Medicare pd primary in error 2003 going after ER not EE!

[Guest llerner]

I have a client with 48 EEs. They have a Blue Shield fully insured HMO and PPO plan.They have one EE that has a spouse on Medicare that is also covered under the Blue Shield plan. In 2003, Medicare paid over 50K in claims as primary payer for the EE's spouse. The providers did not advise Medicare or did not know that another payer was involved or that Blue Shield should have been primary. Rather than contact the employee, CMS sent all the claims addressed to the employer saying that they were responsible since the group insurance should have been primary and Medicare paid in error.

CMS has hired a collection agency that has been harassing the employer. The employer did not even know that the employee had a spouse with serious illness and contends that they should not be held responsible. I sent the claims over to Blue Shield however my concern is that the claims are over one year old and they may decline payment. Also, the letterhead and the letterhead were CMS letterhead addressed to the employer. Could this be a sneaky way for a hospital to get payment or is it legit?

How can the employer be responsible when they were not aware of an individual medicare status or condition?. They cannot go to the hospital with the EE and their spouse in order to police their submission of the Blue Shield card along with the Medicare card. They cannot control what the provider does either and they are not aware of everyone's medical condition.

I contacted the collection agency and they told me that since the employer has a group insurance policy, they are responsible to pay back Medicare! zIt is fully insured so I don't know why that would be the case when insurance is not mandatory in Californua.

Blue Shield representative told me that they have had 3 cases like this in the last month and they have never seen it before. Is this how we are paying for the Medicare D prescription plan? It makes no sense to me. It would seem that if the statute of limitatons does not require Blue Shield to pay, that the EE would have to bear the responsibility. OR, does CMS realize that the employer will handle this in a more timely fashion and use this as a strategy to recoup the funds? Or is this a scheme where the provider and medicare collude to help the provider get back the funds? Would the employee/employer receive the Blue Shield contracted for aged claims (the contract was in force at the time of the claims)

No one has seen this before in my area, if anyone has an answer or any direction on this, please advise since i am sure there will be more cases like this one. Typically the employee is put into collections for claims not paid by the insurer and are the ones required to submit claim. Is this one of those bills that was attached to other legislation for the hospital lobby or something of that nature or the Medicare Reform Act 2004 that no one noticed but that will have serious repercussions to the employer? Thanks for any help in this. The employer doesn't want to hire an attorney yet since they are afraid they will be stuck with the bill.

[Guest SHaddon]

This is not unusual. Medicare is usually far behind the curve when it comes to timely processing. The good news is the carrier cannot impose their usual timely submission exclusion. They are required to either process the claim based on the benefits in effect at the time the expenses were incurred or submit proof to Medicare that the claim was also paid by them, who received the money and the payment amount.

If the benefit was already paid by the carrier, Medicare will look to the payee for reimbursement whether it is the provider or member.

When I worked in claims offices many years ago, we would get a wave of these claims from Medicare once or twice a year. Because they come so sporadically, you may get resistance from the carrier. If this happens, you need to push back. They are legally required to process the claim.

[Mary C]

Unfortunately, this is not only corret, but legal and in government regulations as part of the Medicare Secondary Payer (MSP) requirements. The regs have been around since the 90's and apply to all employers of 20 or more if the sponsor or contribute to the cost of a health care plan, whether fully insured or not. The regulations override any contractual or plan timely filing limits for claims incurred within the three years immediately prior to the date of the original collection notice. Regulations can be found at Section 1862(b) of the Social Security Act (42 U.S.C. Section 1395y(b)) and also at 42 C.F.R. Part 411. If the claims are not repaid within 60 days (and if a collection agency is involved, its over 60 days), then CMS can charge interst at an enornmous rate until payment is made. Many insurers have separate departments just to deal with these claims and typically called "Coordination of Benefits." I know Blue Shield CA does because I've sent dozens to them. As stated above, they reimbursement demands typically come in waves a couple times a year.

[Guest taylorjeff]

As noted in the previous two responses, this is fairly common. The key issue here is did the employer have the spouse set up as "health plan primary" and not "medicare primary". I apologize if you stated this in your query, but I did not see it. It was the employer's responsiblity to pay the plan primary rate and not a "carve out" or supplemental rate for this spouse. It's been the law since the COBRA/TEFRA changes in the mid-eighties. If the employer had 20 or more employees during the time period in question, their plan should have been primary. If they were paying the "primary" rate, there should be no problems. Most likely BS of Calif has a dept or contact person specifically assigned to handle the MSP / demand letters. They can pull the membership file and work with CMS to finalize the claim. Be prepared, it can be a long process. As stated before, CMS does not recognize the carrier's timely filing requirements, but most carriers still put up a fuss. The BCBS assoc went to court back in the nineties and won some reprieve from claims that were dated too far back, but 2003 is a "recent" claim as far as CMS/demand letters go.

If the employer didn't pay the proper premium (they were paying a "carve-out" or supp premium), then they've got problems. I seriously doubt the carrier will go back and retroactively change the billed premium and adjust the claim to pay primary. The employer may be able to negotiate some of the interest away but they're probably stuck with the actual medical charges.