Written by attorney Gregory Francis Lisowski

Ways to Reduce or Eliminate Medicare Conditional Payments

Dealing with Medicare conditional payments has become an essential part of the personal injury and workers' compensation practice. Although, Medicare will not typically negotiate their right of recovery based upon problems with liability, there are several ways in which one can reduce or eliminate conditional payment exposure. The first and most successful way to reduce or eliminate conditional payments is by demonstrating that the payments made by Medicare are unrelated to the injuries claimed in the lawsuit. If the treatment was unrelated to your client's claim, then Medicare is not considered a secondary payer and thus does not have a right of recovery against the settlement or judgment. Upon receipt of the Conditional Payment Letter, a practitioner must identify which procedures and dates of service are unrelated to your client's claim. Identifying which payments are unrelated takes some understanding of diagnostic codes (ICD-9) and CPT codes. A vendor specializing in conditional payment rectification may be necessary to assist in identifying whether the payment should be classified as unrelated. Once you determine which payments are unrelated to the claim, you will need to contact MSPRC in writing to advise them that you are disputing some, or all, of the payments. It is important to contact MSPRC well in advance of the settlement, as this process can take several weeks. It is best to provide MSPRC with a brief correspondence indentifying which dates of service you are disputing. You must also provide them with documentation supporting your dispute, including copies of the complaint or notice of claim, along with copies of medical records showing that the treatment was for an unrelated condition. Upon receipt, Medicare will review the dispute and the documents provided. If they agree that the payments were unrelated to the claimed injuries, they will adjust the conditional payment demand accordingly. Medicare can also waive recovery, in whole or in part, if the probability of recovery, or the amount involved does not warrant pursuit of the claim. Medicare will sometimes accept an offer of compromise to entice a plaintiff to settle, in order to make some recovery, rather than recovering nothing. These offers to Medicare are often accepted where a Defendant tenders the policy limits and the conditional payments are greater than the policy limits. Without some reduction of the conditional payments, the Plaintiff would have no incentive to pursue the claim. Another way to reduce or eliminate conditional payments is by demonstrating that hardship would occur by having to reimburse Medicare. Although this is a completely subjective determination on the part of Medicare, some ways a practitioner can demonstrate hardship is by showing proof of eviction or foreclosure. Finally, Medicare will always reduce its recovery to take into account the cost of procuring judgment or settlement. In order to take advantage of this option, the practitioner should complete and return the Final Settlement Detail Document, provided by MSPRC with the Conditional Payments Letter, along with a copy of the signed release or final stipulations. Medicare will adjust its claim of recovery and send out a Final Demand Letter that takes into account the reduction for procurement cost. If the conditional payments are greater than the amount of the settlement or judgment, the recovery is limited to the amount of the gross settlement minus the total procurement costs. Knowing the various ways to reduce or eliminate conditional payment exposure can mean the difference between resolving a case and resorting to the risks associated with trial. It will also likely result in putting more money in your client's pocket from a judgment or settlement. Should you have any questions, or require assistance in rectifying a conditional payments claim, you can contact the author, Gregory F. Lisowski at MSA Services, LLC (866) 306-9423.

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