You Can’t Force a Hospital to Accept a Medicare Conditional Payment

Medicare Set-Aside Blog on March 15, 2013 | Posted by


The whole point of the MSP is to keep Medicare from making payments that someone else is responsible for. Conditional payments exist only to ensure treatment will be provided while insurance issues are being dealt with as it reassures a medical provider that payment is available if the insurer does not make a timely payment. But there is nothing that obligates a provider to request a conditional payment simply because the patient is a Medicare beneficiary. A provider actually has the option to hold out for their full fee and assert a lien under state law against any insurance proceeds, or accept a Medicare conditional payment at the Medicare fee schedule, typically the lowest rate accepted. If the provider does not elect to bill Medicare within a year, then it can only recover against insurance proceeds and if no insurance payment is ever made or the jury favors the defendants, the provider will get paid nothing. It is a gamble and the decision is the providers alone to make. The Medicare beneficiary has no say in the matter.

The Court of Appeals of Wisconsin released an opinion yesterday denying just such a claim by a Medicare beneficiary that the hospital in which he was treated following an auto accident should have billed Medicare, relying upon a 2000 CMS memo referencing the Provider Agreement Statute. The statute prohibits providers participating in the Medicare system from charging any individual or other person for services which the patient is entitled to have payment made by Medicare. What the plaintiffs failed to realize is that the MSP statutorily prohibits Medicare from making payment when insurance is available and because the hospital never elected to request a conditional payment by Medicare, Medicare laws are not even in play here. The plaintiff was not entitled to payment by Medicare because of the auto insurance, therefore the Provider Agreement Statute was not applicable.

This opinion is 14 pages long and beyond being a must read for anyone who enjoys reading about how CMS memos are not always an accurate interpretation of the Medicare laws, there is a lot of great analysis about Medicare billing and the MSP. But one has to question what plaintiff hoped to accomplish by pursuing this claim this far. Even if Medicare had been billed, he would still have to make reimbursement. While that would be at a lesser rate, we are only talking about $19,423.26 to begin with. I certainly hope there was more to this story (particularly because CMS is a surrogated-plaintiff), otherwise it is apparent that significant amount of judicial resources were exhausted trying to make Medicare make a statutorily prohibited payment so that the plaintiff could net a little more of his insurance settlement.


CONRADLASKA, PLAINTIFF-APPELLANT,CMS, SUBROGATED-PLAINTIFF, V.
GENERAL CASUALTY COMPANY OF WISCONSIN AND
METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY, DEFENDANTS,
PROGRESSIVE NORTHERN INSURANCE COMPANY AND MIDWEST SECURITY ADMINISTRATORS, INC., SUBROGATED DEFENDANTS,
UNIVERSITY OF WISCONSIN HOSPITAL AND CLINICS AUTHORITY, SUBROGATEDDEFENDANT-RESPONDENT
Appeal No. 2010AP2410
COURT OF APPEALS OF WISCONSIN, DISTRICT FOUR
2013 Wisc. App. LEXIS 234
March 14, 2013, Decided