Posted by Matthew Garretson & Mary Skinner
Matt, Read your very fine article on Medicare Reimbursements in AAJ Section Connection…
Question: I resolved a S/F case down here in Florida. Client was operated on at a private charitable hospital run by Catholic Health. Surgery was elective but needed to repair torn rotator cuff. Hospital took Medicare info at admission. A few weeks after surgery (Feb. ‘06), I wrote for hospital records, etc.
Hospital then filed lien for full amount of bill (27K). I called hospital attorney and was told that hospital did not have to file with Medicare and that they would wait as long as it took for me to settle the case.
In reading your article, I question whether this is correct. Our jurisdiction does have a hospital lien law that protects most hospitals. However, I was under the impression, perhaps incorrect, that if the provider was a participating provider that they could not bill the patient. Again, date of accident was Dec. ‘05 and date of service was in Feb. ‘06. Hospital says they had option of billing Medicare or filing lien and waiting for settlement (which did occur a year later). Thanks for your reply and citations, if available.
I am happy to try to help. Mary Skinner, our Manager of Medicare Services, may have some additional insights. Also, I wanted to make sure that you had seen [pages 2 and 3 of the document I sent you] that speak to this issue of Medicare’s new policy (May 2006) allowing providers to wait and bill the beneficiary for the actual charges. Previously, participating providers were required to bill Medicare. See CR 4024, Transmittal 49, updating Pub 100-05 Medicare Secondary Payer, April 7, 2006. I believe the hospital is correct. If your client hasn’t signed the settlement agreement yet, you might tell the hospital that client will not sign unless hospital submits to Medicare b/c that is the only way she can be ensured an acceptable net settlement. (i.e. telling the hospital that it has everything to loose). Hope this info helps.
The hospital is correct, please see below. However, the hospital may not demand payment from the beneficiary until the beneficiary has possession of the settlement proceeds.
Provider/Supplier Billing in MSP Liability Accident Situations
The following is to explain Medicare policy with respect to provider and supplier billing options when Medicare is secondary payer to liability insurance. This article pertains to liability insurance only and does not pertain to Med-Pay/no-fault insurance.
Where a provider/supplier has reason to believe that it provided services to a Medicare beneficiary for which payment under liability insurance may be available, the provider/supplier;
· Within the first 120-days, must bill only the liability insurer, unless it has evidence that the liability insurer will not pay within the 120-day period. If the provider/supplier has such evidence, it may bill Medicare for conditional payment, provided it supplies documentation to support the fact that payment will not be made within 120 days.
· After the 120-day period has ended, the provider may, but is not required to, bill Medicare for conditional payment if the liability insurance claim is not finally resolved.
· If the provider/supplier chooses to bill Medicare, it must withdraw claims against the liability insurer or any lien that was placed on the beneficiary’s settlement.
· If the provider/supplier chooses to continue its claim against the liability insurance settlement, it may not also bill Medicare. (Note: Medicare timely filing limitations in 42 CFR 424 continue to apply. If a provider or supplier chooses not to bill Medicare during the Medicare filing period, it may not bill Medicare after this period has expired even if it is unable to collect from the proceeds of the liability insurance settlement.)
The provider or supplier may not collect payment from the beneficiary until after the proceeds of liability insurance are available to the beneficiary. Liability insurance is not the primary payer until after payment is made by liability insurance. If the liability insurance payment is made to the beneficiary, the provider may accept money from the beneficiary only if the beneficiary voluntarily makes payment. The provider can in no way demand payment from the patient.
After receiving payment from the liability insurance company, the provider must submit an MSP bill. Providers should submit an MSP bill even if payment in full was received and Medicare will not be making any payment, as the patient’s Medicare utilization will be updated.
Providers/suppliers that choose to bill Medicare must accept the Medicare approved amount as payment in full and may charge beneficiaries only for deductible, coinsurance, and non-covered items or services.
Providers/suppliers that choose to pursue liability insurance may charge beneficiaries actual charges, up to the amount of the proceeds of the liability settlement but may not collect payment from the beneficiary until after the proceeds of liability insurance are available to the beneficiary.
Where a provider/supplier chooses to bill Medicare for conditional payment, it must cease all attempts to collect payment from the proceeds of the liability settlement (including any liens it may have placed against any settlement). The continued pursuit of collection of payment of actual charges from the proceeds of liability insurance after the provider/supplier has billed Medicare violates the provider/participation agreement. Therefore, the collection of actual charges from the proceeds of liability insurance after Medicare has paid for the services is an incorrect collection.
By submitting the assigned bill, the provider or supplier voluntarily gave up its right to collect actual charges for Medicare covered services from the beneficiary (either directly from the beneficiary after settlement of the liability claim or indirectly from the liability insurance payer). Hence the provider or supplier no longer has a right to be paid in excess of the Medicare allowed amount and can bill the beneficiary only for the applicable deductible, coinsurance amounts and any non-covered amounts. The provider or supplier, in accord with its assigned claim, must refund the beneficiary any amount collected in excess of the Medicare payment for the services and amounts for which the beneficiary is otherwise liable.
If a provider/supplier receives payment form a liability insurer after having already billed Medicare for the services, the provider should:
Return the payment to the liability insurer; or,
Forward any payment received from the liability insurance company to the beneficiary. The provider may retain only the amount of any unpaid deductible, coinsurance, or non-covered services.
The provider must notify Medicare regarding details of the liability involvement/payment and Medicare will then recover its conditional payment(s) from the beneficiary.
The provider should not submit an adjustment (XX7) or cancel (XX8) type of bill in an effort to refund Medicare for services subsequently paid by liability insurance. AdminaStar Federal will accept a refund in the form of a check if the provider chooses to refund the payment made by Medicare. However, if the provider chooses to refund the Medicare payment, the provider may only retain from the liability payment, an amount equal to Medicare’s allowed amount. The provider must refund to the beneficiary the balance of the liability payment in excess of the Medicare allowed amount plus any amounts for which the beneficiary is otherwise liable (such as unmet deductible, coinsurance, and non-covered services). Providers that choose to refund the Medicare payment should utilize the Liability Data Worksheet to insure the payment is applied to the correct patient account.
Submitting a Conditional Claim upon Denial from the Liability Insurer
If the provider/supplier receives a denial from the liability insurance company, it may bill Medicare conditionally using the most appropriate denial code. To submit a conditional claim, use one of the appropriate denial codes along with an occurrence code 24 (date of denial). If there has not been a payment and 120 days have passed since the liability insurer was billed, you may use the DA denial code. When using the DA code, you will not use the occurrence code 24.