On April 22, 2015, CMS published a downloadable document further explaining the recently available appellate rights granted to applicable plans/primary payers where Medicare seeks Medicare Secondary Payer (MSP) recovery directly from those applicable plans. The document can be found here. The CMS publication follows the final rule implementing certain portions of the Strengthening Medicare and Repaying Taxpayers (SMART) Act of 2012. Prior to passage of the Act, only Medicare beneficiaries were empowered to formally appeal the amounts to which Medicare claimed as reimbursable for treatment that is the responsibility of an applicable plan.
In the document, CMS defines "applicable plans" to include liability insurance, (including self-insurance), no fault insurance and workers' compensation laws or plans. CMS expects that payments made for accident related medical care will be reimbursed from a settlement, judgment, award or other payment made to the or on behalf of a beneficiary, including cases where ongoing responsibility for medicals (ORM) exists. Accordingly, triggering events for recovery actions ripen at the time funds are paid by the insurer or payment made is under an existing policy. CMS also identified that the appeals process to be utilized by applicable plans parallels the system already in place for beneficiaries and that had been unavailable to primary payers until the passage of the SMART Act.
The final rule is effective as of April 28, 2015 and will apply to all recovery actions commenced by CMS as against primary plans on or after April 28. For all cases prior to the effective date of the final rule, an applicable plan would, therefore, have no appeal rights. The document also clarifies that a "courtesy copy "of a recovery demand letter does not mean that the plan has appellate rights. As stated in the final rule, and as the document makes clear, Medicare's target of recovery (applicable plan or beneficiary) is not appellate. Rather only the amount of the debt and/or its existence is subject to appellate review.
The review process available to applicable plans is described as well. It includes:
- Initial determination - the MSP recovery demand letter
- Redetermination - by the contractor that issued the demand
- Reconsideration - by a Qualified Independent Contractor
- ALJ review
- Review by the Departmental Appeals Board's Medicare Appeal Council
- Federal Judicial review
Appellate rights are reserved to the applicable plan when Medicare pursues conditional payments from the plan. The beneficiary is not a party to the action but will receive notice if a redetermination is requested and as an appeal moves forward.
In order for a third party to assist an applicable plan in the appeal of an MSP recovery action, a proper Proof of Representation must be submitted concurrent with the appeal request. Absent a proper proof of representation, appeals will be dismissed. The document states that even where an applicable plan has identified an agent for recovery correspondence as set out in the information provided to Medicare pursuant to the Medicare, Medicaid and SCHIP (MMSEA) Act of 2007, a separate Proof of representation is required solely for the MSP recovery appeals process.
The April 22, 2015 publication tracks the final rule in every respect. However it clarifies two issues. First, the beneficiary will receive notice of a recovery action against a primary payer, although the beneficiary is not a party to the action. Second, a separate Proof of Representation must be filed at the time of appeal. The parties designated to receive information electronically via the requirements of the mandatory insurer reporting requirements of the MMSEA will not substitute as representatives in the appeals process.
Additionally, CMS will convene an "Applicable Plan" Appeals Webinar on April 28, 2015 (here) which will include the requirements of the final rule along with tips and suggestions for working within the new structure. ECS is prepared to provide conditional payment appeals services on behalf of applicable plans consistent with the SMART Act and the final rule. If you have questions or require clarification or further assistance, please contact us at 866.270.2516.