Medicare as Secondary Payer

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When a patient has Medicare and another health plan, it is necessary for the provider to make every attempt  to try to identify whether Medicare should be billed as the primary carrier. This is for all services rendered (or items delivered to a Medicare beneficiary.This can be done usually by contacting the MAC through their automated system or having the patient fill out a form such as this one:

https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/ProviderServices/Downloads/CMS-Questionnaire.pdf

If Medicare is not the primary payer, the provider must bill the other insurance payers before billing Medicare. The provider must submit a Medicare Secondary Payer (MSP) claim even if the primary payer made payment in full. This is done in case the “other plan” attempts to recoup monies from the provider at a later date. It would show timely billing to Medicare so that Medicare would possibly pay in case the other monies had to be returned at a later date.

When a Medicare beneficiary’s insurance has changed, it is up to the beneficiary to contact Medicare so that the changes can be made to the Medicare master file. Though the provider can attempt to update this information; the patient will be responsible for the bill if they have not assumed this responsibility, and followed up to make sure that the changes are reflected at Medicare.

When is Medicare considered primary or secondary?

The following link is an excellent (and updated) resource to help determine when a provider bills a health plan or Medicare as primary or secondary.

http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/msp_fact_sheet.pdf

 

When submitting an MSP claim, the following fields MUST be filled out:

Item 4: If insurance primary to Medicare, list name of insured. When insured and patient are the same, enter “SAME”

Item 6: Check appropriate box for patient’s relationship to insured

Item 7: Enter insured’s address and telephone number. When address is the same as patient’s, enter “SAME”

Item 10a: Is patient’s condition related to employment? Yes/No

Item 10b: Is patient’s condition related to auto accident? Yes/No

If answer=yes, include the two digit state code under Place

Item 10c: Is patient’s condition related to other accident? Yes/No

Item 11: Enter insured’s policy or group number

Item 11a: Enter insured’s eight-digit birth date and sex if different from item 3

Item 11b: Enter employer’s name, if applicable

Item 11c: Enter nine digit payer ID for primary insurer or complete primary payer’s program/plan name

Conditional Payments

Under Medicare Secondary Payer law, Medicare does not pay for items or services that payment has been, or may reasonably be expected to be, made through a no-fault or liability insurer or through Workers’ Compensation. Medicare may consider a conditional payment when there is evidence that the primary plan does not pay promptly, conditioned upon reimbursement back to Medicare when the primary plan does pay.

(This means that Medicare would have to be repaid if payment finally did come through from a Workers’ compensation or a no-fault liability insurer.) The Benefits Coordination & Recovery Center( BCRC) is the organization responsible for recovering conditional payments when there is a settlement, judgement, award or other payment made. When the BCRC has information concerning a potential recovery situation; it will identify the affected claims and begin recovery activities.

 

For more information on Medicare, please go to www.medicalbillingstudycourse.com and look at the complete and updated courses available for medical billers.

*Please refer to the guidelines from your MAC as they frequently change and there are processes that one needs to go through to do this correctly.

** this article is not intended to be used as legal advice. If you are uncertain of any information in this article, we suggest that you seek legal counsel.

Handling Medicare Overpayment Letters

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Many Medicare Administrative Contractors or MACs are hiring outside Recovery Audit Contractors to audit claims in an attempt to recover Medicare funds that have been paid incorrectly or should not have been paid at all. In some cases these overpayments can add up to several thousand dollars. If overpayments are discovered a letter is sent to the provider informing them of the overpayment. It is important to know how to handle these letters when they arrive.

 

It can be very unnerving to receive a letter from your Medicare Administrator Contractor telling you that you need to repay $10,000 to your Medicare carrier because of overpayments over the past three years.

The overpayment may be for several reasons.

  • Duplicate submission of the same service or claim;
  • Payment to the incorrect payee;
  • Payment for excluded or medically unnecessary services; or
  • A pattern of furnishing and billing for excessive or non-covered services.

Before you panic, there are procedures that one must follow; including a strict timeline.

 

 

Day 1: you receive the letter from the MAC

 

Read the letter and the explanation as to how the overpayment occurred. If you do not understand why/how it occurred, call the MAC for an explanation. It is important that you understand why/how the overpayment occurred for two reasons:

 

  1. To determine if the overpayment is accurate
  2. To make sure it doesn’t continue going forward

 

Once you understand the reason for the overpayment, determine if you believe the overpayment is correct. One of the options described below is to submit a rebuttal. If you believe that the overpayment is not correct a rebuttal can be filed. For example, if you are notified that several claims for one particular patient were reprocessed because they state that the patient was incarcerated at the time of the services, but you know that the patient was not incarcerated, a rebuttal should be filed. Proof of the patient’s release from jail should be included in the rebuttal. Below the options of how you can respond are outlined:

 

 

Your options are:

 

  1. Make an immediate payment

 

  1. Request an immediate recoupment which means that your MAC will withhold a set amount of money, a percentage of future payments or take the complete amount owed from claims submitted.

 

  1. Request the standard recoupment process. If a full payment is not received 40 calendar days after the date of the initial demand letter, the standard recoupment process will begin on day 41. The overpayment will be recovered from current payments due or from future claims submitted.

If a debt has not been paid or recouped (unless a valid appeal has been filed) within 60 days of the date of the initial demand letter, an Intent to Refer letter will be sent indicating that the overpayment may be            eligible for referral to the Department of Treasury for offset or collection.

 

  1. Request an Electronic Repayment Schedule (ERS). If the practice cannot pay the overpayment in full, they can arrange to pay on a schedule but interest will be charged.

 

  1. Submit a rebuttal. You have within 15 days from the date that you received the demand letter to respond to your MAC. The letter needs to explain or provide evidence about why the MAC should not begin the recoupment. This rebuttal is not considered an appeal and will NOT stop the recoupment process however the MAC is required to address your rebuttal promptly.

 

Day 15: Last day for MAC to receive rebuttal

 

Day 30: MAC sends a second demand letter for delinquent overpayments. This is the last day to pay to avoid accrual of interest. It is also the last day to request an appeal and stop recoupment of overpayments. If you file an appeal after Day 30 but by Day 120, your MAC will stop recoupment when it receives and approves your appeal, but will not refund any monies already recouped.

 

Day 31: Interest begins to accrue for overpayments not paid to MAC in full by Day 30.

 

Days 61-150: MAC sends intent to refer (ITR) letter to the IRS for eligible delinquent debts.

 

Day 90: MAC attempts to contact practice by phone

 

Day 120: Last day to submit initial appeal request

 

Days 120-180: MAC enters the debt into the Debt Collection System to refer to the Treasury Department/ The MAC must attempt to reach the practice by phone at least seven days before referring to the DCS

 

The important thing is that you cannot simply ignore the demand for repayment. It will not go away. It is important that you determine if the overpayment is accurate and then take the appropriate action based on that determination. Making a plan will help to make the process easier.

 

* Please refer to the guidelines from your MAC as they frequently change and there are processes that you need to go through to do this correctly.

 

** This article is not intended as legal advice. If you are uncertain of anything contained in the overpayment request or any information in this article we suggest that you seek professional legal advice.

 

For more information on Billing Medicare visit our online course Billing Medicare, TRICARE And Medicaid

Most Common Error on the New CMS 1500 (rev 02-12)

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The new version, CMS 1500 (rev 02-12) form has been being used now for just over two months after it’s April 1st implementation.  The most common error that providers are making when completing the new CMS form is on box 17, the referring/ordering/supervising physician field.  On the new CMS 1500 (rev 02-12) a qualifier is required to indicate whether the provider is referring, ordering, or supervising.  Below is a recap:

 

On the newly revised CMS 1500 (rev 02-12) form which will become mandatory by Medicare on April 1, 2014, providers will have to use the appropriate qualifier to indicate referring, ordering and supervising physicians. On the old CMS 1500 (08-05) form it wasn’t necessary to differentiate between referring, ordering and supervising physicians. The provider’s name and NPI were simply entered in box 17. With the new form Medicare is requiring that the appropriate qualifier is used to differentiate between referring, ordering, and supervising physicians by using the following qualifiers:

 

◦DN -> to indicate a Referring Provider
◦DK -> to indicate an Ordering Provider
◦DQ -> to indicate a Supervising Provider

 

These qualifiers should be entered to the left of the dotted vertical line in box 17. If the qualifier is not present the services will be denied.

 

Is Your Doctor Breaking the Law? The truth about waiving co-pays revealed

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Most people in the medical billing industry are aware that there are compliance issues with professional courtesies or the waiving of patient responsibilities but there still seems to be a lot of confusion surrounding the issue. What they are not aware of is that the practice of waiving the patient responsibility may actually be breaking the law.

 

Many providers do not understand why they cannot decide to extend a break for services rendered to a family member or friend. They feel that they have a right to choose if they want to collect the money that the insurance carrier deems to be the patient’s share.

 

The insurance carriers feel differently about the situation. They feel that by waiving the patient responsibility the provider is intentionally charging a different price for the same service. For example, a provider charges $100 for a level 3 established patient office visit and the patient’s insurance carrier pays $80 and the patient has a $20 copay. If the provider waives the $20 copay the insurance carrier feels that the provider is willing to accept $80 for the level 3 established patient office visit. Based on that they feel that they overpaid the provider $20. They should have paid $60 and the patient should have paid $20.

 

Why does the insurance carrier feel this way? Basically all of these concepts, deductible, co-pay and co-insurance, are cost share obligations.  The rules of managed care state that the patient CANNOT see the doctor until they make their co-payment. Managed care is governed by federal law and is not open to interpretation. To “write-off” a co-pay, or to allow a patient in to see the doctor without collecting the co-payment, is against federal law.

 

Federal law never allows waivers of patient responsibility to be offered as part of any advertisement or solicitation. Basically a provider cannot use the enticement of waving the patient’s responsibility to get a patient in the door. A provider may think that they can advertise a special where they will waive the patient’s co-pay for a new patient consultation to try to get more patient’s into their practice but this is illegal.

 

Most managed care contracts that providers sign when enrolling to be participating with an insurance carrier forbid waiving patient responsibility. They consider such waivers to constitute insurance fraud, misrepresentation and unfair competition. If an insurance carrier discovers a provider is waiving co-payments the insurance carrier has the right to stop payments on a claim and/or recover amounts already paid on claims.

 

Professional courtesies must be distinguished from waiving patient responsibilities. A professional courtesy is when the provider waives the entire fee for a physician, or the dependent of a physician. A professional courtesy may also be a discount such as 50% for such an individual or the provider may choose to waive only the patient’s out of pocket expenses as well. This is known as accepting “insurance only” as payment in full. The issue is that this professional courtesy is often extended to many others such as staff, family of staff, friends, etc.

 

Generally if the professional courtesy is the waiving of the entire fee or a percentage of the entire fee it is considered legal. However, if the professional courtesy is waiving the co-pay or the patient responsibility it is generally considered illegal especially if the patient has a federal insurance plan such as Medicare. This is true even if the patient is a physician.

 

It would also be considered illegal if the professional courtesy was extended to a patient who is in a position to refer business to the provider. This could be considered fraud and abuse, especially in the case of Medicare patients. Waiving patient responsibility for Medicare patients violates a federal statute that states that the provider knows that waiving the patient responsibility is likely to influence the patient to seek care from that provider.

 

Some individual states agree with the insurance carrier’s perception and have declared the insurance only courtesy is insurance fraud. If the provider accepts insurance only then the state feels that they are misrepresenting their fees by charging insurance carriers a fee that is higher than the fee that they actually intend to collect.

 

There are many situations where waiving the patient’s responsibility either in the form of a deductible, co-pay or coinsurance is deemed illegal. Federal plans and managed care plans are covered under federal law and most commercial plans, depending on the state, are covered under state laws. If not illegal, it is most likely a violation of the provider’s contract with the insurance carrier. Violating the contract may result in the provider being removed from the insurance carrier panel.

 

Basically, providers are not supposed to ‘forgive’ patient responsibilities without proof of financial hardship. Such financial hardship cases must be consistent and not provided routinely and the hardship should be documented in the patient’s chart. Therefore, the best course is to avoid waiving the patient responsibility unless a financial hardship has been established. Office policies should be reviewed regarding any courtesy discounts to make sure that they are compliant.

 

To learn more about this and other legal issues check out our online course: HIPAA, HITECH and Regulatory Issues

Qualifiers Needed for Referring, Ordering, and Supervising Providers

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On the newly revised CMS 1500 (rev 02-12) form which will become mandetory by Medicare on April 1, 2014, providers will have to use the appropriate qualifier to indicate referring, ordering and supervising physicians. On the old CMS 1500 (08-05) form it wasn’t necessary to differentiat between referring, ordering and supvising physicians. The provider’s name and NPI were simply entered in box 17. With the new form Medicare is requiring that the appropriate qualifier is used to differentiate between referring, ordering, and supervising physicians by using the following qualifiers:

 

◦DN -> to indicate a Referring Provider
◦DK -> to indicate an Ordering Provider
◦DQ -> to indicate a Supervising Provider

 

These qualifiers should be entered to the left of the dotted vertical line in box 17. If the qualifier is not present the services will be denied.

 

Other changes on the newly revised CMS 1500 (rev 02-12):
◦Indicators to differentiate between ICD9 and ICD10 codes
◦Number of possible diagnosis codes from 4 to 12

 

Why Our Courses Are A Step Above!

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