By rule, Medicare is generally primary for COBRA participants who are age 65 and older. In other words, employers only have secondary liability for healthcare claims. A recent audit revealed a large volume of claims incorrectly paid as primary by our client on this issue. As it turned out, the TPA was relying solely on responses to other insurance questionnaires to its membership to determine the existence of other primary coverages. The response rate to these mailed questionnaires was less than 5 percent. Based on our findings, the TPA now automatically contacts Medicare to determine applicable coverage for all members on COBRA age 65 and higher. In addition to root cause correction for any future overpayments, we were able to identify over $1 million in recoveries for this client.
