By JARED SHELLY, senior editor/web editor of Risk & Insurance®
ATLANTIC CITY, N.J. -- In the old days of workers' comp and liability, Medicare-eligible workers hurt on the job would go to the doctor, then let Medicare pick up the bill. Many times, the employer or another entity would be ultimately found to be responsible for the bill -- however Medicare didn't seem to have an effective way to get its money back.
Those days are now over.
With electronic medical reporting, Medicare now has a terrific weapon that informs the agency if it's owed the money from conditional payments. While Medicare has been around since 1965, the recent developments are quite a change for the industry, according to experts who spoke at Gould & Lamb's Medicare Secondary Payer Educational Conference in Atlantic City, N.J. on June 18 and 19.
"Before 2009, they relied on the insurer to tell them there are owed funds," said Russell Whittle, senior staff counsel at Gould & Lamb in Bradenton Fla. who was reached by Risk & Insurance® a few days after the conference, "Now the law has been given teeth and they can find out whether there is money that they're owed."
And the penalties can be stiff -- $1,000 per claim per day for non-reporting, said Whittle.
But it's no secret that Medicare eligible people (who are either over 65 or have a chronic condition like renal disease) will likely have medical issues going on at the time of an accident or claim. That means that Medicare may actually be responsible for some or all of the payment, even if it contests it.
"We find that about 80 percent [of medical bills] are not related to the accident," said Whittle.
But with its new-found way of gathering data, (Whittle said that cases are now "delivered into their laps"), Medicare has gotten aggressive in its collection process.
"It's easy pickin's [for Medicare]," said Whittle.
Chatting between sessions at the conference, Brian J. Fillion, associate at Ringler Associates, a settlement annuity company based in Aliso Viejo, Calif. said that "Medicare is looking for all the reimbursement they can get their hands on."
While Medicare has been a hot topic in workers' comp for years, it's sure to be a hot topic in the liability arena as well, Fillion said, since many claimants are on Medicare and accumulating liens for their medical coverage.
"How to control the size of the liens and who controls the size of the liens are huge issues because the last thing the insurance companies and the self-insured companies need is to overpay on these conditional payments because the right analysis wasn't applied during the negotiations and settlement of the case," he said.
Medicare is also concerned with future payments. If a claimant wins money in a lawsuit, then gets all the money right away -- rather than a structured settlement -- they may spend it rather than saving it for medical bills. While companies have been setting up Medicare set-aside programs for years, Medicare is "on the verge" of creating new requirements, Fillion said.
"This is not one of those issues that is easy to understand. Insurance companies, TPAs and consulting firms absolutely need to understand this stuff cold before the law comes in, because the learning curve for their employees is huge," he said.
Fillion said several large insurance companies are dedicating staff to work exclusively on this issue -- and he said it's paying off.
"Because the law is still in transition," said Fillion, "because they haven't fully defined everything ... to have one person focused on the issue, talking to Medicare and getting the answers directly from them, it gives you an expert resource within your company to go to."
June 26, 2012
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