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CMS Releases a Guide for Appealing Medicare Conditional Payment Demands
On April 27, 2023, CMS released the NGHP Applicable Plan Appeals Reference Guide as a way to streamline the appeal process, which includes types of appeals and documentation needed to support appeals. The conditional payment process has multiple steps, each with an opportunity to appeal (as described below):
- Conditional Payment Notice and Opportunity to Dispute. Initially, either the Benefits Coordination & Recovery Center (BCRC) or the Commercial Repayment Center (CRC) will issue a conditional payment notice to the identified debtor. At this point, conditional payments can be disputed if the debtor disagrees with any part of the conditional payments identified.
- Conditional Payment Demand and Redetermination. Next, the BCRC or CRC will issue an initial determination, called a conditional payment demand. The demand letter has two important time periods:
- 60 days after the date of the demand letter, the conditional payment balance will accrue interest if it is not resolved, with interest accruing every 30 days.
- Debtors must request a redetermination to be reviewed by the CRC within 120 days from the date of the demand.
- Reconsideration. Debtors disagreeing with the outcome of the redetermination may then request a reconsideration from a CMS Qualified Independent Contractor (QIC) within 180 days of the redetermination decision.
- Hearing before an ALJ. Debtors disagreeing with the outcome of the reconsideration may then request a hearing before an Administrative Law Judge (ALJ) within 60 days of the reconsideration decision. Keep in mind that ALJ hearings have a historical backlog that could delay the hearing by two to three years or longer.
- Medicare Appeals Council. Debtors disagreeing with the outcome of the hearing may then request a review by the Medicare Appeals Council within 60 days of the reconsideration decision.
- U.S. District Court. Finally, the debtor can then escalate the matter to the U.S. District Court for judicial review after all other levels of appeal have been exhausted.
Notwithstanding the multiple levels of appeal, it is preferable for debtors to have their appeals resolved at the CRC/BCRC level if possible. Both agencies are somewhat strict regarding the 120-day deadline to request a redetermination and will dismiss late appeal attempts unless the debtor can show good cause. Although the Appeals Reference Guide only specifically cites natural disasters as an example, other acceptable “good causes,” such as the CRC mailing the demand to an incorrect RRE address, have been accepted historically. Should the matter be referred to Treasury or the appeal deadlines be missed without good cause, the first three appeal options noted above will no longer be available.
Appeals Reference Guide Directions
The Appeals Reference Guide details the basics of where to mail appeals, the necessary documentation to file an appeal, and the requirements for authorization letters or a letter of authority. The guide identifies the specific conditional payments being challenged as well as the standard claimant or claim identification information that must be documented in any appeal.
The Appeals Reference Guide specifically notes only the amount or existence of conditional payments that may be appealed and the common types of appeal, which include the following foundations for appeals:
- Ongoing Responsibility for Medicals (ORM) related defenses, including ORM termination due to benefits exhaustion, settlement, other claim resolution or policy terms
- Benefits denied or revoked by the applicable plan
- Non-covered services
- Unrelated services
- Duplicate services
This is not an exhaustive list, only the defenses noted by CMS.
Recently, the BCRC and CRC have also required more specific documentation for appeals, as described in the Appeals Reference Guide. Different types of appeals may require different types of documentation as proof for the defense being asserted. For example, if an insurer reported an incorrect policy limit on a MedPay or Personal Injury Protection (PIP) claim or failed to update the benefit exhaust date, CMS will want to see “conclusive written documentation the amount reported was incorrect” in addition to proof that the Section 111 reporting has or will be updated correctly. This can include a payment ledger showing the policy limit paid to the limit out or a declaration page as proof that the policy limit was reported inaccurately.
With regard to defenses involving claim resolution, the insurer will be required to provide applicable documentation. This could include settlement documents, judgment, policy documents or proof of an award. If the claim resolved from a medical standpoint, the insurer should provide medical reports from a treating provider supporting the injury resolved or the treatment is not related to the injury in question.
These are just two examples from the Appeals Reference Guide, but not an exhaustive list by any means. The takeaway should be that the CRC and BCRC will require specific proof for the applicable defense. The Appeals Reference Guide provides general guidance on what documentation the BCRC and CRC are looking for.
Additional Highlights or Points of Interest
Settlement Releases Insurer From Primary Payer Responsibility
Section 3.1.2 states that the “CRC can recover claims up to, but not including, the settlement date, unless the settlement specifically releases the debtor from all primary payer responsibility…” This has never been explicitly stated by the CRC in documentation released previously. In practice, the CRC will issue a debt to the insurer for periods covered when ORM was accepted up while the BCRC issues debts to the beneficiary for post-settlement conditional payments. This seems to indicate that the settlement documentation indicating that the beneficiary assumes responsibility for all conditional payments and releases the insurer from primary payer responsibility constitutes a valid defense to CRC conditional payments. It is important to note that these conditional payments will not go away, and instead would almost certainly shift from a CRC claim to a BCRC claim where the beneficiary would be the identified debtor. With this defense, the insurer must confirm that shifting the conditional payment to the beneficiary is appropriate and follows the terms of the settlement.
Termination of ORM Due to Other Policy Terms – Discussion of MMI/IMEs
Section 3.1.3 discusses under Termination of ORM Due to Other Policy Terms that the insurer can provide proof of Maximum Medical Improvement (MMI) with an example of an Independent Medical Exam (IME) or MMI report. The Appeals Reference Guide does not discuss in detail when ORM termination resulting from MMI is appropriate, and it is somewhat understandable given MMI is different based on what it means in each jurisdiction. The guide describes two specific items that should bring caution to insurers looking to assert an ORM termination solely based on a finding of MMI:
- Termination of ORM due to other policy terms does not negate any laws or regulations requiring primary payer responsibility to continue.
- The CRC and BCRC also require supporting documentation that demonstrates the circumstances allowing termination of coverage, as well as a copy of any other policy or plan documents establishing the applicable policy terms that permit ending the applicable plan’s primary payment responsibility.
Again, MMI can mean different things in different states and does not necessarily indicate a definitive end point to RRE ongoing responsibility for medicals. ORM termination may not be appropriate if a finding of MMI specifically limits or reduces future medical care the primary payer is responsible for but does not terminate all medical treatment the primary payer is responsible for. Insurers should avoid blindly equating MMI with a reason to enter ORM termination unless they are prepared to show documentation and applicable state law indicating termination of ORM is appropriate in that situation.
Optum Can Help You Navigate the Conditional Payment Appeals Process
Over the years, Optum has frequently and successfully appealed CRC and BCRC conditional payments to reduce or entirely remove conditional payments when there is a valid ground for disputing them. At any stage of the appeals process, Optum can help address your conditional payment needs. As the CRC and BCRC conditional payment appeals process continually evolves, our experts can guide you through the process. We can help you every step of the way, whether it is verifying the existence of conditional payments, analyzing whether the conditional payments are related, or appealing a CRC/BCRC decision.
Inaccurate Section 111 reporting can also lead to conditional payments from CMS for reasons such as omitting policy limits, exhaust dates or ORM termination. When assisting on conditional payment related services, Optum can also help you make recommendations on Section 111 updates that confirm your mandatory insurer reporting to CMS is accurate.
Contact Optum for more information on conditional payment services or to discuss how we can help with your Medicare Secondary Payer compliance needs and put you in the best situation to minimize risk and resolve conditional payments.
For additional information, please contact Optum MSP Compliance Counsel, Michael Flower at firstname.lastname@example.org (p) 813-627-2406 or our Conditional Payment Manager, James Martinez at email@example.com (p) 813-612-5549.