Medicare is a federal health coverage program for U.S. citizens age 65 and older, plus citizens with specific chronic health issues under age 65. The initial Medicare legislation was signed into law in 1965, and currently provides coverage for 15%-20% of the U.S. population. In 1980, new legislation made Medicare the secondary payer to any other personal injury insurance coverage a Medicare beneficiary might have. Additional legislation in 2007 requires P&C insurers to report claims involving Medicare beneficiaries to CMS (Centers for Medicare and Medicaid Services). This obligation helps Medicare identify primary payers with obligations to reimburse them for Conditional Payments.
To combat these challenges Medicare is utilizing federal legislation, that includes substantial financial penalties for non-compliance, to incentivize providers of P&C insurance to Medicare beneficiaries to:
1) Report claims involving Medicare beneficiaries to CMS;
2) Reimburse Medicare for Conditional Payments made to health care providers on behalf of beneficiaries;
3) Set-aside funding for projected future health care needs attributable to a Medicare covered injury.
Medicare regulations are complex, ever-changing and continuously expanding. Medicare has a federal statutory right of recovery for health care payments made on behalf of Medicare beneficiaries when a private P&C insurance carrier is the primary payer. Adjusters frequently pay Medicare’s Conditional Payment “liens” rather than delay settlement. However, the potential aggregate savings in Medicare reimbursements, through Flagship’s rebuttal process, can be worth millions of dollars.
Non-compliance with Medicare regulations can have severe monetary and brand image consequences, as well as boardroom issues. For example, failure of a P&C insurer to report claims involving Medicare beneficiaries carries a potential penalty up to $1,000 per day per claim. Delays or neglect in reimbursing Medicare for Conditional Payments can result in double damages plus accrued interest.
In addition to the financial consequences, negative publicity can seriously tarnish a well-respected brand image. Medicare has a “sacred cow” image to most taxpayers, and the failure of an insurance provider to comply with reimbursement obligations, through either neglect or misunderstanding, can have a significant negative impact on the brand.
Outsourcing Medicare claims processing increases the efficiency of the internal claim adjusters in managing the non-Medicare claims that constitute the overwhelming majority of personal injury claims. Additionally, it generally and substantially reduces the reimbursement amounts paid to Medicare. And finally, it provides 100% compliance assurance in an area where the legal regulations are complex and frequently changing. Successfully rebutting Medicare “liens” requires experience, expertise, resources and time. In most instances, it is not economical for insurers to create a dedicated internal Medicare compliance group with medical, legal and claims expertise in Medicare compliance, when Medicare claims usually constitute only 10%-15% of total personal injury claims.
Flagship Services Group is the premier Medicare compliance services provider to P&C insurers, and the only provider with a 100% Medicare Compliance Guarantee to clients. We exclusively focus on Medicare claims, and our medical, legal and claims teams are unmatched in 1) successfully rebutting Medicare “liens,” 2) reducing Conditional Payment reimbursements to the lowest defensible amount and 3) removing the Medicare claims headache from adjusters’ desks.