The Medicare Secondary Payor (MSP) Program has resulted in an increasing number of employers receiving Medicare Demand Letters. With other finance revenues drying up, the federal government will do what it can to slow the drain on Medicare, Medicaid and Social Security coffers. So Medicare is becoming very aggressive in collecting money from other sources to reduce its own payables.
A worker older than 65 may be covered by the active health plan at his place of employment and still be drawing Medicare payments. If Medicare discovers that it has paid a claim to an employee covered by a private plan, that employer will receive a Demand Letter in the mail insisting that Medicare be reimbursed, with penalty, for the claim that should have been paid for by the company’s health plan.
The obligation for payment can stretch back for many years and may involve a substantial penalty. So what should an employer do to avoid getting such unwanted mail? At the very least, employers must have a solid health plan enrollment verification system in place so that it does not receive unexpected Demand Letters. Receipt of a Demand Letter should be viewed as a red flag that the employer’s benefits administration system is not performing up to par.
Beyond protecting itself from receiving Demand Letters, employers also should be interested in balancing the scales by getting money back from Medicare that is owed them. Health Decisions, Inc. provides a level playing field allowing the employer to take advantage of Voluntary Data Sharing Arrangements (VDSA).
VDSA involves a company conducting quarterly data matches with Medicare in compliance with federal law. Doing so eliminates future Medicare Demand Letters and, more importantly, permits identification and recovery of funds owed by Medicare to the employer. Savings can be significant.
Health Decisions’ technology takes employer data and coordinates with Medicare to make sure there are no surprise Demand Letters and to identify any money owed to the employer’s plans. This is done by taking advantage of cutting edge technology few firms offer.
Health Decisions has worked closely with consultants, brokers and health plans to assist them in helping their clients deal with Medicare secondary payors. “We offer to small and medium businesses the same kind of technical specialization the jumbo companies have,” says Si Nahra, Ph.D., founder and president of Health Decisions, Inc., Plymouth, MI. “We help companies balance the scales by making demands on Medicare.”
Employers need to take Demand Letters seriously and provide timely responses in order to avoid civil monetary penalties and/or a lawsuit. Because of the complexity of Medicare Primacy, many companies choose to go beyond in-house staff and hire consultants or professional service firms to avoid receiving Demand Letters and to collect money due them from Medicare.
How does a typical Medicare Primary Payer Analysis work? A good example would be work Health Decisions, Inc., did for a corporation that failed to submit the proper Medicare documents to its insurance company for possible claims recovery totaling more than $80,000. Health Decisions conducted an analysis of all of the company’s Medicare eligible cases.
Health Decisions analyzed 152 Medicare cases to determine if the company’s employees were active or retired, and to see if the claims had been coordinated with Medicare appropriately. Some 129 cases with claims totaling $2,024,820 were identified as having been coordinated correctly.
After applying Health Decisions’ expert review, it was learned some $80,726 in claim payments were incorrectly coordinated with Medicare. This was a significant recovery the employer would have been unable to document without outside assistance.