The Pennsylvania Insurance Department has posted the advisory below for medical providers to apply for recovery from the Mcare Settlement litigation. Below is the instructions and information for providers and payors.
Mcare Settlement Refund Information
Mcare has begun the process of implementing the settlement of litigation brought by the Hospital and Healthsystem Association of Pennsylvania (HAP), the Pennsylvania Medical Society (PAMED) and the Pennsylvania Podiatric Medical Association (PPMA). This process involves making assessment refunds to over 55,000 health care providers and involves over 330,000 transactions. Health care providers will be given the opportunity to direct Mcare to pay the assessment refund to another person or entity if that is who actually paid the original assessment (the “Payor”). Mcare, HAP, PAMED and PPMA have been meeting regularly since the settlement in October 2014 to define a process that strikes the appropriate balance between having health care providers control where the assessment refunds go and having the assessment refunds go to the proper recipient. It is anticipated that as the refund process moves forward, adjustments will be identified so health care providers are encouraged to periodically check this website for updated information.
Frequently Asked Questions
Lawsuit Settlement Information
The assessment refunds are being made as a result of Mcare’s settlement of litigation brought by HAP, PAMED and PPMA challenging the way annual assessments were calculated. The assessment calculation is determined by statute to be based on Mcare’s final claims payments in a claim period, Mcare expenses, principal and interest on any borrowing and a 10% buffer. While not explicitly addressed in the statute, as a result of the settlement any projected year-end balance will be used to reduce the next year assessment amount to be collected.
Mcare has agreed to refund a percentage of the assessments collected for assessment years 2009, 2010, 2011, 2012 and 2014 because the calculation used did not include the projected year-end balance (there was no projected year-end balance in 2013). Each health care provider who paid an assessment in one or more of these years will be eligible for a refund (see “Refund Amount” below for more details on how the refunds will be calculated). There were over 55,000 health care providers who paid an assessment during these years. Many health care providers have coverage from more than one insurer during a year so there are over 330,000 individual transactions (lines of coverage or LOC) that need to be recalculated.
On April 1, Mcare in conjunction with HAP, PAMED and PPMA began the refund process by providing health care providers who had a Payor pay their assessment on one or more LOCs the opportunity to direct Mcare to pay the refund directly to the Payor. This will be done by a claim/assignment process (see “Claim/Assignment Process” below for more details).
Once this information is received, Mcare will send letters (see “Refund Notice Letters” below for more details) to each health care provider who paid an assessment during the years listed above. The letter will detail the refund amount due to the health care provider. It will also direct the health care provider to a website to address any LOCs that may have been claimed by another person or entity.
Mcare will issue checks through the Treasury Department to health care providers whose LOCs are all finalized. This means that all LOCs are either not claimed, were claimed and the health care provider made a decision on the website to agree or disagree with the claim or the refund on a LOC has been assigned to another. It is anticipated that the first round of checks will be issued in the first quarter of 2016.
IRS Form 1099 – Misc forms will be issued to those health care providers receiving refunds with the payment designated under Box 3, “Other income.”
Any undeliverable refunds that are not claimed, will be escheated to the Bureau of Unclaimed Property where they will be held in the name of the health care provider until claimed.
Filling out and submitting the “CLAIM OR ASSIGNMENT OF REFUND SPREADSHEET REQUEST FORM” is how one starts the process of either claiming an assessment refund or entering into one or more assignments with a health care provider. Once this form is filled out and sent to Mcare, the necessary forms will be emailed back to the requester. The claim and assignment forms are intentionally not available without a spreadsheet because Mcare needs very specific information regarding a claimed or assigned assessment as there are over 330,000 lines of coverage that are subject to a refund.
- Claim If a Payor paid the assessment for a LOC on behalf of a health care provider and for some reason they are not in a position to enter into an assignment agreement (for example, the health care provider has moved and cannot be found) the Payor who paid the assessment for a LOC may claim the refund associated with that LOC. To do this, the Payor should print out the “CLAIM OR ASSIGNMENT OF REFUND SPREADSHEET REQUEST FORM” by using this link, fill it out completely and follow the instructions on how to get it back to Mcare. Mcare will then send the Payor a spreadsheet containing the information needed to claim one or more LOCs as well as an approved claim form that must be completed. The completed spreadsheet is then returned to Mcare with the ASSESSMENT PAYOR’S CERTIFICATION AND CLAIM AGREEMENT.
- Assignment If a Payor paid the assessment for a LOC on behalf of the health care provider, the Payor and health care provider may agree to direct Mcare to pay the refund to the Payor. To do this, the Payor should print out the “CLAIM OR ASSIGNMENT OF REFUND SPREADSHEET REQUEST FORM” by using this link, fill it out completely and follow the instructions on how to get it back to Mcare. Mcare will then send the Payor a spreadsheet containing the information needed to assign one or more LOCs as well as an approved assignment form that must be used. The completed spreadsheet is then returned to Mcare with the ASSESSMENT PAYOR’S CERTIFICATION AND ASSIGNMENT AGREEMENT. The HEALTH CARE PROVIDER’S REFUND ASSIGNMENT AGREEMENT(s) must be retained by the parties to the assignment for six (6) years.
The amount to be refunded to each health care provider depends on the following factors:
- The number of years covered by the settlement in which the health care provider paid an assessment.
- The health care provider’s specialty, where they practiced during those years and any discounts that applied (e.g. new physician).
- How much of the total amount to be refunded in the settlement was generated in each of the years the health care provider paid an assessment.
- The actual amount of assessment that was collected in each of the years covered by the settlement.
The exact percentage of the assessment a health care provider paid on each LOC needs to be calculated on a specific date so that the $139,012,919 can be exactly allocated to each LOC. This date is called the “Refund Effective Date” or “RED Date”. This date is expected to be in Fall 2015.
Refund Notice Letters
Mcare has agreed to send each health care provider who paid an assessment during the years covered by the settlement a letter. The letter will be sent to the address on file with the appropriate licensing authority or the Corporation’s Bureau. The letter will specifically detail the LOCs Mcare records reflect a health care provider either paid or were paid on their behalf. In addition to the amount of refund per LOC, the refund notice letter will confirm for the health care provider that Mcare has received notice that one or more LOCs were assigned or claimed. If a LOC is claimed, the health care provider must go to the claim decision website that is being developed and select “Pay me” to prevent a refund going by default to the Payor who claimed the LOC. Mcare will receive information from the claim decision website and the decision by the health care provider on the claim decision website will control where Mcare sends the refund for that LOC. Spreadsheets containing assignments for unclaimed LOCs (but not new claims to LOC’s) will also be accepted during this period.
Refund Service Center
Mcare has established a Refund Service Center. The Service Center can be reached between 8 a.m. – 5 p.m. M-F at 717-231-6400. Emails may be sent to [email protected] with refund questions anytime.