Recently we blogged that CMS had planned to go-live with its pre-settlement final demand functionality on January 1, 2016, but instead CMS has moved it up to December 21st. In its announcement, CMS provided some additional information on how the process required by the SMART Act will now work. To view the CMS alert in its entirety, please click here.
Commentary: CMS has elected to limit parties to one (1) download only from the Medicare Secondary Payer Recovery Portal (MSPRP) to secure a final conditional payment amount. We had hoped, that CMS would recognize that circumstances change during the negotiation of a settlement, and allow for an additional download, so long as it was within the 120 day period. Regrettably, this was not the course of action taken, and parties must be careful in navigating this requirement to protect itself from additional conditional payment demands by CMS or any of its recovery contractors. Should the parties fail to secure a settlement within three (3) business days from download, then the parties only option would be to secure a Demand Letter after settlement through methods that existed prior to this new feature being implemented. Further limiting this new process, is the added CMS requirement (which was not part of the SMART Act) is the added burden requiring parties to submit settlement information through the MSPRP within 30 calendar days of its occurrence. If the second CMS rule is not met, the downloaded pre-settlement demand is essentially worthless as the parties would be subject to additional conditional payment demands. The only way to avert this, if the deadline is not met, would be to resort to the traditional methods of securing a Demand Letter from the CMS recovery contractor post-settlement.
These timelines are stringent; therefore, it is imperative to secure experts to protect the settlement from additional exposures by CMS. The process will be helpful if the requirements are met, but they must be strictly adhered to. The milestones that must be tracked are follows:
- Notice to CMS that settlement will occur within the next 120 days;
- Monitor for conditional payment obligation availability and amount;
- Dispute if necessary unrelated charges, within the eleven (11) day time-frame;
- Monitor for updated amount and warn if 120 day time-frame will be exceeded;
- Download final demand amount, if and only, settlement is imminent within the next 3 business days; and
- Upload settlement information to the MSPRP within thirty (30) days of that settlement.
It is important to understand that CMS is providing a single shot at this process, thus it must be used carefully. More importantly, the parties should agree who will manage this process, as CMS has not made that clear, consequently, if it is available to all parties. As a consequence, there are a number of questions that we will have to answer for ourselves as this process rolls out:
- What happens if both parties initiate this new process at the same time – which demand takes precedence?
- What does CMS mean by the debt being transferred to the beneficiary, once the Final CP process has been established – is it even possible to secure a pre-settlement demand?
- Is only a traditional method available to finish up the new beneficiary created debt that occurs after the Final CP process?
- If a case also involves ORM, which most workers’ compensation claims do, do we terminate ORM at the time notice is provided so we can pay off the outstanding ORM responsibility to secure a pre-settlement demand?
Many of these questions are raised because of the additional information provided by CMS in the alert that states:
Important Note: An insurer and their authorized representatives can initiate the Final CP process on their insurer-debtor case as long as a settlement is pending on the case and no outstanding Ongoing Responsibility for Medicals (ORM) exists. Once the Final CP process has been started on an insurer-debtor case, the following events will occur:
- The insurer-debtor case will be closed and the debt will be transferred to a new case where the beneficiary is the identified debtor.
- The insurer and their authorized representatives will not be able to work the new beneficiary-debtor case or receive copies of any recovery-related correspondence related to the new beneficiary-debtor case until they obtain and submit an authorization signed by the beneficiary.
Regrettably the hope for SMART to simplify recovery methods may be hampered by these rules. Only time will tell how these methods will play out and more than likely will require further legislative involvement which we will monitor and report from our involvement with the MARC Coalition.
Heather Schwartz Sanderson, Esq., MSCC, CHPE, CLMP, CMSP
Chief Legal Officer
Franco Signor LLC