Thursday, May 5, 2011

MSPRC Complications in Mediated Liability Settlements

Since last fall's new October 1st liability settlement reporting deadline for providers, problems facing institutions and insurance carriers not knowing the amount of a Medicare reimbursement before settlement have become worse. Since Congress passed the Medicare, Medicaid and SCHIP Extension Act (MMSEA), litigants have scrambled to interpret the impact on the resolution of liability claims. Sanctions for non-compliance imposed by Section 111 of the MMSEA include fines of $1,000 per day. This provides an impetus for both the plaintiffs and defendants to actively engage the Centers for Medicare and Medicaid Services (CMS) regarding implementation of this law. When the Medicare Secondary Payer Recovery Contractor (MSPRC) has been notified of a claim, it will issue a “Rights and Responsibilities” (RAR) letter informing the beneficiary of his or her responsibilities to Medicare. Within 65 days from the RAR letter, the MSPRC automatically issues a "Conditional Payment Letter," which contains the amount Medicare paid for medical claims related to the case. However, it is not until after MSPRC receives notice of a settlement, judgment, or other payment that it calculates the final reimbursement amount and issues its “Demand Letter.” Originally, conditional notice was issued when MSPRC learned of a settlement without the plaintiff having notified it. Notifying Medicare of a case early in the litigation process should speed conditional amount information. If MSPRC is notified of settlement, but the beneficiary or representative never received an initial Medicare lien amount, a conditional notice will issue first. This slows the process and can complicate settlements at mediation due to not knowing the true amount of the Final Demand.

For more detailed information on liens, see Medicare's website: