CMS Issues Alert Regarding Conditional Payment Recovery Thresholds

CMS, Conditional Payments, Mandatory Insurer Reporting, Medicare Set-Aside Blog on September 29, 2016
Posted by Jean S. Goldstein, JD, CMSP

Yesterday, CMS issued an alert implementing a $750 threshold for no-fault insurance and workers’ compensation entities that do not otherwise have an ongoing responsibility for medicals.  This new thresholds means that CMS will not seek recovery of conditional payments made on workers’ comp or no-fault claims falling under the $750 threshold, as long as there is no ORM.  In addition, CMS determined that it will maintain the $1,000 or less threshold for physical trauma-based liability insurance (including self-insurance) settlements, but keep in mind that the threshold does not apply to ingestion, implantation or exposure claims.

In arriving at both the new $750 threshold, and the determination to maintain the $1,000 threshold for physical trauma based liability insurance cases, CMS compared the estimated cost of collection per NGHP (Non-Group Health Plan) case, to the average demand per settlement range for these cases.  CMS estimated the average cost of collection for NGHP cases based upon 2015 data to be $421 per case.  As stated, CMS then examined the settlement in cases where the demand was closest to $421.  In order to arrive at the thresholds, CMS compared the cost of collection per NGHP case to the average liability insurance demand per settlement range, and did the same for the average no-fault insurance and workers’ compensation demand.  The estimated costs of collection for these cases averaged, $499 and $516, respectively.  Based upon this information, CMS determined the new $750 threshold for no-fault insurance workers’ compensation cases, and determined to maintain the $1,000 threshold for physical trauma based liability insurance settlements.

Although there have been no Alerts posted specifically on the NGHP Mandatory Insurer Reporting site, we expect an Alert to match this recovery policy and new threshold will be pending, as well.  We will certainly keep you updated.

The alert can be found here.

The threshold methodology can be found here.