By now, most health care entities have received basic information concerning the September 30 registration deadline and reporting requirements imposed by the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA). The amendments, codified at 42 U.S.C. § 1395 y(b)(8), require liability insurers (which are defined to include self-insured entities) to report payments related to bodily injuries incurred by Medicare beneficiaries. The reporting obligations are technically and technologically complex, with very limited safe harbor provisions.

Initially intended to capture payments on or after July 1, 2009, the starting date for reports has been moved to January 1, 2010 for all payments except those for ongoing medical expenses (ORM). These payments are usually, but not always, encountered in workers' compensation cases. They may be applicable to a limited number of general liability claims.

The Center for Medicare and Medicaid Services (CMS) required all Responsible Reporting Entities (RREs) to register with the agency for reporting purposes by Wednesday, September 30. CMS intends to commence testing with registered organizations immediately. The first official reports to CMS are scheduled for the quarter beginning April 1, 2010, during a seven-day window provided after an RRE registers and confirms registration through the submission of test data.

CMS defines a self-insured entity differently than how that term is commonly defined in the industry. The CMS definition includes an entity "that engages in a business, trade or profession...[and] carries its own risk (whether by a failure to obtain insurance or otherwise) in whole or in part. Self-insurance or deemed self-insurance can be demonstrated by a settlement, judgment, award or other payment to satisfy an alleged claim (including any deductible or co-pay on a liability insurance...plan) for a business, trade or profession." CMS User Guide at p. 216 (July 31, 2009), available at http://www.cms.hhs.gov.

Failure to comply with the reporting requirements can trigger fines of $1,000 for each day of non-compliance for each claimant for whom a report should have been filed. By missing just one quarterly reporting window, an RRE could quickly incur a $90,000 penalty. There is no statutory limit to the liability for non-compliance.

All of the preceding information has been covered in a variety of governmental, legal newsletters, and private industry (third-party administrators [TPA] and structured settlement consultant) publications. The purpose of this alert is to specifically focus upon several practical issues that hospitals and clinics - particularly entities carrying high deductible or self-insured retention (SIR) policies - should address as these reporting requirements pass from the "registration phase" (in which RREs are supposed to register with CMS by September 30, 2009) to the "reporting phase." Hospitals and medical clinics face several unique dilemmas under these new reporting laws.

For detailed answers to some of the more pressing concerns that have been expressed to us by hospital and clinic clients, click here.