WITNESSES OUTLINE FAILURE OF SECONDARY PAYER SYSTEM TO COLLECT FUNDS ON BEHALF OF TAXPAYERS

Secondary Payer Hearing 1

Secondary Payer Hearing 2

Washington, Jun 22 - Rep. Cliff Stearns (R-FL), chaired a hearing today in his Oversight and Investigations Subcommittee of the House Energy and Commerce Committee on Medicare's Secondary Payer system. "The Secondary Payer system recovers funds for Medicare from insurance companies and beneficiaries that are responsible to be the primary payer," said Stearns.

Deborah Taylor, Chief Financial Officer and Director of the Office of Financial Management, Centers for Medicare and Medicaid Services (CMS), was unable to answer numerous questions, much to Stearns disappointment. "It seems that since you are the CFO, chief financial officer, a lot of the questions we asked you should have known; for example: (1) number of claims for small dollar amounts outstanding; (2) the response time for getting information and payments to beneficiaries; (3) median amount of money involved with the 413,000 outstanding cases; (4) the threshold for not seeking funds; (5) no idea how much CMS is failing to collect; (6) failure to provide duration time for the claim settlement – ‘you didn't have any idea.'"

The second panel of witnesses outlined many of the problems they have dealing with CMS. Marc Salm, Vice President, Risk Management, Publix Super Markets, Inc., testified, "No matter how small the amount, however, CMS still pursues each and every claim, even when its costs of collection are vastly greater than the amount it will collect. For example, if it costs Medicare $350 in contractor and staff tine to collect a single claim, taxpayers and the Medicare program are clearly losing money if CMS pursues recoveries below this amount. Yet, Medicare is pursuing cases for $1.59!" Another witness noted that CMS spent 14 months pursuing $16.

Scott Gilliam, Vice President, Cincinnati Insurance Company, also noted the difficulties in getting information from CMS. Gilliam noted the lack of responsiveness of the Medicare Secondary Payer Recovery Contractor, "We are waiting for final demand letters from them for 11 months, 12 months, 14 months, 18 months, 6 months, 6 months, 7 months, 7, 7, and 8 – they never send letters. We are on hold [on the telephone] for 56 minutes or an hour or 90 minutes."

In conclusion, Stearns stated that he would likely hold another hearing in the future. He also entered into the record the case of Mollie Coury, who at age 81 was injured in an auto accident in 1995. Thirteen years later, Medicare demanded $66,000 because she received an insurance settlement of $20,000. Medicare then proceeded to seize her only income, a monthly social Security check for $498 while she was 94 years old.