With Medicare causing more and more delays in settlements today, a new fixed percentage option is welcome. Too bad it is only for smaller settlements. In November, the MSPRC announced a fixed percentage option for resolving conditional payments where the settlement is $5,000 or less. In those cases, the injury victim can resolve Medicare’s recovery claim by paying Medicare 25% of the total liability settlement instead of using the traditional recovery process. There are certain requirements that must be met in order to utilize this option which I will outline below. Importantly, when exercising this option the injury victim gives up the right to appeal the fixed payment amount or request a waiver of the recovery.
The option is now available. In order to elect this option, the following criteria must be met:
- The liability insurance (including self-insurance) settlement is for a physical trauma based injury. (This means that it does not relate to ingestion, exposure, or medical implant), and
- The total liability settlement, judgment, award, or other payment is $5000 or less, and
- The beneficiary elects the option within the required timeframe and Medicare has not issued a demand letter or other request for reimbursement related to the incident, and
- The beneficiary has not received and does not expect to receive any other settlements, judgments, awards, or other payments related to the incident.
When should the request be made to utilize this option? According to CMS, the fixed percentage option request must be submitted before or at the same time notice of settlement documentation is submitted (i.e., when requesting a final demand). If the request is made in response to a conditional payment notice (CPN), it must be received by the response due date referenced in the CPN. There is a “fixed percentage option election document” located in the attorney toolkit on the MSPRC’s website. The document must be completely filled out and mailed to the following address:
P.O. Box 13880
Oklahoma City, OK 73113
A request for the fixed percentage option may be denied if the case does not meet all of the required criteria discussed above. If the request is denied, the beneficiary will receive an explanation of why the request was denied. A regular demand letter is then issued separately. If the request is approved, the beneficiary will receive a bill for repayment of 25% of the total settlement, which must be paid in the timeframe specified on the bill.
While this option is only limited to settlements of $5,000 or less, it is helpful to have this “streamlined” resolution process in those smaller settlements. It is important to keep in mind that once this option is elected; there is no appeal or waiver of the recovery.
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