CMS Demand Calculation Options

If you are settling a liability case or a workers’ compensation case, you may be able to request that your case be put into the Final Conditional Payment process. Please see the "Final Conditional Payment Process" section for more information.

Optionally, if you are settling a liability case, you may be eligible to calculate the amount of money owed to the Medicare program (i.e. the demand amount) prior to settlement or you may be eligible to pay Medicare a flat percentage of the total settlement. Please see the "Self-Calculated Conditional Payment Amount" and "Fixed Percentage Option" sections to determine if your case meets the required guidelines. For information on how Medicare otherwise determines the demand amount for a typical liability, no-fault, or workers’ compensation case, see the Medicare’s Recovery Process page.

Final Conditional Payment Process

The Final Conditional Payment process permits you to obtain time and date stamped final conditional payment summary documents before reaching settlement and ensures that relatedness disputes are addressed within 11 business days of receipt of dispute documentation. This process, and all actions related to it, can only be requested on the Medicare Secondary Payer Recovery Portal (MSPRP). For more information see the MSPRP User Manual which is available under the ‘Reference Material’ menu option of the MSPRP application.

Before initiating the Final Conditional Payment process it is important to note the following:

• All Final Conditional Payment actions must be completed on the MSPRP
• The process is only available for liability cases and workers’ compensation cases
• Can only be started by the debtor (or debtor’s authorized representative) on the case
• Can only be started ONCE per case
• Notifies the Benefits Coordination & Recovery Center (BCRC) that the case is within 120 days of settlement
• Guarantees that claim disputes submitted through the MSPRP are addressed within 11 business days
• Limits disputes to once per claim / line item
• Requires users to request the Final Conditional Payment Amount when the case is within 3 business days of settlement

You will be required to complete the following actions for the Final Conditional Payment. Failure to complete any of these actions in time will void the Final Conditional Payment process and you will not be permitted to start the process again.

1. Use the MSPRP to notify the BCRC that you are within 120 days of settlement
2. Resolve disputes on the MSPRP during this 120-day period
3. Request a Final Conditional Payment amount on the MSPRP within 120 calendar days of starting the Final CP process
4. Settle the case within 3 business days of  requesting a Final Conditional Payment Amount
5. Provide the settlement information on the MSPRP within 30 calendar days of requesting the Final Conditional Payment Amount 

Self-Calculated Conditional Payment Amount

The Self-Calculated Conditional Payment Amount enables you to self-calculate the demand amount before settlement in certain situations. The following conditions must be met for Medicare to provide the demand amount before settlement is reached:

• The claim and settlement must be for an injury caused by physical trauma. The settlement cannot involve or relate to injuries caused by exposure, ingestion, or medical implant.
• Your medical treatment for the injury must be completed with no further treatment expected. Treatment must have been completed at least 90 days before you submit the proposed conditional payment amount to Medicare. These requirements are proven to Medicare by providing either: A physician’s written confirmation or Medicare beneficiary certification that he or she has not had care related to the case within the last 90 days and expects no further care.
• The total settlement, judgment, award, or other payment cannot exceed $25,000.
• The date of the incident must have occurred at least six months before submitting the self-calculated final conditional payment amount to Medicare.

You will be asked to give up the right to appeal the amount or existence of the debt. However, you will keep the right to pursue waiver of recovery. For information on how to self-calculate the demand amount, please review the Self-Calculated Conditional Payment Amount Presentation available from the Downloads section near the bottom of this page. Here you will also find the Self-Calculated Conditional Payment Amount Model Language to be used when sending in the request.

Fixed Percentage Option

If a settled case meets certain eligibility criteria, you or your attorney or other representative may request that Medicare’s demand amount be calculated using the Fixed Percentage Option. The Fixed Percentage Option offers a simple, straightforward process to obtain the amount due to Medicare. It eliminates time and resources typically associated with the Medicare Secondary Payer (MSP) recovery process since you will not have to wait for Medicare to determine the conditional payment amount prior to settlement. You may elect the Fixed Percentage Option, if the following eligibility criteria are met:

• Your liability insurance (including self-insurance) settlement, judgment, award or other payment is related to an alleged physical trauma- based incident and;
• The total settlement is for $5,000 (Note this amount will be raised to $10,000, effective October 2, 2023) or less.
• You elect the option within the required timeframe and Medicare has not issued a demand letter or other request for reimbursement related to the incident.
• You have not received and do not expect to receive any other settlements, judgments, awards, or other payments related to the incident.

For additional information on the Fixed Percentage Option, please see the Fixed Percentage Option Presentation and the Fixed Percentage Model Language. These documents may be accessed from the Downloads section below.