Medicare’s Recovery Process
Medicare does not pay for items or services to the extent that payment has been, or may reasonably be expected to be, made through a liability insurer (including a self-insured entity), no-fault insurer or workers' compensation entity (Non-Group Health Plan (NGHP). When an accident/illness/injury occurs, you must notify the Benefits Coordination & Recovery Center (BCRC).
The BCRC is responsible for ensuring that Medicare gets repaid for any conditional payments it makes. A conditional payment is a payment Medicare makes for services another payer may be responsible for. Medicare makes this conditional payment so you will not have to use your own money to pay the bill. The payment is "conditional" because it must be repaid to Medicare when a settlement, judgment, award, or other payment is made. For information on when to contact the BCRC for assistance with Medicare recovery, click the Non-Group Health Plan Recovery link. This link can also be used to access additional information and downloads pertaining to NGHP Recovery.
The process of recovering conditional payments from the Medicare beneficiary typically, involves the following steps:
1. Reporting the case to the BCRC:
Whenever there is a pending liability, no-fault, or workers’ compensation case, it must be reported to the BCRC. Reporting the case is the first step in the Medicare Secondary Payer (MSP) NGHP recovery process. Click the Liability, No-Fault and Workers’ Compensation Reporting link for more information.
Once the case has been reported, the BCRC will collect information from multiple sources to research the MSP situation, as appropriate (e.g., information is collected from claims processors, Medicare, Medicaid, and SCHIP Extension Act (MMSEA Section) 111 Mandatory Insurer Reporting submissions, and worker’s compensation entities).
If the BCRC determines that the other insurance is primary to Medicare, they will create an MSP occurrence and post it to Medicare’s records. If the MSP occurrence is related to an NGHP, the BCRC uses that information as well as information from CMS’ systems to identify and recover Medicare payments that should have been paid by another entity as primary payer.
2. BCRC issues a Rights and Responsibilities letter:
After the MSP occurrence is posted, the BCRC will send you the Rights and Responsibilities (RAR) letter. The RAR letter explains what information is needed from you and what information you can expect from the BCRC. A copy of the Rights and Responsibilities Letter can be found in the Downloads section at the bottom of this page. Please note: If Medicare is pursuing recovery directly from the insurer/workers’ compensation entity, you and your attorney or other representative will receive recovery correspondence sent to the insurer/workers’ compensation entity. For more information on insurer/workers’ compensation entity recovery, click the Insurer Non-Group Health Plan Recovery link.
Medicare does not release information from a beneficiary’s records without appropriate authorization. If you have an attorney or other representative, he or she must send the BCRC documentation that authorizes them to release information. Your attorney or other representative will receive a copy of the RAR letter and other letters from the BCRC as long as he or she has submitted a Consent to Release form. A Consent to Release authorizes an individual or entity to receive certain information from the BCRC for a limited period of time. With that form on file, your attorney or other representative will also be sent a copy of the Conditional Payment Letter (CPL) and demand letter. If your attorney or other representative wants to enter into additional discussions with any of Medicare’s entities, you will need to submit a Proof of Representation document. A Proof of Representation authorizes an individual or entity (including an attorney) to act on your behalf. Note: In some special circumstances, the potential third-party payer can submit Proof of Representation giving the third-party payer permission to enter into discussions with Medicare’s entities. If potential third-party payers submit a Consent to Release form, executed by the beneficiary, they too will receive CPLs and the demand letter. It is in the best interest of both sides to have the most accurate information available regarding the amount owed to the BCRC. Please see the following documents in the Downloads section at the bottom of this page for additional information: Proof of Representation vs. Consent to Release, Proof of Representation Model Language and Consent to Release Model Language.
3. BCRC identifies Medicare’s interim recovery amount and issues the CPL:
The BCRC begins identifying claims that Medicare has paid conditionally that are related to the case, based upon details about the type of incident, illness or injury alleged. Medicare's recovery case runs from the “date of incident” through the date of settlement/judgment/award (where an “incident” involves exposure to or ingestion of a substance over time, the date of incident is the date of first exposure/ingestion).
Within 65 days of the issuance of the RAR Letter, the BCRC will send the CPL and Payment Summary Form (PSF). The PSF lists all items or services that Medicare has paid conditionally which the BCRC has identified as being related to the pending case.
The CPL explains how to dispute any unrelated claims and includes the BCRC’s best estimate, as of the date the letter is issued, of the amount Medicare should be reimbursed (i.e., the interim total conditional payment amount). The conditional payment amount is considered an interim amount because Medicare may make additional payments while the case is pending. If there is a significant delay between the initial notification to the BCRC and the settlement/judgment/award, you or your attorney or other representative may request an “interim conditional payment letter” which lists the claims paid to date that are related to the case. For more information about the CPL, refer to Conditional Payment Letters (Beneficiary) in the Downloads section at the bottom of this page.
You can also obtain the current conditional payment amount from the BCRC or the Medicare Secondary Payer Recovery Portal (MSPRP). To obtain conditional payment information from the BCRC, call 1-855-798-2627. Click the MSPRP link for details on how to access the MSPRP.
4. BCRC issues a Conditional Payment Notification (CPN):
If a settlement, judgment, award, or other payment has already occurred when you first report the case, a CPN will be issued. A CPN will also be issued when the BCRC is notified of settlement, judgement, award or other payment through an insurer/workers’ compensation entity’s MMSEA Section 111 report. The CPN provides conditional payment information and advises you on what actions must be taken. You have 30 calendar days to respond. The following items must be forwarded to the BCRC if they have not previously been sent:
- Proof of Representation/Consent to Release documentation, if applicable;
- Proof of any items and services that are not related to the case, if applicable;
- All settlement documentation if the beneficiary is providing proof of any items and services not related to the case;
- Procurement costs (attorney fees and other expenses) the beneficiary paid; and
- Documentation for any additional or pending settlements, judgments, awards, or other payments related to the same incident.
If a response is received within 30 calendar days, it will be reviewed and the BCRC will issue a demand (request for repayment) as applicable. If a response is not received in 30 calendar days, a demand letter will automatically be issued without any reduction for fees or costs. For more information about the CPN, refer to the document titled Conditional Payment Notice (Beneficiary) in the Downloads section at the bottom of this page.
5. Dispute Process:
If you or your attorney or other representative believe that any claims included on CPL/PSF or CPN should be removed from Medicare's interim conditional payment amount, documentation supporting that position must be sent to the BCRC. This process can be handled via mail, fax, or the MSPRP. Click the MSPRP link for details on how to access the MSPRP. The BCRC will adjust the conditional payment amount to account for any claims it agrees are not related to the case.
Please allow 45 calendar days for the BCRC to review the submitted disputes and make a determination. During its review process, if the BCRC identifies additional payments that are related to the case, they will be included in a recalculated Conditional Payment Amount and updated CPL. If CMS determines that the documentation provided at the time of the dispute is not sufficient, the dispute will be denied. You and your attorney or other representative will receive a letter explaining Medicare’s determination once the review is complete.
Note: When resolving a workers’ compensation case that may include future medical expenses, you need to consider Medicare’s interests. The recommended method to protect Medicare’s interests is a Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA). A WCMSA is a financial agreement that allocates a portion of a workers’ compensation settlement to pay for future medical services related to the workers’ compensation injury, illness or disease. For more information regarding a WCMSA, please click the WCMSA link.
6. BCRC issues a recovery demand letter:
When there is a settlement, judgment, award, or other payment, you or your attorney or other representative should notify the BCRC. The information sent to the BCRC must clearly identify: 1) the date of settlement, 2) the settlement amount, and 3) the amount of any attorney's fees and other procurement costs borne by the beneficiary (Medicare may only take beneficiary-borne costs into account). When submitting settlement information, the Final Settlement Detail document may be used. This document can be found in the Downloads section at the bottom of this page. Contact information for the BCRC can be found by clicking the Contacts link. Settlement information may also be submitted electronically using the MSPRP. Click the MSPRP link for details on how to access the MSPRP.
The BCRC will apply a termination date (generally the date of settlement, judgment, award, or other payment) to the case. The BCRC will identify any new, related claims that have been paid since the last time the CPL was issued up to and including the settlement/judgment/award date. Once this process is complete, the BCRC will issue a formal recovery demand letter advising you of the amount of money owed to the Medicare program. The amount of money owed is called the demand amount. The demand letter includes the following:
- The beneficiary’s name and Medicare Number;
- Date of accident/incident;
- A summary of conditional payments made by Medicare; and
- The total demand amount and information on applicable waiver and administrative appeal rights.
For additional information about the demand process and repaying Medicare, click the Reimbursing Medicare link. Also, if you are settling a liability case, you may be eligible to obtain Medicare’s demand amount prior to settlement or you may be eligible to pay Medicare a flat percentage of the total settlement. Please see the Demand Calculation Options page to determine if your case meets the required guidelines.
7. Assessment of Interest and Failure to Respond
Interest accrues from the date of the demand letter and, if the debt is not repaid or otherwise resolved within the time period specified in the recovery demand letter, is assessed for each 30 day period the debt remains unresolved. Payment is applied to interest first and principal second. Interest continues to accrue on the outstanding principal portion of the debt. If you request an appeal or a waiver, interest will continue to accrue. You may choose to pay the demand amount in order to avoid the accrual and assessment of interest. If the waiver/appeal is granted, you will receive a refund.
Failure to respond within the specified time frame may result in the initiation of additional recovery procedures, including the referral of the debt to the Department of Justice for legal action and/or the Department of the Treasury for further collection actions.
Checks should be made payable to Medicare. All correspondence, including checks, must include your name and Medicare Number and should be mailed to the appropriate address.
8. Referral of debt to the Department of Treasury
You will be notified of a delinquency through an Intent to Refer letter (a notice of the BCRC’s intent to refer the debt to the Department of Treasury Offset Program for further collection activities). The Intent to Refer letter is sent day 90 (after demand letter) if full payment or Valid Documented Defense is not received.
If full repayment or Valid Documented Defense is not received within 60 days of Intent to Refer Letter (150 days of demand letter), debt is referred to Treasury once any outstanding correspondence is worked by the BCRC. Note: CMS may also refer debts to the Department of Justice for legal action if it determines that the required payment or a properly documented defense has not been provided. The law authorizes the Federal government to collect double damages from any party that is responsible for resolving the matter but which fails to do so.
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|2010-09-29||Proof of Representation Model Language
|2010-09-29||Consent to Release Model Language
|2010-09-29||Final Settlement Detail
|2010-09-29||NGHP Correspondence Cover Sheet - BCRC
|2012-05-03||No-Fault Case Closure Detail
|2013-08-21||NGHP - How Interest is Calculated
|2015-10-01||Beneficiary NGHP Recovery Process Flowchart
|2015-10-05||NGHP - Interest Calculation Estimator Tool
|2015-10-05||Reporting a Case to the BCRC
|2015-10-05||POR vs CTR