Medicare Compliance 101 - Terms You Need to Know

Posted by Brian Cox on Feb 22, 2016 10:00:00 AM

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Sometimes, it can feel like Medicare is speaking a foreign language full of three-and four-letter acronyms that can add to the already complicated compliance process. As your trusted partner, providing the most up-to-date Medicare resources, below you will find a list of succinct definitions for important acronyms to help you navigate the evolving compliance process.

People and Departments Involved

  • CMS - Centers for Medicare and Medicaid Services: The US federal agency which administers Medicare and Medicaid and the State Children’s Health Insurance Program (SCHIP) within the US Department of Health and Human Services. They are the main source of most announcements, town hall meetings, and other public contact from Medicare.
  • BCRC - Benefit Coordination and Recovery Contractor: An organization contracted by Medicare to coordinate the collection, management, and reporting of other insurance coverages, including no-fault liability and workers’ compensation insurance for beneficiaries. They are also responsible for the recovery of NonGroup Health Plan (NGHP) related mistaken payments where the insurer or beneficiary must repay Medicare according to Medicare’s secondary payer regulations. (As of October 2015, some of that recovery responsibility shifted to the new CRC.)
  • CRC - Commercial Repayment Center: The contractor that focuses solely on recovery efforts in cases where the insurer is the debtor, typically no-fault and worker’s compensation claims. The CRC operates with some key differences from the BCRC which insurers must understand to avoid significant financial risk.
  • RRE - Responsible Reporting Entity: An “applicable plan” which includes liability insurance (including self-insurance), no fault insurance and workers compensation plans responsible for paying medical bills on behalf of a Medicare beneficiary (such as P&C insurer settling a personal injury claim). These organizations must report under Section 111 so that Medicare can determine if any conditional payments have been made that will need to be reimbursed by the RRE.
  • TPA - Third Party Administrator: An organization not directly involved in a Medicare compliance case as debtor, claimant, or RRE, but who has been given permission to act on behalf of one of those parties in researching and/or resolving the claim with Medicare. (Flagship Services Group can serve as a TPA for all stages of Medicare Compliance.)
  • DRA - Designated Recovery Agent: The DRA is an entity that is authorized by an insurance company to work directly with Medicare on their behalf to investigate, research, process and file disputes for no-fault, liability and workers’ compensation claims involving Medicare beneficiaries. (Flagship Services Group can serve as ARA for P&C insurance companies.)

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Documentation You May Receive from Medicare

  • CPL - Conditional Payment Letter: A letter from Medicare providing information on items or services that Medicare has paid conditionally and have identified as being related to the pending claim. It is NOT a bill, and does not require a response, but the total conditional payment amount is considered interim as Medicare may make additional payments while the claim is pending.
  • CPN - Conditional Payment Notice: A letter from Medicare containing similar information as the CPL, but that requires a response and/or challenge of Medicare’s determination within 30 days. In the case of CPNs produced by the CRC, if no response is received within 30 days, the CPN automatically becomes a Final Demand Letter. Once again, it is NOT a bill.
  • FDL - Final Demand Letter: A letter from Medicare containing a compiled list of all charges for which Medicare is demanding reimbursement from the debtor. This letter IS a bill and must be paid within 60 days of the date of the letter. Interest charges will accrue if payment is not received in the allotted timeframe.
  • CCL - Case Closure Letter: A letter from Medicare that formally confirms that all charges involved with the claim have either been satisfactorily recovered or are no longer considered part of the claim.

Other Terms You Need to Know

  • MMSEA - Medicare, Medicaid, and SCHIP Extension Act of 2007: A law that - among other provisions - regulates the reporting requirements of RREs in regards to MSP-related claims. The reporting requirements are often referred to by the section heading of the applicable portion of this law: Section 111.
  • MRR - Medicare Risk Review: A comprehensive analysis of your current claims processing system and related procedures to determine to what extent your organization may be exposed to the penalties and problems related to Medicare non-compliance. (This is a service Flagship Services Group routinely provides.)
  • LOA - Letter of Authority: A letter from an insurance company designating a TPA (such as Flagship Services Group) to serve as an agent on their behalf when working with the CRC.
  • POR - Proof of Representation: Documentation from the debtor, whether it is the insurance company or the beneficiary, giving a TPA with the authorization to investigate, discuss, and dispute a claim with Medicare on their behalf.
  • MSA - Medicare Set-Aside Arrangement: A process by which an account is set up on behalf of a Medicare beneficiary and funded by a primary payer (such as a P&C insurance company) to cover reasonably anticipated future medical bills related to the claim being processed. The amount funding the MSA becomes part of the settlement amount and is reported to Medicare for their future reference should further conditional payments arise.

There’s far more to understanding Medicare compliance than getting a handle on these terms. Allow this compilation to provide a solid foundation of information to support your understanding of the Medicare compliance world.

To learn how Flagship Services Group protects your financial assets and mitigates risk by keeping you Medicare compliant, contact us today.

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Topics: Compliance