CHAPTER 19. MEDICAL CARE

SECTION A. MEDICAL CARE COST RECOVERY (MCCR)

19A.01 GENERAL

a. Title 38, U.S.C. 1729 (Pub. L. 99272 and Pub. L. 101508), authorizes the Department of Veterans Affairs (VA) to recover the reasonable cost of medical care furnished to a veteran for the treatment of a nonserviceconnected (NSC) disability or condition when the veteran or provider of treatment is eligible to receive payment for such treatment from a third party. All funds collected by VA from thirdparty payers for the treatment of insured veterans for NSC disabilities (except for tortfeasor claims) are to be credited to the VA Medical Care Cost Recovery Fund. Funds collected for tortfeasor claims are to be credited to Medical Care Appropriation Reimbursement 36_0160.

b. Title 38, U.S.C. 1710 and 1712 (Pub. L. 99272 and Pub. L. 101508), requires that VA collect certain fees, commonly referred to as Means Test copayments, from certain veterans (formerly referred to as Category B and Category C, now referred to as discretionary workload) who receive either inpatient or outpatient health care at its facilities. A discretionary workload veteran is one who does not have a serviceconnected disability or other eligibility and has completed the financial forms required to establish the Means Test which determined that he/she has income or assets above prescribed amounts and is considered able to defray expenses incurred for medical care. In addition to the Means Test copayment, discretionary workload veterans are also required to pay $10 per day for hospital care starting on the first day of care and $5 per day for nursing home care starting on the first day of confinement. All funds collected for Means Test copayments and for the additional per diem charges are to be credited to the U.S. Treasury as miscellaneous receipts.

c. Title 38, U.S.C. 1722A (Pub. L. 101508 and Pub. L. 102-568), requires that VA charge veterans who receive medications on an outpatient basis for the treatment of nonserviceconnected conditions, a copayment of $2.00 for each 30day or less supply of medication provided. Veterans receiving medications for treatment of serviceconnected conditions and veterans rated 50% or more service connected, and veterans whose annual income (as determined under 1503 of 38 U.S.C.) does not exceed the maximum annual of pension which would be payable to such veterans if such veterans were eligible for persion under section 1521 of 38 U.S.C. are exempt from the copayment requirement for medications. All funds collected for medication are to be credited to the VA Medical Care Cost Recovery Fund.

19A.02 THIRDPARTY RECEIVABLES UNDER FISCAL ACTIVITY JURISDICTION

a. Claims Generation

(1) The Claims Activity (the office responsible for generating claims) prepare claims, such as Uniform Bills, UB82's, to notify patients or appropriate third parties of accounts receivable established for VA provided reimbursable medical care as described in VA Manual M1, part I, chapter 15.

(2) The Claims Activity forwards claims for reimbursable medical care claims to the Fiscal activity for audit and release to the patient or appropriate thirdparty payer.

(3) Medical record documentation, i.e, Discharge Summary (Inpatient Care), (VA Form 101000), should be provided to the thirdparty payer only upon request. It is not necessary to attach medical record documentation routinely when submitting a claim.

Claims Followup

(1) The MCCR staff follows up on unpaid reimbursable insurance cases 45 days after the release of the initial claim. A copy of the claim form (no cover letter) with the heading "SECOND NOTICE" printed on the top of the page will be sent to the thirdparty payer. If no response is received, a second fiscal followup claim will be sent 30 days later with the heading "THIRD NOTICE" printed on the top of the page. At the time the third notice is sent, a telephone followup should also be made. The telephone followup should be documented to include, at a minimum, the name and telephone number of the person contacted, date of contact, and a brief summary of the conversation. If there is no response from the thirdparty payer within thirty days after the second followup (third notice), the case is to be referred to the District Counsel (DC) with a recommendation for suspension, write off, enforced collection, or a request for guidance.

(2) Whenever notification is received from a thirdparty payer that a claim has been paid, VA records are to be examined to determine if payment was received. If there is no evidence of payment, the thirdparty payer is to be requested to (a) send a copy of canceled check, or (b) issue a "stop payment" request and reissue payment. When a thirdparty payer provides a copy of the canceled check, prompt action must be taken to apply the collection to the receivable.

(3) Claim is Returned Without Payment. A claim may be returned for the following reasons:

(a) Claim form was not completed properly.

(b) Additional information is required to process the claim.

It is important that these issues be addressed promptly and the claim resubmitted for payment. The thirdparty payer may be contacted for clarification when necessary.

(4) Claim Payment is Denied. When a thirdparty payer claims that payments for VA medical care are not covered under the insurance policy or disclaims liability for other reasons, the Explanation of Benefits (EOB) should be reviewed by the MCCR Coordinator or designated MCCR staff. If it is determined that the claim denial is unjustified, the MCCR staff is to contact the thirdparty payer by telephone to request reconsideration. Following reconsideration, if the thirdparty payer agrees the claim denial was in error, the claim will be resubmitted to the thirdparty payer. If the thirdparty payer maintains that the claim denial was justified, the MCCR staff may request the advice of the DC. When it is determined that part or all of the claim if not valid, the claim will be contractually adjusted down.

c. Payment

(1) Payment in Full. Payment in full closes the case.

(2) Partial Payment. Payment by a thirdparty payer of an amount which is claimed to be the full amount under the terms of the applicable insurance policy or other agreement will normally be accepted as payment in full thereby closing the case. The balance (unpaid amount) is to be contractually adjusted down. However, if there is a question as to the validity of the reason given by the thirdparty payer for reduction of the reimbursed portion of the claim or if there is a considerable difference between the amount collected and amount established as the accounts receivable, the MCCR staff should take the following action(s):

(a) Review the Explanation of Benefits (EOB) to determine if the payment is in accordance with the veteran's health benefit coverage.

(b) If necessary, request the advice of the MCCR Coordinator and UM. The MCCR staff should contact the thirdparty payer by telephone or in writing if it is determined that there is potential error in the claim payment. When the thirdparty payer agrees that the original claim was not paid correctly, the claim should immediately be resubmitted for additional payment. If the thirdparty payer maintains that the claim was paid correctly and the MCCR Coordinator agrees, the balance of the claim is to be contractually adjusted down. However, if the MCCR Coordinator is still uncertain as to whether or not the claim was properly adjudicated, advice is to be requested from the DC.

d. Referrals to the DCs. Referrals to the DCs should only be made after reasonable recovery efforts have been made by the MCCR staff. However, the DC's play an active role in advising the medical facilities on legal problems arising from the MCCR program. Proper documentation must be submitted with all referrals. Thirdparty claims that exceed $600 (the $600 limit may be overlooked by DC's where the circumstances of a particular case so warrant) are referred to the DC's under the conditions listed below.

(1) If no response or payment is received from a thirdparty payer within 30 days after the second notification is sent. The referral to the DC should include a VA Form 119, Report of Contact, or a memorandum of the telephone followup with the thirdparty payer.

(2) If there is considerable difference between the claim payment amount and the amount claimed or if there is a question as to the validity of the reason given by the thirdparty payer for partial claim payment and the foregoing issues cannot be resolved by the MCCR Coordinator with support from Fiscal, MAS, and UM. The referral to the DC should include a VA Form 119, Report of Contact, or a memorandum of the telephone followup with the thirdparty payer.

(3) If the thirdparty payer disclaims liability or claims that payment for VA medical care is not covered under the veteran's insurance policy. If it is believed that VA has a valid claim, all information pertaining to the claim including a VA Form 119, Report of Contact, will be referred to the DC.

(4) If the thirdparty payer's denial advises that it does not pay Federal hospitals or does not pay when the insured has no underlying financial obligation for the cost of care. All information pertaining to the claim will be referred to the DC.

(5) If more than one thirdparty payer (or other type of third party) is involved and each disclaims responsibility payment of the claim. An attempt to resolve the coordination of benefits (COB) should be made before referral. If unsuccessful, all information pertaining to the claim will be referred to the DC.

e. Write Off. Unpaid thirdparty accounts receivable will be written off if they meet one or more of the following criteria.

(1) Payment is accepted for less than the amount of the original claim as a compromise under the FCCA; or

(2) No response or payment is received and the DC advises that the claim amount is uncollectible after the claim has been referred to them as instructed in subparagraph 19A.02d above; or

f. Interest and Administrative Costs. Interest and other charges are assessed on delinquent debts as detailed in chapters 7A and 7B.

19A.03 THIRDPARTY RECEIVABLES UNDER DISTRICT COUNSEL JURISDICTION

a. Claims Generation

(1) The Claims Activity prepares claims to recover payments from appropriate third parties for accounts receivable established for tortfeasor claims, workers' compensation, nofault insurance and crimes of personal violence as provided in VA Manual M1, part I, chapter 15. The claims are addressed to the DC.

(2) The Claims Activity forwards claims for tortfeasor cases, workers' compensation, nofault insurance and crimes of personal violence to the Fiscal activity for audit and for forwarding to the office of the DC. The claims state that payments are to be sent to the DC.

b. Claims Followup. The DCs follow up on unpaid accounts receivable under their jurisdiction including accrued interest and other charges.

c. Payments

(1) The DC's must forward (preferably handcarry) all payments to the nearest agent cashier on the same day that they are received in order to ensure that all payments are deposited in accordance with Treasury requirements. The cashier prepares a receipt for the DC who subsequently sends the receipt to the medical center where the charges originated. The DC's transmittal will clearly state that the amount received is in full or partial settlement and will list the related statements.

(2) Payment in full closes the case.

d. Write Off. Unpaid thirdparty accounts receivable under the jurisdiction of the DC's will be contractually adjusted down, written off, or referred for write off in full or in part, when advised by the DC of uncollectibility of the debt.

e. Interest and Administrative Costs. Interest and other charges are assessed on delinquent debts as detailed in chapters 7A and 7B.

19A.04 DISCRETIONARY WORKLOAD PATIENT MEANS TEST COPAYMENTS

It is important that discretionary care veterans are provided information regarding their responsibilities for copayments and given the opportunity to satisfy these obligations prior to leaving the medical facility. This will eliminate the need to process billings for means test copayments.

(1) Claims Generation. The Claims Activity prepares claims for discretionary workload NSC Means Test copayment debts and forwards them to the Fiscal activity for audit and release directly to the veteran. Collection letter, FL 4513, or other approved billing and collection form, must be attached to the initial claim.

(2) Claims Followup

(a) The MCCR Staff follows up on unpaid Means Test copayment debts at 30day intervals including the assessment of interest and other charges. As appropriate, second and third collection letters are attached to followup claims.

(b) In September of each year, unpaid Means Test copayment debts are to be consolidated with other unpaid medical care debts and if the total amount is $25 or more, the claim will be referred to the IRS in December for tax refund offset. (See chapter 23, Suspension of Collection Action and Write Off of Debts). Accounts in referral status to DOJ will not be referred for IRS offset.

(3) Referrals to the District Counsels/Department of Justice (DOJ). Means Test receivables will be referred to the DC or DOJ for enforced collection as detailed in chapters 24A and 24B.

(4) Write Off. The Fiscal activity is to write off or refer for write off delinquent Means Tests debts that meet the criteria as set forth in chapter 23, Writeoff of Debts and Suspension of Collection Action.

(5) Interest and Administrative Costs. Interest and other charges are assessed on delinquent Means Test copayment debts as detailed in chapters 7A and 7B.

19A.05 CLAIMS PROCESSING UNDER TWO OR MORE CATEGORIES

a. Discretionary Category and Reimbursable Insurance

(1) In cases where the cost of a veteran's medical care may appear to qualify for billing under reimbursable insurance and Means Test copayment (discretionary patients), the charges for discretionary care may be placed on hold until claims against the third party payer have been resolved.

(2) For collections on other than Medicare supplemental policies, when the thirdparty payer submits a partial claim payment that covers a portion of the cost of medical care and a portion of the copayment, the same percentage of payment will be applied to both the thirdparty reimbursement and the copayment. The veteran is then billed for the portion of the copayment not covered by the insurance company.

(3) On Medicare supplemental policies, the entire amount of the claim payment will be applied first to the copayment. However, to ensure that appropriate accounting of remittance is made, the EOB should be examined carefully.

b. Workers Compensation/TortFeasor and Copayment. The Claims Activity will prepare a claim to the thirdparty payer for all the medical care provided (including the copayment) for Workers' Compensation/TortFeasor claims, and will bill the veteran for the copayment at the same time. The claim to the thirdparty payer will include the following statement: "Gross amount includes the Means Test Copayment." If the veteran pays the copayment and all or a portion of the copayment is recovered from the thirdparty payer, a refund to the veteran is to be made promptly.

19A.06 MEDICATION COPAYMENT

a. General. Every effort should be made to collect the $2 medication copayment at the time the veteran receives the prescription. This action should be taken to preclude the need to claim for numerous small amounts. Monthly detailed account statements are to be sent to those veterans who cannot pay when medication is dispensed.

b. Claims Generation. The MCCR staff prints out and releases the monthly detailed accounts statements directly to the veteran. Collection letter, FL 4513a, or other approved billing and collection form, must be attached to the statement.

c. Claims Followup

(1) The MCCR staff follows up on unpaid medication copayment debts at 30day intervals. The FL 4513a's, or other approved billing and collection form, are attached to followup statements.

(2) In September of each year, unpaid medication copayment debts are to be consolidated with other unpaid medical care debts and if the total amount is $25 or more, the claim will be referred to the IRS in December for tax refund offset. (See chapter 23, Suspension of Collection Action and Write Off of Debts.) Debts in referral status to DOJ will not be referred to IRS for offset.

d. Write Off. The Fiscal activity is to write off or refer for write off delinquent medication copayment debts that meet the criteria for write off as set forth in chapter 23, Suspension of Collection Action and Write Off of Debts.

e. Referrals to the DC's/DOJ. Medication copayment receivables will be referred to the DC or DOJ for enforced collection action as detailed in chapter 24, Sections A and B.

f. Interest and Administrative Costs. Interest and other charges are to be assessed on medication copayment debts as detailed in chapters 7A and 7B.

19A.07 HOSPITAL CARE AND NURSING HOME CARE

a. Claim Generation. The Claims Activity prepares claims for the per diem charges for hospital care and nursing home care and forwards them to the Fiscal activity for audit and release directly to the veteran. Collection letter, FL 4513, or other approved billing and collection form, must be attached to the initial claim.

b. Claims Followup

(1) The MCCR staff follows up on unpaid per diem charges at 30day intervals. Second and third collection letters are attached to followup claims.

(2) In September of each year, unpaid hospital care and nursing home care debts are to be consolidated with other unpaid medical care debts and if the total amount is $25 or more, the claim will be referred to the IRS in December for tax refund offset. (See chapter 23, Suspension of Collection Action and Write Off of Debts). Debts in referral status to DOJ will not be referred to IRS for offset. Balances remaining after tax refund offset will be referred to the DC or DOJ for litigation if they otherwise meet the criteria as detailed in chapters 24A and 24B.

c. Write Off. The Fiscal activities are to write off or refer for write off delinquent per diem charges for hospital care and nursing home care that meet the criteria for write off as set forth in chapter 23, Suspension of Collection Action and Write Off of Debts.

d. Referrals to the DC's/DOJ. Hospital and nursing home per diem receivables will be referred to the DOJ or DC for enforced collection as detailed in chapters 24A and 24B.

e. Interest and Administrative Costs. Interest and other charges are to be assessed on hospital care and nursing home care per diem debts as detailed in chapters 7A and 7B.

19A.08 CONSOLIDATED BILLING

Medical Centers currently send a separate claim and collection letter to a veteran for each different category of medical care. When consolidated billing is installed, medical centers will send each veteran one claim each month that lists all charges for that particular month. Consolidated claims must also apprise veterans of late payment or other charges and contain appropriate due process notices.

19A.09 RECORDING THIRDPARTY ACCOUNTS RECEIVABLE

a. The Fiscal activity will record a firm receivable for claims rendered for thirdparty medical care including workers' compensation, nofault and reimbursable insurance cases (including medical riders on patient's automobile or homeowners policy), and crimes of personal violence. Payments accepted in full settlement of the claim but less than the claim amount are to be adjusted in accordance with instructions contained in MP4, part V, paragraph 2D.03.

b. The Fiscal activity will establish an accrued Contingent Receivable in accordance with MP4, part V, paragraph 6D.03 for tortfeasor cases. An accrued Contingent Receivable will continue to be maintained until the amount of payment is agreed upon by the DC and the claimed party. As soon as an amount of payment is agreed upon, the DC is to notify the Fiscal activity who will establish a firm receivable for the agreed upon amount and begin to age the account.

19A.10 RECONCILIATION AND NUMBERING OF CLAIMS DOCUMENTS

a. The Claims Activity numbers the claims documents using Pending Accounting Transaction (PAT) reference numbers that are assigned by the Fiscal activity each fiscal year. The Fiscal activity is to reconcile the claims documents with the Claims Activity by the 15th of each month to ensure that all claims prepared by the Claims Activity have been received and recorded properly and timely. This is to be accomplished by comparing claims recorded by the Fiscal activity with the Claims Activity Billing Log in the MCCR module of Decentralized Hospital Computer Program (DHCP). The Fiscal activity will report any discrepancies to the MCCR Coordinator and to the Claims Activity and after verification will ensure that any necessary adjustments are made to the accounting records.

b. Quarterly, as of December 31, March 31, June 30, and September 30, the Fiscal activity is to prepare a list of all thirdparty claims (tortfeasor, nonFederal workers' compensation, etc.) under the jurisdiction of the DC. The Fiscal activity will forward the list to the DC no later than the fifth workday after the end of the quarter. The DC is to be asked to specify whether a case is active or closed by returning an annotated copy of the list as early as practical, but no later than the last workday of the month in which it was received. If a case is closed, the DC is to provide the fiscal activity with the reason for closing, i.e., collected, closed with a recommendation that the receivable be written off, etc. The Fiscal activity will ensure that any necessary adjustments are reflected in the accounting records during the month in which the information is received.

SECTION B. INELIGIBLE/EMERGENCY MEDICAL CARE OR TREATMENT

19B.01 BILLING FOR INELIGIBLE/EMERGENCY MEDICAL CARE OR TREATMENT

a. Title 38 CFR 17.46(c)(1), (2), and (3) authorizes medical care or services to the general public and employees and their families in an emergency on a humanitarian basis. Billing for such care is authorized in 38 CFR 17.62(b). FL 4481 will be attached to the bill sent to the person treated.

b. Title 38 CFR 17.46(c)(2) authorizes medical care or services to a person in an emergency situation pending verification of eligibility for treatment as a veteran. The person will be billed for medical care or services if it is subsequently determined that he/she was not eligible for treatment by VA. Billing for such care or services is authorized in 38 CFR 17.62(a). FL 4480 will be attached to the bill sent to the person treated.

c. Compromise offers received on the above debts will be handled in accordance with chapter 22. The procedures for writeoff or suspension of collection action on these billings are located in chapter 23. Referrals for enforced collection to the DOJ or DC are governed by the instructions provided in chapters 24A and 24B.