Insurers Can Negotiate CPD Letters To Realize Savings

Saturday, January 24, 2009 | 0

By John Williams

As most already know, Mandatory Insurer Reporting (MIR) will allow the government to easily identify any unresolved conditional payments and the primary payers that are responsible for them. In the past, many settlements contained language that placed the burden of reimbursement to the plaintiff.  

The fact is, that if the plaintiff does not pay Medicare within 60 days post-settlement, Medicare has the statutory right to recover from the primary payer even though the primary payer has already paid the plaintiff (42 CFR 411.24 (i) (1-2)).
 
Recognizing this exposure, most primary payers are becoming diligent in discovering conditional payments and seeking to negotiate the amount with Medicare prior to settlement. 

This has given rise to a huge increase in demand for conditional payment negotiation services.
 
Caution: A large number of primary payers have contacted our firm with questions about vendors who seek to charge a percentage of savings, as much as 15%, on the reduction of the conditional payment demand amount.

This type of fee structure is egregious, as virtually every Conditional Payment Demand (CPD) letter from Centers for Medicare & Medicaid Services (CMS) is over-inflated and can be reduced through competent negotiation.
 
In one recent example a carrier reported to us that they had compared Gould & Lamb's flat rate, capped fees to negotiate conditional payments against a vendor that charged a percentage of reduction and discovered that G&L had a higher savings and a service fee that was $34,145.00 less.
 
In a time when insurers are already being burdened with massive increases in conditional payment demand letters from CMS, it is clear that they need partners in compliance who can assist in navigating these challenging waters. 

While it is necessary for primary payers to discover and reimburse conditional payments, all conditional payment demand letters should be carefully reviewed before payment and in many cases negotiated to a lower amount.

<i>John Williams is chief executive officer of Gould & Lamb LLC, a medical-financial services company for the workers' compensation industry in Bradenton, Fla., that specializes in Medicare set-asides.</i>