In the world of Medicare compliance for Property & Casualty insurers, it is difficult, but critical, to know where you are on the compliance spectrum. Non-compliance can have serious consequences that range from financial penalties to unwelcome publicity.
The three “Ms” of Medicare non-compliance are “Myths”, “Misunderstandings” and “Mistakes." Many seem reasonable, sound believable, appear to be factual and often reinforce each other. However, Medicare regulations are based on complex government legislation that changes frequently. That is what makes the myths and misunderstandings believable. Most non-compliance is unintentional, but that response is generally inadequate when faced with financial penalties, a media story about to become a headline, or a job loss.This article spotlights the most common Medicare compliance myths or misunderstandings along with the facts and “Self-Test” questions to assist in sorting fact from fiction, and thereby avoid the potential negative consequences of non-compliance.
“We have a very low risk of Medicare non-compliance because our claims inventory includes very few claimants who are Medicare beneficiaries.”
Medicare’s published statistics show that 16% of the U.S. population receives Medicare benefits. If your company receives a statistically valid number of personal injury claims, your percentage of claims with a Medicare beneficiary claimant should be in the range of 12% - 16%. If your claims inventory has significantly less than that percentage range you most likely have a gap in the process used to identify Medicare eligible claimants.
Self-Test Question #1
What percentage of our open personal injury claims have an identified Medicare beneficiary as a claimant?
12% - 16%
“A very small percentage of our Medicare beneficiary claims have a Conditional Payment lien, so our risk exposure has to be minimal.”
An analysis of several thousand Medicare beneficiary personal injury claims shows that if fewer than 50% of your Medicare claimants have a Conditional Payment lien, there is likely an issue with either 1) your Medicare claims notification process to Medicare, or 2) your obligation to request a Conditional Payment Letter for Medicare claimants, that will confirm a lien exists and provide an amount. Many insurers are not aware that they must request an initial Conditional Payment Letter (CPL) from Medicare in order to discover the existence of, and/or the initial amount of, a Conditional Payment lien. The insurer has the obligation to make the request; Medicare has no obligation, nor intention, to provide CPLs to insurers without a formal request.
Self-Test Question #2
What percentage of our Medicare beneficiary claims have a Conditional Payment lien?
“Whenever a Medicare beneficiary claimant is represented by an attorney we transfer responsibility for resolving Conditional Payment liens to claimant’s attorney via indemnification language in Settlement.
Flagship does not endorse this practice for the following reasons:
- It assumes attorney has Medicare expertise. We find that assumption flawed and risky. Most are not well versed or current in Medicare compliance regulations. Some never initiate the process; many do not complete it, leaving insurer exposed.
- It assumes attorney will protect your financial interest, when in fact your financial interests are adverse. First priorities for attorney are client and law firm.
- Medicare is not bound by the terms of your settlement. Under federal law each party – claimant, attorney, insurer – can be held liable for repayment of entire Conditional Payment demand. Party with deepest pockets will be Medicare’s first target.
- It becomes difficult for insurer to know what percentage of their Medicare claims require reimbursement because insurer relys on attorney to resolve all liens. Insurer exposure risk becomes an unknown.
Self-Test Question #3
What percentage of our Medicare claims have Case Closure Letters?
“Our average Conditional Payment lien is small and is covered in our reserves. Simply paying most liens avoids settlement delays, frustrations at the adjusters desk and unnecessary negotiations with Medicare. The cost of rebuttals and Medicare negotiations is generally higher than the savings.
This is generally true when Conditional Payment liens are managed internally. However, annual Medicare reimbursement costs can generally be reduced 50%-60%, for a significant net savings, when a 3rd party that is exclusively dedicated to insurer cost savings when dealing with Medicare compliance issues professional Medicare compliance firm manages all Conditional Payments.
Self-Test Question #4
How much could we save if we outsourced the management of all Medicare claims to Flagship Medicare Compliance Professionals?
A lot! It saves substantial money, eliminates non-compliance penalty risks, saves significant time, removes frustrations, increases processing efficiency for non-Medicare claims and accelerates file closure timing.