MIR-2006-7AB, July 2006

Collection of Fee-for-Service Payments Made During Periods of Managed Care Enrollment (Previously CR2801 Program Memorandum Transmittal AB-03-101) – MANUALIZATION

Provider Types Affected
Physicians, providers, and suppliers submitting fee-for-service claims to Medicare carriers, durable medical equipment regional carriers (DMERCs), fiscal intermediaries (FIs), and/or regional home health intermediaries (RHHIs) for services fur­nished to Medicare beneficiaries enrolled in Medicare Advantage (MA) Organizations

Impact on Providers
This article is based on Change Request (CR) 5105, which was issued to manualize the process that ensures that any duplicate payments for services rendered to Medicare beneficiaries are collected. CR5105 ensures that any fee-for-service claims that were approved for payment during a period when the beneficiary was enrolled in an MA Organization are submitted to the normal collection process used by the Medicare contrac­tors (carriers/DMERCs/FIs) for overpayments.

Background
The Centers for Medicare & Medicaid Services (CMS) pays for a beneficiary’s medical services more than once when a specific set of circum­stances occurs. When CMS data systems recognize a beneficiary has enrolled in an MA Organization, the MA Organization receives capitation payments for the Medicare beneficiary. In some cases, enrollments with retroactive payments are proc­essed.

The result is that Medicare may pay for the services rendered during a specific period twice:

• First, for the specific service which was paid by the fee-for-service Medicare contractor to the provider; and
• Second, by the MA Payment Systems in the monthly capitation rate paid to the MA plan for the beneficiary.

Overview of the MA Plan Enrollment Process
When an MA plan enrollment is processed retroactively:

• Fee-for-service claims with dates of service that fall under the MA plan enrollment period are identified by Medicare’s Common Working File (CWF); and
• An Informational Unsolicited Response (IUR) record is created.

In essence, the retroactive enrollment triggers a search for fee-for-service claims that were incorrectly paid for services rendered when the beneficiary was covered by the MA plan. If such claims are found, the system generates an adjustment and initiation by Medicare systems of overpayment recovery procedures. The current policy/procedures, as outlined in CR 2801 (Transmittal AB-03-101, dated July 18, 2003) and CR 5105, dictates that:

• Claims paid in error (due to enrollment or disenrollment corrections) will be adjusted, and
• Medicare contractors will initiate overpayment recovery procedures.

Because of the inherent retroactivity in the enrollment process, (e.g., beneficiaries can enroll in plans up to the last day of the month, and the effective date would be the first of the following month), the CWF may receive this information after the enrollment is effective. For this reason, these kinds of adjustments occur routinely.

A variety of the CMS systems issues over the past 18 months have prompted CMS to recently synchronize MA enrollment and disenrollment information for the period September 2003 to April 2006. As a result, providers may have claims that were affected by this synchronization. To see details of the impact of this synchronization on providers, please see MLN Matters article SE0638, which is available at http://www.cms.hhs.gov/MLNMattersArticles/downloads/SE0638.pdf on the CMS Web site.

When claims are identified as needing payment recovery, the related remittance advice for the claim adjustment will indicate Reason Code 24, which states: “Payment for charges adjusted. Charges are covered under a capitation agreement/managed care plan.” Upon receipt, providers are to contact the MA plan for payment.

• Providers who bill carriers will be alerted by their carrier (via letter or alternate method) of the following:

  • That the beneficiary was in an MA plan on the date of service;
  • That the provider should bill the managed care plan;
  • What the plan identification number is; and
  • Where to find the plan name and address associated with the plan number on the CMS Web site.
• For providers who bill FIs, the adjustment will occur automatically, and information on which plan to contact must be determined through an eligibility inquiry or by contacting the beneficiary directly.

In summary, CMS issued CR5105 to:

• Ensure that any fee-for-service claims that were approved for payment erroneously are submitted to the normal collection process used by the Medicare contractors (carriers, DMERCs, FIs, and RHHIs) for overpayments; and
• Instruct Medicare contractors to follow the instructions outlined in the Medicare Financial Management Manual (Pub.100-06, Chapter 3, Section 190), which is included as part of CR5105. Instructions for accessing CR5105 are in the Additional Information section of this article.

Implementation
The implementation date for the instruction is June 26, 2006.

Additional Information
For complete details, please see the official instruction issued to your carrier, DMERC, intermediary, or RHHI regarding this change. That instruction may be viewed at http://www.cms.hhs.gov/Transmittals/downloads/R97FM.pdf on the CMS Web site.

Also, if you have any questions, please contact your carrier/DMERC/intermediary/RHHI at their toll-free number, which may be found at http://www.cms.hhs.gov/MLNProducts/downloads/CallCenterTollNumDirectory.pdf on the CMS Web site

Disclaimer
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents.

MLN Matters Number: MM5105
Pub. 100-6, Transmittal# R97FM, CR# 5105
Related CR Release Date: May 26, 2006
Effective Date: October 1, 2003
Implementation Date: June 26, 2006

Do you have your NPI? National Provider Identifiers (NPIs) will be required on claims sent on or after May 23, 2007. Every health care provider needs to get an NPI. Learn more about the NPI and how to apply for an NPI by visiting http://www.cms.hhs.gov/NationalProvIdentStand/ on the CMS Web site.