Medicare Secondary Payer Demand Letter Overview 1 Welcome If you receive a Medicare Secondary Payer (MSP) “demand letter” from the Centers for Medicare & Medicaid Services (CMS), it means that Medicare believes that it has mistakenly paid primary on a claim for which the group health plan, or multiple employer group health plan, should have paid primary. If you receive a demand letter, it is extremely important that you respond immediately to facilitate investigation and processing of the letter, and avoid interest penalties. Here are some guidelines about how to respond. Frequently asked questions What is a demand letter? A demand letter is CMS’ request for reimbursement of Medicare payments when Medicare paid primary for a particular claim or claims, but now believes that the group health plan or multiple employer group health plan had responsibility to pay primary. The letter is “demanding” that the recipient, typically the employer, reimburse Medicare for the overpayment. The amount of the requested reimbursement is indicated on the letter. How is a demand letter delivered? What should I do if I receive a demand letter? When CMS believes Medicare mistakenly paid primary, a demand letter package (typically consisting of the demand letter, an MSP Summary Data Sheet, a Potential Savings Report, and the relevant claims information) will be mailed to the employer of record. LifeWise Health Plan of Oregon may not receive a copy of the letter, so it is important that you notify us about the letter as soon as possible. Do not ignore the letter! Immediately send a complete copy of the demand letter packet you received from CMS to LifeWise. Remember to copy both sides of all pages. Medicare will assess interest if payment is not made, or a valid defense asserted, within 60 days of the date of the MSP demand letter. To avoid paying interest, do not delay sending information to LifeWise. The best way to avoid MSP demand letters • Familiarize yourself with the rules that govern coordination of benefits between Medicare and group health plans or multiple employer group health plans, and • Provide us with the information we need to process claims properly. (See our “Medicare Secondary Payer Overview” brochure for more information.) 2 If you receive an intent to refer letter, How will LifeWise help if we receive a demand letter? immediately send LifeWise the Send correspondence or address questions related to MSP to: We will review the information we receive from you to determine if the group health plan or Medicare is in fact the primary payer. We will examine each claim to see if the provider has already been paid and also whether the group health plan or multiple employer group health plan is responsible to pay under the terms and conditions of coverage. After researching the situation, we will either pay Medicare the requested amount or send a rebuttal to Medicare providing proof that we already paid primary on the claim or provide documentation that Medicare’s demand for payment is not proper (e.g., member was not eligible for coverage). If a rebuttal is sent to Medicare based on member or group eligibility issues, Medicare will require a letter from the employer group confirming these issues. We will send a letter to the employer group at the same time the rebuttal letter is sent to Medicare, requesting that an eligibility letter be sent to Medicare on the employer group’s letterhead confirming our position on the claim. Medicare COB Unit LifeWise Health Plan of Oregon 7001 220th St. SW, MS 166 Mountlake Terrace, WA 98043-2124 What is an intent to refer letter? If CMS does not receive a response to the demand letter by the 61st day after the date of the demand letter, or if it does not accept the defense provided by the group health plan (or multiple employer group health plan), it will send an “intent to refer” letter to the employer of record. This letter informs the employer that CMS intends to refer the debt to the U.S. Department of Treasury (the Treasury) under the Debt Collection Improvement Act of 1996 (DCIA). intent to refer letter along with any additional information received, and an authorization letter, if this has not yet been completed. What is a collection notice? If CMS does not receive a response to the intent to refer letter (or receives a response, but rejects the group or multiple employer group health plan’s rebuttal), CMS will refer the debt to the Treasury. Once the debt is referred, the Treasury can offset the amount of the asserted MSP debt against any monies that the U.S. Government owes the employer, including tax refunds. In addition, the Treasury will typically assign the debt to a private collection agency, which will send a standard collection notice to the employer. This notice will frequently not include specific information about the debt. The collection notice will typically state that if the collection agency does not receive the requested payment by a specified date, it will report this information to the Treasury. In some instances, the collection agency will engage in followup correspondence or phone calls with the employer. If you receive a collection notice, immediately forward the information to LifeWise, (since we may not otherwise receive a copy). You will also need to send a completed Authorization Form, (a sample of which is attached and is available at premera.com in the Employers section). This grants LifeWise the authority to either pay the claim on your behalf or submit documentation to CMS rebutting the alleged debt. The Authorization Form addressed to Medicare must be signed 3 by the employer group on employer group letterhead, or it will not accepted by Medicare as a valid document. What happens if an offset occurs in error? On occasion, a Treasury offset may occur despite an employer’s assertion that the group health plan (or multiple employer group health plan) is not in fact the primary payer. If this occurs, we will assist you in filing a request for refund with CMS. Where can I get additional information regarding the MSP debt collection process? CMS has published information about the debt collection process in its MSP manual and posted answers to frequently asked questions on its Web site. Go to www.cms.gov and navigate to the MSP section of the “frequently asked questions” portion of the Web site. The Web site www.msprc.info is helpful too. You may also contact your Premera account representative with specific questions regarding the MSP demand letter process. This document contains general information and should not be construed as either legal advice or opinion. It is not a substitute for consulting the actual MSP laws, CMS guidance relating to such laws, and/or legal counsel. Sample Authorization Form [Date] MSPRC PO Box 33829 Detroit, MI 48232-5829 Re: Beneficiary Name HIC number Report ID number To whom it may concern: By this letter, we authorize the Centers for Medicare & Medicaid Services, its Medicare contractors, and their employees and agents, and the Department of the Treasury and its employees, contractors and agents to disclose until the debt is closed, any and all information related to a debt identified in an MSP recovery demand letter identified above from the MSPRC regarding the Medicare beneficiary or beneficiaries and their respective Health Insurance Claims Numbers listed in the letter. We also authorize LifeWise Health Plan of Oregon or any of its subsidiaries or affiliates and their employees and agents to resolve the identified debts on our behalf. Sincerely, [Name] [Title] lifewiseor.com 019335 (02-2010) 4