Type of Savings - The intermediary reports data by type of savings as shown below

80.8 - Type of Savings - The intermediary reports data by type of savings as shown below (Rev. 6, 08-30-02) A3-3899.8 Unpaid (Cost Avoided) MSP Claims Unpaid (cost avoided) claims are those that the intermediary has returned without payment because it has strong evidence that another insurer is the primary payer and there is no indication that payment has been requested from that payer. The information indicating MSP involvement may be contained in the intermediary’s files, on the query reply, or on the claim itself. In addition, any information it obtains from a non-Medicare source and uses as the basis for claiming cost avoidance savings must meet the criteria in §80.6B. Information considered adequate for claiming cost avoidance savings includes statements on the claim noting "automobile accident," "collision", or the name of the automobile insurer. Another example would be previous information obtained showing EGHP coverage exits. The intermediary does not count claims it develops as "possible" MSP situations based on routine edits as cost avoidance savings unless it has previous information that another payer has primary responsibility. For example, "trauma code" edits are not, by themselves, considered strong evidence that Medicare is the secondary payer. Line 1 - Number - The intermediary reports the total number of cost avoided claims from which it is recording savings on the report. Line 2 - Dollar Value - The intermediary reports the total dollar value of the potential Medicare payments calculated for the claims on Line 1 that will be saved if the primary payer makes a payment which relieves Medicare of all payment liability. It shows as the amount cost avoided what Medicare would have paid. It does not count total charges as cost avoided savings. The cost avoided amount is the "Medicare payment rate" or the "current Medicare interim reimbursement amount" less any co-insurance amount applicable. It reduces Part B services subject to coinsurance for the coinsurance amount or it may use a "coinsurance reduction factor" of 19 percent to calculate coinsurance charges for all Part B services. It does not have to query for deductible status, but may assume that the deductible has been met. Tracking/Adjusting Cost Avoidance Savings Cost avoidance savings may not duplicate savings reported as full or partial recoveries and may not be shown where Medicare ultimately makes primary payment. To prevent duplicate counting, the intermediary suspends all claims it returns unpaid. It sets up a control on each claim returned for development. It maintains this control for 75 days, unless it receives further information before that time which allows it to process the claim. If no further information on the claim is received, it may deny the claim after 75 days. It is not required to continue tracking the claim, but retains the key identifying information on the claim, as described in §80.6A. CMS prefers the intermediary to show cost avoidance savings only after 75 days have elapsed. However, it has the option of counting the savings when the claim is initially suspended or at any time during the suspension period. If it chooses the latter alternative, it must adjust its cost avoidance savings if the claim is resubmitted during the suspension period with information showing it is not a legitimate cost avoidance. The following situations require special consideration if cost avoidance savings are counted before the 75 day suspense period has ended: • A claim returned (and counted as cost avoided) is paid in part by another payer and the provider resubmits it for secondary payment. • A claim returned (and counted as cost avoided) is denied by the other payer and the provider resubmits it for primary payment. • A claim returned (and counted as cost avoided) is paid in full by the other payer and the provider submits a no-payment bill. The intermediary shows "full recovery" savings and not cost avoidance. In these situations, it adjusts its cost avoidance savings figures by deducting or "backing out" the applicable amounts. It makes the adjustments in the reporting month in which a final determination is rendered. The following chart outlines the correct reporting of savings in each situation. ADJUSTMENTS TO REPORTED MSP COST AVOIDANCE SAVINGS CLAIMS PROCESSING ACTIONS MSP SAVINGS REPORTED Cost Avoidance Partial Recoveries Full Recoveries I. Partial Recovery Adjustment o MSP situation indicated. Medicare payment calculated to be $1200 if Medicare was primary payer. Claim is returned to provider. $ 1,200 o Provider resubmits the claim showing $900 paid by the other insurer. Medicare secondary payment of $300 is made. $ (1,200) * $ 900 II. "Other Payer Denial" Adjustment • MSP situation indicated - Medicare "primary" payment, $2,000. Claim is returned to provider. $ 2,000 • Other payer denies claim. Medicare found to be primary and Medicare payment of $2,000 is made. $ (2,000) * III. Full Recovery Adjustment • MSP situation indicated - Medicare "primary" payment, $900. Claim is returned to provider. $ 900 • Provider submits a "no-payment" bill showing full payment by the other payer. $ (900) * $ 900 *Amounts "backed out" of cost avoidance savings figures. Full Recoveries Line 3 - Number - The intermediary reports the number of full recoveries made during the month. Line 4 - Dollar Value - The intermediary reports the dollar value of full recoveries made during the month. Full Recoveries are claims where the primary payer made a payment that relieved Medicare of all payment liability. Full recoveries can be either prepayment or postpayment. The intermediary counts full recoveries in the month in which it recovers the full payment or receives a no-payment bill for prepayment full recovery cases. Where the "full recovery" is paid in installments, it counts the claim as pending until all monies have been received. Instructions for processing full recovery claims are in the Medicare Claims Processing Manual, Chapter 29, Coordination with Medigap insurers. A. Prepayment Full Recovery - A prepayment full recovery occurs when a primary payer makes full payment on a charge before Medicare makes any payment. EXAMPLE: A hospital identifies an EGHP as the primary payer, submits its charge to that insurer, and the EGHP pays the hospital's full cost. The intermediary subsequently receive a "no pay" bill in accordance with the Medicare Claims Processing Manual, Chapter 29, Coordination with Medigap insurers. It determines what it would have paid if the EGHP had not made payment and records that total as a full recovery savings. B. Postpayment Full Recovery - A postpayment full recovery occurs when a primary payer makes full payment on a charge after Medicare has paid. EXAMPLE: Medicare paid a hospital bill for charges incurred as a result of an automobile accident. Subsequently, an auto liability insurer reimburses the Medicare beneficiary for the full amount of the medical expenses and the beneficiary refunds that amount to the program. The intermediary counts the amount of Medicare's initial payment as a postpayment full recovery. The intermediary records as savings, that portion of a full recovery paid to an attorney or other agent as Medicare's share of the recovery cost. Consequently, there may be instances where it has made a full recovery but does not get back the full amount paid. When it refers a case to the RO for recovery action, however, it does not record any savings at that point. Savings from a compromise or "subrogation" case may be recorded only after a final determination. The intermediary does not count these cases for CPEP credit prior to final settlement. EXAMPLE: A beneficiary incurs a $1,000 physician's bill and a $5,000 hospital bill as a result of injuries sustained in an automobile accident. Assuming that all deductibles are satisfied, Part B pays $800 toward the physician's charges, and Part A covers the hospital bill in full. After litigation, a liability insurer agrees to pay $6,000 for the beneficiary's medical expenses from which the attorney takes a fee. (If the attorney's fee were 33 percent, the dollar recovery would be $4,000.) The Part B contractor can record $800 in Full Recovery savings. The intermediary is also allowed to count its payment as a Full Recovery savings even though the amount recovered, due to attorney's fees, does not equal what was paid. Partial Recoveries Line 5 - Number - The intermediary reports the number of partial recoveries made during the month. Line 6 - Dollar Value - The intermediary reports the dollar value of partial recoveries made during the month. Partial recoveries are those savings realized when a primary payer makes a payment which covers only a part of the Medicare allowable charge, leaving Medicare with a balance to pay. The intermediary uses the following formula in computing the savings from a partial recovery: • The dollar amount of Medicare benefits available for the services or supplies (calculated as if Medicare were the primary payer) less the Medicare benefits paid for the services or supplies, equals the partial recovery savings. (Primary Payment -Actual Payment = Partial Recovery Savings) The intermediary counts partial recoveries in the month when it takes final action on the claim (either making a payment supplemental to that of the primary payer or making a partial recovery from a payment by the primary payer). Instructions for processing partial recovery claims are in the Medicare Claims Processing Manual, Chapter 29, Coordination with Medigap insurers. It records as savings, that portion of a partial recovery paid to an attorney or other agent as Medicare's share of the recovery cost. When it refers a case to the RO for recovery action, however, It does not record any savings at that point. Savings from a compromise or "subrogation" case may be recorded only after a final determination. These cases may not be counted for CPEP credit prior to final settlement. Totals In this part of the report (lines 7 and 8), the intermediary reports data on the totals of unpaid claims plus full and partial recoveries. Line 7 - Claims - The intermediary reports the total number of MSP claims handled during the month. Line 8 - Dollar Value - The intermediary reports the total dollar value associated with MSP claims during the month. Pending Claims/Cases Line 9 - Number - The intermediary reports the number of pending claims/cases as of the close of the reporting month. It includes claims/cases for which "Full Recovery" is expected but all money due has not been received. Line 10 - Estimated Value - The intermediary reports the gross charges for all claims/cases reported as pending on line 9. Where "Full Recovery or Partial Recovery" has been determined, but all monies have not been received, it reports the gross charges until it receives the full amount due or it is reasonable not to expect further payments. A case is defined as one or more claims filed on behalf of an individual and related to one specific occurrence that necessitated medical care. When recording data for column 1 concerning WC and Auto Liability, and No Fault Insurance, the intermediary counts only cases. For Working Aged (column iii), ESRD (column iv), and Disabled (column vi), it counts each individual claim. A case/claim is pending only after it has been developed to the point where it is determined to be an MSP claim and no final resolution has been made. A partial or interim payment is not sufficient to remove a case/claim from the pending rolls. Final resolution occurs when there is no longer a practical expectation of further reimbursement. Remarks - The intermediary enters any comments relevant to the interpretation and analysis of the report. Signature - The report is signed by the individual responsible for its compilation. Date - The intermediary enters the Date that the report is completed and signed.