Medicare Secondary Payer Reporting Requirements

Medicare Secondary Payer Enhancement Act of 2010

Legislation

RIMS supports H.R. 4796, "The Medicare Secondary Payer Enhancement Act of 2010," which was introduced in this legislative session by Representatives Patrick Murphy (D-PA) and Tim Murphy (R-PA). We believe that enactment of H.R. 4796 is necessary to correct the current unworkable information collection requirements under the MMSEA that are imposed on RIMS members who may be self insurers or responsible parties to Medicare under non-group health plans.

H.R. 4796 remedies several looming problems by:

Allowing responsible parties to self-calculate the secondary payment that is owed Medicare for reimbursement purposes, rather than await the government providing the estimated liability after the settlement itself.
Self insurers and other responsible parties could also request that the Secretary provide them with an estimate of the amount owed to Medicare before settlement.
Creating a right of appeal of the Centers for Medicare and Medicaid Services' determination of a "conditional payment" amount for self insurers and non-group health plans similar to that which already exists for group health plans
Creating a "safe harbor" threshold which would eliminate MSP obligations for settlements of $5,000 or less.
Protects privacy of Medicare beneficiaries by providing an alternative to requiring that an individual provide their social security number to third parties

Background

Section 111 of the Medicare, Medicaid, and SCHIP Act of 2007 (MMSEA) requires group health plans, liability insurers, self-insurers, no-fault insurers, and workers’ compensation insurers to report information to the Centers for Medicare & Medicaid Services (CMS) about payments to Medicare beneficiaries to assist CMS in the coordination of benefits paid to individuals in which Medicare or Medicaid is one of the payers (Medicare beneficiaries). This information enables Medicare to stop making payments when another entity is required to pay and to facilitate recovering any payments Medicare has made in cases involving primary payers. [Medicare secondary payment (MSP) covers those situations in which Medicare does not have primary responsibility for paying the medical expenses of a Medicare beneficiary. For example, Medicare is a secondary payer to liability insurance (including self-insurance), no-fault insurance, and workers’ compensation.]

On August 1, 2008, CMS issued data collection requirements implementing MMSEA, which mandate reporting to CMS all payments, settlements, awards, and judgments that involve a Medicare recipient. Group health providers (GHPs) began complying on January 1, 2009 and liability insurers (including self-insurers), no-fault insurers, and workers’ compensation insurers were required to report all settlements, awards, judgments, and other payments that occur on or after July 1, 2009 on a quarterly basis. Failure to comply with the data reporting requirements could result in penalties of $1,000 per day for each claim not reported.

Non-GHPs (self-insureds and general liability insurance carriers) currently comply with obligations under the Medicare Secondary Payer Law by requiring in the settlement agreement the injured party or his or her attorney to notify Medicare of the settlement. The settlement amount is disbursed and the claim is closed. The MMSEA changes this process by requiring the non-GHPs to identify whether the individual is entitled to Medicare benefits and to provide required information about the beneficiary and the settlement or judgment to CMS.

RIMS Position

RIMS filed comments with CMS on the data-reporting requirements, raising issues about the ability to obtain required social security numbers as well as questions about reporting structured settlements, document retention, handling claims with multiple insurance carriers, and costs of compliance.

An industry coalition, the Medicare Advocacy Recovery Coalition (MARC), in which RIMS has been participating, has been working on obtaining a delay in implementing the reporting requirements. CMS recently announced a three month delay in implementation of the MSP reporting process (until January 1, 2010) and established an interim reporting threshold of $5,000 which is phased down to $600 beginning January 2012. MARC now plans to address other implementation issues raised by the MSP program.

RIMS position is to advocate for an extension of time for non-GHP compliance and for modification of onerous reporting requirements.