What is a Demand Letter? 

What is a Demand Letter? 

Suppose you are a Medicare beneficiary who has been awarded a settlement from your case or claim. In that case, you may receive a demand letter from CMS. When a claim is settled, the Responsible Reporting Entity (“RRE”) should report settlement information to the Benefits Coordination and Recovery Center (“BCRC”). Once reported, the BCRC identifies all outstanding conditional payments it made associated with the claim and determines one sum of debt owed to CMS set forth in a demand letter addressed to the debtor.

The demand letter explains the amount owed by the debtor. It shows the reasons why CMS is entitled to a portion of the claimant’s settlement. It also describes how they reached the final demand amount. Lastly, it instructs the debtor on how to dispute the demand amount should they believe it is incorrect. 

The Demand Amount – Conditional Payments 

The Medicare Secondary Payer Law allows Medicare to pay for a beneficiary’s medical treatment related to a claim. Each payment covered for treatment is referred to as a conditional payment. The law also sets forth that CMS has a right to recover the total conditional payment amount directly from the claimant’s settlement. Attached to the demand letter, CMS provides an itemized list of all conditional payments made subject to the case. This letter gives the debtor a clear understanding of each medical treatment it covered related to the claim. If the beneficiary or the debtor should disagree with the amount owed, they may file an appeal evaluated by CMS. 

Ignoring the Demand Letter

Once received, the debtor is obligated under the Medicare Secondary Payer law to issue payment to CMS in the amount set forth by the demand letter within 60 days of receipt. When a debtor fails to do so, they accrue interest on the demand amount over time. Don’t let your claims go unresolved. Let Re:Solution handle your settlement properly and help you to avoid any extra costs.