No doubt you're aware that processing Medicare Conditional Payments for personal injury claims is no simple task. In fact, processing conditional payments is rather complicated. Here are just a few reasons why:
- There are more than 50 separate tasks involved in processing a Medicare Conditional Payment
- The process changes dramatically depending on the facts and circumstances of the particular claim
- Each task must be completed exactly as Medicare prescribes. If not, Medicare will reject or simply ignore your effort
- You often get conflicting information and requests from different Medicare representatives at Benefits Coordination & Recovery Center (“BCRC”)
Unfortunately, this complexity results in more than just headaches and long days. Real financial risk is a legitimate possibility.
We have performed many different “friendly compliance audits” at P&C insurers around the country. In those audits we have seen the grim consequences of complex Conditional Payment processing, including:
- Claim Adjusters getting a few steps into the Conditional Payment process but stopping at some point due to frustration, confusion, pressure to settle, or other reasons.
- Claims Adjusters passing responsibility to the plaintiff’s counsel, who really doesn't know how to process a conditional payment either. In fact, nearly every claim where responsibility has been passed on to an attorney shows no evidence of Medicare liability closure. Adjusters in these situations typically rely on indemnification language in the settlement agreement, which really does nothing to eliminate Medicare risk.
“Giving up” obviously does nothing to mitigate Medicare risk, and neither does passing the risk to the plaintiff's counsel using indemnification language. Medicare is not prevented from recovering from an insurer just because the insurer has sent the claim to an attorney
So, how do you completely eliminate Medicare risk for P&C carriers dealing with processing a Conditional Payment claim? It all comes down to Case Closure Letters.
The Importance of Case Closure Letters
A Case Closure Letter is Medicare’s “gold seal of approval” in the Conditional Payment recovery process. Receiving one means that you have dotted every “i” and crossed every “t.” With such a letter Medicare is letting you know, in writing, that you have no more obligations to them for a particular claim. A letter documenting case closure, thus, represents the ultimate Medicare compliance audit trail.
To achieve 100% compliance and eliminate Medicare risk, every single personal injury claim involving a Medicare beneficiary must result in a letter from Medicare. If 100 Medicare beneficiaries are identified, and an insurer obtains 100 letters, that company is 100% compliant. Rare exceptions notwithstanding, it's really that simple.
How Are YOU Doing?
With that as the standard for Medicare compliance, how is your company doing? Are you protecting your financial resources and mitigating risk?
If your journey toward 100% compliance needs some direction, why not take our Medicare Compliance Self Test and see where you're doing well, and where you can stand some improvement?