Many insurers and self-insureds are asking how to manage the repercussions of CMS’ decision to temporarily suspend issuing “Rights and Responsibilities” (RAR) letters and recovery Demand Letters.  Here are some suggestions while we all await further guidance from CMS and its contractors:
The suspension is temporary—presumably just long enough to allow CMS to re-write the standard letters to comply with the opinion released on May 5th in the Arizona case of Haro v. Sebelius (holding certain of CMS’ recovery practices exceed the authority granted by the MSP statutes, and enjoining CMS from: 1) demanding immediate payment from beneficiaries while the recovery amount is being challenged on appeal or a waiver request is pending; and 2) demanding that plaintiff attorneys withhold liability settlement proceeds from their clients pending payment of disputed MSP reimbursement claims).  Recall that even before the temporary suspension we didn’t really know when the MSPRC letters would arrive.  Delays have been the norm, and not knowing the length of the delay--while frustrating--is something we’ve all learned to manage in our claims handling.  We are aware, anecdotally, that some Demand Recovery Letters are being mailed out despite the suspension, so be watchful.  

The MSPRC is still working cases during the suspension, so although standard recovery letters will be delayed, concerns that the entire system will grind to a halt are exaggerated.

The requirement to protect Medicare’s interests, and the penalties for failing to do so, are in full force and effect despite delays in issuing demand letters, so standard MSP protocol should continue to be followed by claims staff. In other words, standard protocol for identifying Medicare beneficiaries should continue to be followed, as should standard protocol for:  

1. Notifying the COBC of new claims;
2. Obtaining Consent to Release forms (where possible);
3. Requesting (and updating) Conditional Payment Letters;
4. Settlements with Medicare beneficiaries should continue being negotiated, and the agreed-upon process for reimbursing Medicare and protecting Medicare’s interests should be memorialized in the written settlement agreement or release.  While we await further guidance on how the recovery process may be affected by the Haro v. Sebelius decision, consider negotiating a reimbursement procedure which gives the settling insurer/self-insured as much control as possible over payment of Medicare’s recovery demand;
5. When settlement is reached the MSPRC should be notified of the settlement and a Demand Letter should be requested (for separate discussion of §111 reporting under the MMSEA see comment below); and
6. Once the Demand Letter is received from the MSPRC, the insurer/self-insured should see to it the full amount identified is paid to Medicare within 60 days.    
Stay tuned, and watch for announcements on advising of any changes to the MSP recovery process, including revisions to the standard recovery letters.  Be aware that changes in the MSP recovery process are possible, and MSP best practices may need to adapt quickly once changes are announced.

Be aware that the temporary suspension of standard recovery letters has no effect whatsoever on §111 Reporting under the MMSEA. If your company has completed testing and has started live reporting (as most have), then quarterly reporting  of settlements, payments and judgments (ORMs and TPOCs) should continue. 


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