CMS to offer new option for conditional payment information

Michigan workers compensation attorney explains how these changes are long overdue and why they do not go far enough to resolve the current problems.

Everyone agrees that CMS has problems when it comes to providing conditional payment information. The process is slow, often inaccurate, and provides no certainty to stakeholders.

By way of background, CMS will make payments for Medicare covered services related to a work injury even though another party may be responsible for payment under state law. These conditional payments must be paid back if an individual later receives a workers compensation settlement or award.

The major problem with the current conditional payment process is that CMS will not provide a final demand for reimbursement until after the workers compensation case is resolved. This means that plaintiffs and defendants must guess as to the correct lien amount. This makes resolution of the workers compensation case extremely difficult because nobody really knows how much has to be paid back.

While CMS will provide a conditional payment letter before settlement, this amount cannot be relied upon.  In fact, our experience shows that this preliminary amount is frequently wrong because it fails to include all of the relevant charges. Some individuals find themselves in the position of having CMS demand their entire workers compensation settlement after their case is already resolved.

We believe that CMS has a fundamental misunderstanding of the workers compensation system. The vast majority of disputed claims are resolved through settlement. A fair resolution cannot be negotiated without knowing how much Medicare must be paid back. Additionally, it is unfair and impractical to not reduce the amount owed in a disputed case.

A new approach: Self-calculated final conditional payment amounts

Pressure has been on CMS to make changes to its processes. There is currently bipartisan legislation in Washington to fix these problems. In response, CMS has announced a new option that allows for a self-calculated final conditional payment amount in liability cases.

The new self-calculated option will be available starting in February 2012. Only settlements of $25,000.00 or less that involve physical trauma where treatment has been completed will be allowed.

CMS states that:  “Under this option, the beneficiary or his representative will calculate the amount of Medicare’s conditional payment amount using information received from the Medicare Secondary Payer Recovery Contractor (MSPRC), the MyMedicare website, or other claims information available to the beneficiary. The MSPRC will review this amount and, if finding the amount accurate, will respond with Medicare’s final conditional payment amount within 60 days. To secure the final conditional payment amount, the beneficiary must settle within 60 days after the date of Medicare’s response.”

Why these changes do not go far enough

When insurance companies, self-insured employers, and trial lawyers all agree on something, there must be a serious problem. CMS must be required to provide accurate conditional payment information before settlement in all workers compensation cases. No exceptions.

The burden should not be placed on beneficiaries to estimate the amount of conditional payments. CMS should be treated like any other interested party and must provide accurate information regarding its lien. If CMS fails to provide the correct amount, it should be barred from seeking additional reimbursement.

CMS should also compromise conditional payments when the facts of the case show a legitimate dispute and a questionable chance of recovery. It does no good for beneficiaries or Medicare when a case cannot be settled and will be lost at trial. A smaller percentage of a workers compensation settlement is better than no recovery at all.

The amount of bureaucracy and waste needs to be eliminated. Congress should continue its push for bipartisan legislation requiring real change to the conditional payment process.

Contact an experienced workers compensation lawyer

To speak with an experienced workers compensation attorney, call (855) 221-2667 for a free consultation. We will make sure that your legal rights are protected and that you receive the maximum compensation under the law. You never pay an attorney fee unless workers compensation benefits are recovered.

Alex Berman is the founder of Michigan Workers Comp Lawyers. He’s been representing injured and disabled workers exclusively for more than 35 years.  Alex has helped countless people obtain workers compensation benefits and never charges a fee to evaluate a case.

Related information:

Medicare Secondary Payer Recovery Contractor (MSPRC)

Conditional payments remain a problem for CMS

Photo courtesy of Creative Commons, by AMagill.

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