How to Navigate Conditional Payment Resolution

Medicare conditional payments are a persistent challenge for personal injury firms resolving cases for Medicare beneficiaries they represent. If a client is a Medicare beneficiary, you’re automatically dealing with the Medicare Secondary Payer Act (MSPA). The stakes are high. A misstep can expose lawyers and the firm to liability, government enforcement, and impact your client’s Medicare eligibility.  Here’s how to approach conditional payment resolution with clarity and control.

Understand What Medicare Is Entitled To

Medicare is a secondary payer. If a third party is responsible for medical costs, Medicare will pay conditionally, expecting reimbursement after settlement. CMS can recover from anyone who receives settlement funds, including lawyers and personal injury firms. It has the right to sue and collect double damages if a conditional payment is not properly addressed.

Start Early with the BCRC

Best practices are to begin the resolution process early, before resolution of the case. Contact the Benefits Coordination and Recovery Contractor (BCRC) to open a case and request a Conditional Payment Letter (CPL). This preliminary letter shows what Medicare has paid but isn’t a final demand. Still, it’s critical for auditing and identifying unrelated charges that shouldn’t be reimbursed.

Don’t Rely on the CPL

Once the case resolves, report the settlement to Medicare. Only then will Medicare issue a Final Demand. This is the amount you must pay, and it must be satisfied within 60 days. Fail to pay on time and you trigger interest above 10% and risk referral to the U.S. Treasury for collection.

Know the Resolution Methods

Medicare’s repayment formula under 42 C.F.R. § 411.37 provides limited relief for procurement costs but ignores liability facts, policy limits, and damages caps. If the math doesn’t work for your client, you have three options after paying the Final Demand:

1. Appeal – A four-stage internal process before reaching a federal judge. Slow, and interest accrues while you wait.
2. Compromise – Request a reduction based on equity, reviewed by CMS under the Federal Claims Collection Act.
3. Waiver – Apply for relief based on financial hardship or best interest of the program, via Sections 1870(c) or 1862(b) of the Social Security Act.

Successful waivers or compromises result in refunds to the beneficiary or their lawyer.

Avoid the Compliance Pitfalls

Relying on a CPL instead of a Final Demand is a documented risk. One firm paid $250,000 to settle claims after using a CPL that underreported the amount owed. Others have faced enforcement for failing to repay Medicare or resolve conditional payments after referring cases to co-counsel.

A pattern is clear: The government enforces Medicare’s reimbursement rights — regardless of firm size, intent, or delegation.

Build a Compliant Process

To stay protected:

• Identify Medicare beneficiaries early.
• Open files with the BCRC.
• Don’t disburse funds until receiving and paying the Final Demand.
• Audit CPLs for unrelated charges.
• Use compromise and waiver tools to maximize recovery for clients.
• Document all steps and client communications.

Why This Matters to You

Failure to address Medicare conditional payments can trigger malpractice claims, jeopardize settlements, and threaten eligibility for clients. More important, CMS’s enforcement actions show no tolerance for noncompliance.

Your firm’s reputation and financial exposure are at stake. Don’t treat Medicare compliance as an afterthought. Treat it as a legal obligation and a strategic advantage.

If you want to protect your clients and your practice, contact Synergy to explore how our Medicare resolution services support full MSPA compliance and help you close files with confidence.