NOBODY CARES. WORK HARDER (to preserve Medicare).

I know, you just want to settle your claims, and you don’t understand why this has to be so complicated! I could just say “well, it is the federal government we’re dealing with,” which would be somewhat satisfying, as we’re all rolling our eyes and violently agreeing with one another. But then we would not be recognizing the underlying purpose of the Medicare Secondary Payer statute is to preserve Medicare as a primary payer for its intended beneficiaries.

A good place to start is the Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide, published by CMS: “Medicare Secondary Payer” (MSP) is the term used when the Medicare program does not have primary payment responsibility on behalf of its beneficiaries—that is, when another entity has the responsibility for paying for medical care before Medicare. What this means is Medicare gets cranky about paying for prescriptions, treatment, etc., when another entity is legally responsible.

Assignment of these responsibilities lies primarily in 42 U.S.C. § 1395y(b)(2) and § 1862(b)(2)(A)(ii) of the Social Security Act. “Medicare may not pay for a beneficiary’s medical expenses when payment ‘has been made or can reasonably be expected to be made under a workers’ compensation plan, an automobile or liability insurance policy or plan (including a self-insured plan), or under no-fault insurance.’” Since workers’ compensation world is my stomping ground, I’ll use it as my default for examples, although the same principles apply to other types of insurance (i.e., liability insurance for a motor vehicle accident).

Where a Medicare beneficiary has a workers’ compensation claim, the workers’ comp plan is primarily responsible for claim-related treatment, and Medicare is secondary. If a Medicare beneficiary has WC coverage, the providers are required to bill WC first. However, there is an exception: “If responsibility for the WC claim is in dispute and WC will not pay promptly, the provider, physician, or other supplier may bill Medicare as primary payer. If the item or service is reimbursable under Medicare rules, Medicare may pay conditionally, subject to later recovery if there is a subsequent settlement, judgment, award, or other payment.” The C.F.R. defines “promptly” as payment within 120 days of receipt of the claim.

However, as anyone who regularly deals with these issues knows, Medicare does not appear to give any consideration to whether the claim is in dispute. It seems that Medicare pays bills on behalf of its beneficiaries, throws it in a mixer with every treatment and diagnostic code, and leaves it to the claim parties to sort it all out. This billing for workers’ comp claim-related treatment is how a conditional payment is born. When Medicare pays a bill “conditionally,” it creates a super lien called a “conditional payment lien,” which is a topic unto itself.

Take note, this principle of when and whether Medicare is the primary payer is somewhat broader than it appears. Not only are the providers required to bill the responsible workers’ comp or insurance entity first, “Medicare beneficiaries are required to apply for all applicable WC benefits,” which means Medicare should not be billed until and unless the payment or approval is denied by the applicable authority. In Ohio, this means we are required to utilize the administrative hearing process for contesting treatment, via the Ohio Industrial Commission, until the administrative appeals are exhausted. There is no requirement to file an appeal from any order denying treatment into a court.

Well, that’s all for now. Stop back soon, for the answer to “If my settlement is under $25,000, I can utterly ignore Medicare, right?”

Thanks for stopping by.