The Storm is Brewing: Major Changes to Conditional Payment Recovery

Posted by Brian Cox on Aug 27, 2015 3:08:34 PM

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flagship_hp_imgIf you’re safe and secure in a sheltered valley, hearing the first rumbles of thunder may not elicit much of a reaction. But if you’re on a boat in the middle of the ocean, those rumblings will get your attention immediately.
 
 

If you’re responsible for processing claims or overseeing their processing in the P&C insurance industry, you’re out in the middle of the ocean.

Consider this the first rumble of thunder:

The Centers for Medicare & Medicaid Services (CMS) presented a webinar Tuesday, August 25th, outlining the upcoming changes and transition of certain recovery-based activities to the Commercial Repayment Center (CRC). (Previously, this same entity was referred to as Recovery Audit Contractors, or RAC.)

The plan to transition conditional payment recovery against insurers and self-insured from the Benefits Coordination and Recovery Center (BCRC) to the CRC will begin on October 5th. 

That’s just 39 days from now.

Changes to the Status Quo

Unlike the BCRC, the CRC will specifically pursue recovery from debtors in situations involving ongoing responsibility for medicals (ORM). Typically, these debtors are the insurers in Workers’ Compensation and No-Fault claims.

In a major change to current process, on October 5th, the CRC will begin recovery work against insurers prior to closure or termination of ORM.

How are these changes going to affect you?

  • Now, ORM is frequently reported in no-fault and workers’ compensation cases where no expectation of settlement exists. The CRC now has the ability to pursue recovery much more aggressively and in more situations.

  • Until now, conditional payment recoveries were traditionally made at the time of settlement. After the change, the CRC will now recover from the moment a primary payment is made on claims with ORM meaning a much tighter time frame between reporting and recovery.

Other Details You Need to Know

  • A Conditional Payment Notice (CPN) may be issued upon notification of assumption of ORM. Again, this is not at the time of settlement, but at the time of Section 111 reporting.

  • The debtor will have 30 days to dispute or accept Medicare’s conditional payments. Please note the insurer is considered the debtor in Workers’ Compensation and No-Fault situations.  As the debtor, they will turn to you for repayment.

  • If no dispute has been submitted in the 30 day timeframe, the CPN automatically converts to a Final Demand letter (FDL). This used to be a drawn-out process that could take months. Now, the onus is on you to either dispute the CPN or arrange to reimburse based on the FDL, all within a few weeks.

  • Claims that have already been reported via Section 111 AND to the BCRC for recovery will continue to follow the usual process. This is good news, but may make the process a little more confusing for your claims adjusters as they try to work with two different entities.

  • Claims that have only been reported via Section 111 and have not been reported to the BCRC for recovery will be handled by the CRC. This could result in unpleasant and unanticipated demands.

Gina Cox, Flagship’s VP of Operations said, “The bottom line is that the CRC will now have the ability to pursue recovery far more aggressively than they have in the past, and you – the P&C insurance carrier – could be exposed and unprotected.”

Flagship can help you navigate these tricky waters

  • We have experience and are equipped to work with both the BCRC and the CRC.

  • We already have a proven process to manage CPNs and dispute unrelated charges.

  • We are prepared to help our clients comply with these changes and meet the 30 day deadlines.

Stay tuned to the Flagship Services Group blog for more information as it comes to light. Like a world-class meteorologist, Flagship has been predicting this impending storm for months. We have the tools, resources, knowledge, and experience to guide you to safe waters.

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Topics: Compliance, RAC, CRC