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Treasury Department Refers Conditional Payment Reimbursement Claims to Collection Agencies

The conditional payment recovery process shared by the Centers for Medicare and Medicaid Services (CMS) and the U.S. Department of the Treasury recently expanded to include private collection agencies. In late Fall of 2018 collection agencies began writing and phoning primary payers, attempting to collect alleged conditional payment debts on behalf of the Department of the Treasury. The collection agencies pursue recovery whether or not a conditional payment claim is in dispute. Contracting with a private collection agency is within the purview of the Department of the Treasury.

Fortunately, the collection agencies are receptive to notification and proof of pending disputes with the Commercial Repayment Center (CRC) over the legitimacy of alleged conditional payments. Once a collection agency has been notified and has received proof of a dispute, the debt is internally deemed “in dispute,” collection efforts cease, and the case is referred to the Department of the Treasury and ultimately to the CRC for adjudication. Adjudications have been swift, as compared to the CRC responses to initial disputes.

There are occasions where contact from the collection agency appears to be the first notice of an alleged debt. Under those circumstances, proof of debt can be requested from the collection agency which is obligated to provide it.
We continue to recommend that most of our clients decline to pay the alleged debts pending the outcome of disputes with the CRC, Treasury, or collection agencies. We recognize that clients receiving federal funding may choose to pay to avoid Treasury Offsets or further collection action. However, payment is not a concession of defeat. Even a paid conditional payment reimbursement request can be disputed if the primary payer maintains that the alleged debt was invalid.

Should you have any questions or require assistance navigating this latest development in conditional payment recovery, please do not hesitate to contact Nicole Graci, of our Conditional Payment Team at ngraci@hwcomp.com.

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