On May 25th, the MSPRC temporarily suspended issuing demand letters. The suspension was apparently due to the Haro v. Sebelius decision from Arizona wherein Medicare was enjoined from certain collection practices. What ensued was a review and changes to its Rights and Responsibilities letters as well as its demand letters. On June 27th, Medicare resumed issuing demand letters and posted samples of the new letters on its website. The new letter contains a few notable changes.
- The first notable change is the addition of language relating to Medicare recovery actions while an appeal or waiver request is pending. The letter indicates that Medicare will not begin a recovery action when an appeal or waiver is pending. This is in conformity with the Haro decision.
- Second, there is language that has been added regarding avoidance of the assessment of interest. According to the letter, if a waiver or appeal is requested/filed then the responsible party may choose to repay Medicare the full amount or the amount it believes Medicare is owed within 60 days to avoid any interest. The letter does warn that “interest accrues on any unpaid balance, which may include any amount you are determined to owe once a decision is reached on your request for waiver of recovery or appeal.” Therefore if it is desired to avoid any interest at all, the full amount should be paid while the appeal/waiver request is pending. The letter does state that “if you receive a waiver of recovery or if you are successful in appealing our decision, Medicare will refund any excess amounts you have paid.” Again, this conforms with Haro.
- Third and last, is the addition of a notice provision procedure prior to a recovery action being instituted by Treasury. The letter states that if “Medicare intends to take collection action (including referral to Treasury), you will be provided with appropriate notice.” “This notice will include information concerning appropriate steps to avoid such actions.”
The changes are subtle but are nevertheless important. The process of resolving Medicare conditional payments is timely and isn’t cost effective for most personal injury firms. Considering outsourcing this function to a lien resolution group can make a lot of sense when it comes to conditional payment resolution.