New Medicare Policy - Providers may now "bill" the liability insurer / injured client
In May 2006, significant changes were made to the Medicare regulations concerning Providers’ ability to “bill” the liability insurance proceeds. Medicare Participating Providers may now wait and bill the beneficiary (liability settlement) for the actual charges. Previously, Participating Providers were required to bill Medicare, as “billing” against the settlement proceeds was, in effect, the same as billing the beneficiary, which was a violation of the Participating Provider “assignment agreement”.
Effective May 8, 2006, CMS Medicare issued a policy change to the billing procedure for providers, physicians and suppliers with regards to payment for services where liability insurance is available.
Previously, Medicare participating providers, physicians and suppliers (hereafter “Providers”) were required to bill Medicare conditionally for injury-related claims and accept the Medicare approved amount as payment in full if they could not expect payment from the liability insurer within 120 days. Providers could only charge the beneficiary for the coinsurance and deductible amounts. With the policy change, Providers may now pursue payment from the plan covering the liable third party and they may charge the beneficiary (client) actual charges up to the amount of the liability proceeds, less procurement cost. Providers cannot attempt to collect payment until the client has received the settlement funds.
In the event that the Providers choose to pursue the liability insurer and issue a lien they may not charge the beneficiary/client any interest, administrative fees or any costs associated with the filing of the lien.
Under the new policy, non-participating Medicare Providers, who are allowed to submit unassigned claims to Medicare, may only pursue the liability insurance for the Medicare limiting charge amount, which is 115% above the Medicare allowed amount. (Unlike participating providers, who must accept assignment of all claims, non-participating Providers DO NOT have an agreement with Medicare to accept assignment on all claims or to accept the Medicare approved amount as payment in full). Non-participating Providers may charge the beneficiary the limiting charge amount at the time service is rendered and the beneficiary will receive reimbursement from Medicare.
For non-covered Medicare services (i.e. treatment or services that Medicare determines are not medically necessary, such as ambulance transportation to a doctor’s office, routine dental care or procedures, cleaning, fillings, extractions or dentures) Providers may charge the beneficiary/client for actual charges prior to the settlement proceeds being available. This rule applies to both Participating and Non-Participating Medicare Providers.
Waiting for settlement proceeds to be disbursed to the beneficiary/client is not always feasible for the Providers. In our firm’s lien resolution practice group, however, we see that Providers are choosing not to bill Medicare and are waiting until settlement (especially in high profile, high damage liability cases) in an effort to increase their cash flow.
If you have any questions about how this new policy may impact your cases, feel free to contact Mary Skinner in our firm’s Charlotte Office. Mary is the Supervisor over our lien resolution team.
