommendations and Medicare's policies are followed by the client, we guarantee you will be 100% compliant with Medicare.

If you're ready to stop avoiding this problem and start saving money, contact us to explore your options.

Photo Credit: Mufidah Kassalias via Flickr

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Topics: Claims Processing