MSPRC Announces Temporary Suspension of Rights and Responsibilities and Demand Letters

A few days ago the Medicare Secondary Payer Recovery Contractor (MSPRC) posted the following ALERT on its website:

News and Updates Alert: Issuance of the Rights and Responsibilities (RAR) and Demand letters has been temporarily suspended
Issuance of the Rights and Responsibilities (“RAR”) and Demand letters has been temporarily suspended while these letters are under review. The MSPRC is still working cases, and the RAR and Demand letters will be mailed out once appropriate revisions have been made.”

The MSPRC is a Medicare contractor with the responsibility of protecting the Medicare trust fund by identifying and recovering payments Medicare made when another entity had primary payment responsibility. The current contract is held by Chickasaw Nation Industries, Inc.

The RAR letter is the letter the MSPRC sends to the claimant, with a copy to the claimant’s counsel, when they learn that the claimant has made a claim against a workers’ compensation or other insurance plan. The letter explains the obligation to reimburse Medicare for conditional payments, asks for legal representation information, asks for information about the claim and the insurance carrier, asks that settlement information be forwarded if a settlement occurs, and explains that a conditional payment letter will be sent within 60 days showing conditional payments Medicare has made on the claimants behalf.

Demand letters are sent to claimants and insurers to formally advise the debtor of the amount of money due the Medicare program. They state the amount owned and that the debtor has 60 days to respond or the matter might be turned over to the US Department of Justice for legal action and/or the Department of Treasury for other collection action.

There is no official word as to why the MSPRC is reviewing these letters. But it seems likely that it is because of the court decision recently reached in Haro v. Sebelius (see May 16, 2011) where the U.S. District Court of Arizona ruled, in part, that CMS cannot collect disputed amounts from beneficiaries or attorneys.

The impact of this suspension will depend on how long it lasts. We have been experiencing a slowdown in MSPRC response times lately so our hope is that this additional delay is short-lived.
Medivest will provide updates as soon as we receive information that this temporary suspension is lifted.

To view the MSPRC Alert click here
To view the May 16, 2011 Haro v. Sebelius blog click here


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