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Make a Plan - Conditional Payment Notices Make a Plan - Conditional Payment Notices

Make a Plan - Conditional Payment Notices

The Center for Medicare and Medicaid Services (CMS) has been collecting information from employers and insurers about Medicare beneficiaries with worker’s compensation claims for several years. In 2015, CMS hired a contractor, the Commercial Repayment Center (CRC), to mine that data to identify sources that have ongoing responsibility for medical care and to pursue reimbursement recovery on Medicare’s behalf. Although CRC increased the number of conditional payment notices and demands in 2016, the accuracy of these notices has varied.

Do you have a plan to respond to conditional payment notices or demands?


The first step in your plan should start before you receive a conditional payment notice or demand. Since the Section 111 mandatory reporting requirements began, some employers have been required to submit quarterly reports with information related to Medicare beneficiaries in non-group health care plans (NGHP). Employers should have a process in place to identify employees who are Medicare beneficiaries at the start of a worker’s compensation claim or those who become beneficiaries during the course of the claim. It is important to have someone who is familiar with these claims ensure that the Section 111 reporting information related to the claimed condition and the injury code is accurate. It is equally important to have a mechanism to adjust the data during the course of the claim if something changes. 


As soon as you learn a worker’s compensation claimant is a Medicare beneficiary, you should evaluate Medicare’s potential interests, investigate whether it could assert any conditional payments, and determine the steps that need to be taken to resolve this interest. If you wait to pursue this evaluation until you schedule mediation or a reach a settlement, the final settlement could be delayed several weeks.


Once you receive a conditional payment notice or demand, review and evaluate the demand carefully. Analyze the amount, the claimed conditions, and injury codes for accuracy. Does the notice date agree with the information you submitted under Section 111? Review the CMS Enterprise Portal to double-check CRC’s work for accuracy.

If you disagree with the accuracy of the information, don’t delay. You have 30 days to dispute the notice through the dispute process. The Strengthening Medicare and Repaying Taxpayers (SMART) Act allows you 120 days to appeal a demand letter.


Most employers and insurers responsible for Section 111 reporting understand the conditional payment process and are familiar with the Medicare Secondary Payer (MSP) Act responsibilities. CRC is newer to this process and has exhibited an inconsistent understanding of CMS’s recovery rights. If you believe there is an error, follow the dispute process to explain the error. You may also find you need to have a discussion with the employee’s counsel about the parties’s responsibilities to consider Medicare’s interests when resolving medical care issues in a worker’s compensation claim involving a Medicare beneficiary. 


Once you have reviewed the information for accuracy, resolved any disputes, and reimbursed CMS as part of the settlement process, be sure to adjust the ongoing responsibility for medical (ORM) fields in the CMS database and your quarterly submission to reflect ORM termination. If the ORM field remains ‘Y’, CRC may continue to assert reimbursement.

If you have any questions about Medicare reporting responsibilities or options to respond to conditional payment notices or demands, please contact Ann Stewart or another member of our Worker's Compensation Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.
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