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Medicare secondary payer (MSP)
This page provides an overview of the process a SEBB organization needs to take when Medicare bills the organization directly to recover costs considered payable through employer-sponsored coverage.
How does MSP work?
If Medicare pays primary for an employee or enrolled family member, Medicare may bill a SEBB organization directly to recover costs considered payable through the employer-sponsored coverage. Medicare holds employers primarily responsible for resolving MSP cases.
As stated in the initial demand packet you may not transfer this responsibility to the group health plan (GHP), its insurer, or any other entity. Although the Health Care Authority (HCA), SEBB, and the health plan can provide help in resolving these cases with your permission, Medicare ultimately holds the SEBB organization responsible.
What do we do?
The initial notices must be processed quickly but they do take time to research. Since we began our Voluntary Data Sharing Agreement (VDSA) with Medicare we have been able to dramatically reduce the number of MSP cases and are reporting the SEBB mailing address to Medicare so we can receive correspondence directly. Hopefully you will not see these demands for payment from Medicare. If you do, use the following process to resolve the MSP case.
Follow the MSP process to avoid penalty
The Centers for Medicare & Medicaid Services (CMS) Medicare Coordination of Benefits and Recovery (COB&R) and their Commercial Repayment Center (CRC) is the contractor for Medicare that issue demands for payment on MSP cases. If you receive a Medicare Secondary Payer Demand Packet from CMS and the COB&R, to avoid a penalty:
- Immediately send all MSP notices (including secondary notices) along with the letter indicating the dates the employee and/or covered family members were eligible for SEBB coverage to:
Attention Norm Rice
PO Box 42684
Olympia, Washington 98504-2684
- If you have questions regarding MSP notices, please call Norm at 360-725-0834 or email email@example.com.
Be timely: 60-day window until collection begins
Timing is extremely critical on these demand packets. It is imperative that these do not sit on someone’s desk without action. CMS COB&R has good information on their Group Health Plan Recovery webpage. Please make sure that you have a primary and secondary person who understands the process and can respond within the timeframes outlined in the letters you receive from CMS COB&R. Unless an MSP case is resolved by full payment or a valid defense within 60 days, interest on the debt begins to accrue on day 61. Partial payment or partial defense does not stop the timeline.
What happens if we miss the deadline?
On day 61 an Intent to Refer (ITR) letter is generated giving notice that it is the intention of the CMS COB&R to refer the debt to the US Treasury for collection. You can still mount a defense to the ITR letter, but if full payment or valid defense is not received by day 240, the debt is referred to the US Treasury.
Federal law allows the US Treasury to collect on unresolved debts and if you receive federal funding for any program, they can intercept those funds to satisfy an MSP debt. This has happened in recent years to a number of agencies. It is crucial that these cases be resolved quickly. Once a case gets to the US Treasury for collection, you have only 10 days to dispute the debt before Treasury can start collecting. Once the funds are taken from your agency it is a long, tedious, and near impossible task to recover those funds.
It cannot be over-emphasized the importance of getting these resolved within the first 60 days, if possible. This may mean that you need to train anyone receiving mail in your SEBB organization to:
- Recognize any of these letters sent by the CMS COB&R or the US Treasury.
- Handle them with the highest priority.
- Get them to the right person in your SEBB organization to contact Norm Rice at the HCA.
- On the US Treasury letters or letters from one of their private collection agencies, they assign their own identification number and they do not list the name of the individual in the collection notice. You will need to contact Norm Rice for help with this.
- Medicare data match requests must be completed by the employing SEBB organization.