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The Medicare Secondary Payer Act requires primary payers, including workers’ compensation carriers, to reimburse Medicare for payments it made for healthcare for which the primary payer was responsible. Many carriers have reported seeing an increase in secondary payer recovery activity by Medicare, particularly with regard to demands for reimbursement of services that bear no relation to the compensable injury.
For example, on a low back sprain/strain claim, the carrier may receive a demand for reimbursement of services for treatment of COPD, diabetes, or other ordinary diseases of life. In other cases, the provider’s bill may list a compensable diagnosis code but no treatment was actually provided for that condition. Finally, in some instances treatment may have been provided for both related and non-related conditions, yet the carrier receives a demand for the full amount.
It appears that in many instances Medicare is not making an initial determination about whether and to what extent the services it paid for were actually for the compensable injury. If the beneficiary has a prior workers’ compensation claim, Medicare simply sends a demand letter. InCIGA v. Burwell, a federal district court case out of California, decided January 5, 2017, the court rejected Medicare’s argument that the primary payer is responsible for both the related and unrelated conditions when the provider combines the services into a single charge. According to the court, Medicare must attempt to apportion the charges between related and non-related services.
The court also held that Medicare is bound by state law in determining whether the insurance carrier is required to reimburse Medicare. The Fifth Circuit Court of Appeals reached the same conclusion inCaldera v. Ins. Co. of the State of Pa., decided in 2013. Therefore, if Medicare contends that a disputed condition for which it paid for treatment is related to the compensable injury, the proper forum for resolving that dispute would be the administrative dispute resolution process provided by the Texas Workers’ Compensation Act. So far, however, it does not appear that Medicare has attempted to invoke the Division’s dispute resolution process.
The Division’s involvement would be welcomed to help address the problems carriers are having with Medicare reimbursement claims. In 2014, then Commissioner Rod Bordelon wrote a letter to Medicare to address a related problem in which Medicare would not pay for medical services because the Medicare beneficiary had a previous workers’ compensation claim. Topics to be addressed in a new letter may include facilitating a process to better identify the compensable injury and related services before a blanket demand letter is sent, and, in the event of a disagreement, clarifying the process for resolving that dispute. For example, do Medicare or Medicare/Medicaid managed care providers meet the definition of a “health care insurer” under section 409.0091 such that they are required to follow Labor Code section 409.0091 and submit a DWC-026 healthcare insurer reimbursement form? --James Loughlin, Stone Loughlin & Swanson, LLP