Statute of Limitations on CMS Conditional Payment recovery

Statute of Limitations on Conditional Payment recovery.
When an injured employee receives medical care and the Social Security Administration pays a medical expense under the Medicare program, a "conditional payment" is created.

Where a "primary  plan" under subsection (A) (ii) has not made payment with respect to an item or service promptly, Medicare may make "conditional payments" and then seek reimbursement from the "primary plan".  See: 42 USC Section 1395Y (b)(2)(B)(i).

"A primary plan's responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon the recipient's compromise, waiver or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan ...". See: id.

To protect Medicare's rights and the parties from liability to Medicare, a "lien inquiry" letter should be sent to determine whether payments have been made and need to be repaid.

The "Medicare Secondary Payer Recovery Portal" (MSPRP) is a web-based tool to assist the Workers' Compensation insurer in accessing and securing information regarding any conditional payments.

One of the difficulties in obtaining a "final" closure of a work comp case was the future possibility that there could be a Social Security (Centers for Medicare and Medicaid Services) CMS request for conditional payment reimbursement. A number of Federal District court cases addressed this "statute of limitations" issue in different fashions. The decision at United States v. Stricker, (filed December 1, 2009) addressed the government action for recovery of conditional payments after an injury settlement. That Court interpreted the Federal Claims Collection Act to apply a three (3) year "tort" statute of limitation for the corporate (insurer) defendants and applied a six (6) year "contract" statute of limitation for claims against the plaintiff attorneys. Uncertainty prevailed.

As of Wednesday July 10, 2013 there will be a limit upon an action for recovery of any conditional payment.

An action for recovery of a conditional payment cannot be pursued if it is more than three (3) years from the date of notice to CMS of the settlement, judgment or award.

• The settlement date must occur after July 10, 2013.
• CMS must be place on notice of the settlement or award.

This section of the SMART Act will provide the workers' compensation insurer with finality regarding conditional payment issues.

Query: Will the Mandatory reporting requirements of Section 111 of the Medicare Secondary Payer Act eventually result in the extinction of any "conditional payments" as Medicare will have access to information as to which employee has a liability, auto or work comp case pending?