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The MSPRC announced today a new option for resolving Medicare conditional payment obligations for settlements $25,000 or below.  The new option allows for self calculation of the amount and submission to the MSPRC for review then ultimately issuance of a final demand (assuming MSPRC agrees with the figure).  This new process could significantly streamline the process for resolving conditional payments in small recoveries.  Below is the substance of the announcement. 

"Self-Calculated Final Conditional Payment Amount" Option

The Centers for Medicare & Medicaid Services (CMS) will be implementing an option that will allow certain Medicare beneficiaries to obtain Medicare's final conditional payment amount prior to settlement. This option will be available in February 2012, for certain settlements involving physical trauma based injuries where treatment has been completed. 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.

In order to use this option, ALL of the following criteria must be met:

1. The liability insurance (including self-insurance) settlement will be for a physical trauma based injury (the settlement does not relate to ingestion, exposure, or medical implant);
2. The total liability settlement, judgment, award, or other payment will be $25,000 or less;
3. The Date of Incident occurred at least six months before the beneficiary or his representative submits his proposed conditional payment amount to Medicare;
4. The beneficiary demonstrates that treatment has been completed and no further treatment is expected either through a written physician attestation or by certifying in writing that no medical treatment related to the case has occurred for at least 90 days prior to submitting the proposed conditional payment amount to Medicare

Explicit instructions on how to use this process will be posted on the Medicare Secondary Payer Recovery Contractor's website at www.msprc.info by January 15, 2012. CMS will leverage existing processes to the greatest extent possible. This is an initial step to provide beneficiaries and their representatives with Medicare's conditional payment amount prior to settlement. CMS plans to expand this option as it gains experience with this process.

In addition, the AAJ announced these changes to the membership.  Below is a statement from Linda Lipsen, Chief Executive Officer of the AAJ.

"Dear Colleagues,

When we work together, we get things done. It’s that simple.

AAJ has worked determinedly for two years to improve the Medicare Secondary Payer (MSP) reimbursement process. Now a bright spot in an otherwise dismal year in Washington has emerged: Improved Conditional Payment Guidelines from the Centers for Medicare & Medicaid Services.

The Centers for Medicare & Medicaid Services (CMS) have released guidelines to provide certainty and finality when it comes to conditional payments. These guidelines — which will initially be implemented in claims with a total settlement value of $25,000 or less — will enable you to receive a final number from CMS about how much is owed prior to settlement.

• The parties can self calculate how much they believe they owe CMS and provide CMS with that number.
• CMS will review this information and determine its accuracy.
• CMS will then provide a final demand letter within 60 days of a request by the beneficiary or his or her attorney.
• The final demand from CMS will be considered reliable and final if settlement occurs within 60 days of the date the final demand letter is issued.
• Full instructions on how to calculate the amount of Medicare’s conditional payment will be available at www.msprc.info by January 15, 2012.
• The option of obtaining a conditional payment amount will be available in February 2012, for certain settlements involving physical trauma based injuries where treatment has been completed. Criteria for using this option includes:
  • The settlement does not relate to ingestion, exposure, or medical implant;
  • The incident occurred at least six months before the beneficiary submits his proposed conditional payment amount to Medicare;
  • The beneficiary demonstrates that treatment has been completed and no further treatment is expected either through a written physician attestation or by certifying in writing that no medical treatment related to the case has occurred for at least 90 days prior to submitting the proposed conditional payment amount to Medicare.
• The claim amount of $25,000 is considered a starting point. CMS stated that the claim amount will increase. We expect the next phase-in in approximately six months.

You rallied around this enormous effort and supported AAJ Public Affairs as we worked with the Obama administration to clarify trial lawyers’ concerns. Additionally, AAJ worked through a bipartisan coalition of business and insurance groups to raise the profile of this issue, and so many of you communicated directly to your members of Congress to amass co-sponsors for MSP-related legislation.

Together we gained traction and moved this issue forward.

Thank you for your continued support of AAJ’s Public Affairs team. As you know, there are more pieces of the MSP process that need resolution, and we will continue to update you when we receive additional information.

Best Regards,

Linda Lipsen
Chief Executive Officer
American Association for Justice"