Conditional payments are usually discussed along with WCMSAs, but in reality conditional payments have nothing to do with WCMSAs.  A conditional payment is any payment that the Centers for Medicare & Medicare Services (CMS) has improperly paid on behalf of a Medicare beneficiary.  The payment is made by CMS on the "conditional that" CMS will be paid back at the time of settlement.

Example: Mr. Smith is injures his knee while working.  Mr. Smith goes to Doctor "A" and starts receiving treatment for his injured knee. The employer is paying for Doctor "A" in accordance with the state's workers' compensation (WC) laws.  At some point in time Mr. Smith decides that he would rather treat with Doctor "B" and uses his Medicare benefits to pay for Doctor B. Mr. Smith doesn't tell his employer that he is using Doctor B's services.  Doctor B bills Medicare for the services rendered to Mr. Smith.  CMS, however, considers these payments "conditional" and expects to be paid back if Mr. Smith settles his WC case with his employer.

So how do you find out if an employee has been improperly using his Medicare benefits to pay for WC related expenses?  You start an inquiry with the Coordination of Benefits Contractor (COBC) in New York by submitting a request for conditional payment information.   Click here to learn how to submit the necessary information to the COBC.  The COBC doesn't actually process the request.  The COBC enters the request into a database.

The actual processing is done by another entity called the Medicare Secondary Payer Recovery Contractor (MSPRC).  The MSPRC began processing these requests in October of 2006.  Its contact information is: 

                                MSPRC WC 
                                PO BOX 33831 
                                Detroit, Michigan 48232-383
                                866-677-7220 
                                734-957-0998 (fax) 
                                Hours: 8 am to 8 pm Mon.—Fri.

Once the MSPRC opens a file it will not generate a conditional payment amount until it receives a consent form properly executed by the Medicare beneficiary.  It takes about 2 to 3 months to obtain the conditional payment information.    

Important note. The CMS will only generate an estimated conditional payment amount before a WC case settles.  After a case settles, and the MSPRC receives a copy of the final settlement documents, then (and only then) will the MSPRC provide a final demand amount. This final demand amount can be lower or higher than the estimated conditional payment amount.  This is critical because the parties to a WC will never be provided with an accurate number before the WC case settles.  We recommend that the settlement documents take this factor into account by having a provision that specifies what party is responsible for the final demand amount, whatever that may end up being.