Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Section 111) imposes reporting obligations under the Medicare Secondary Payer (MSP) laws on certain entities, including liability insurance (including self-insurance), no fault insurance, and workers' compensation plans (commonly referred to by the Centers for Medicare & Medicaid Services (CMS) collectively as Non-Group Health Plans or NGHPs).

The Secretary of the U.S. Department of Health and Human Services is authorized to implement the mandatory reporting requirements "by program instruction or otherwise." As a result, the Section 111 reporting requirements are being implemented through sub-regulatory guidance, including a User Guide and supplemental Alerts. Entities that fail to comply with the Section 111 requirements may be subject to civil monetary penalties of $1,000 a day for each instance of non-reporting.

On June 4, 2010, CMS issued two important documents clarifying the obligations of NGHPs with respect to (1) who must report, and (2) obligations, if any, to report periodic payments.

Alert Regarding Who Must Report

This Alert, dated May 26, 2010, revises Appendix G of the User Guide to clarify the rules regarding who must report. Specifically, two changes were made to Appendix G.

  • New language in the paragraph entitled "Liability Self-Insurance," states that where the self insurance in question is a deductible and the insurer is responsible for Section 111 reporting with respect to the policy, the insurer is responsible for reporting both the deductible and any amount in excess of the deductible (and the self-insured entity need not report the deductible amount).
  • CMS also deleted two sentences from the Appendix G description of a "Workers' Compensation Law or Plan." A prior version stated that where such plan is directly funded by the employer, the employer has the responsibility for reporting requirements under Section 111 and where such plan is indirectly funded by the employer, the insurer has the responsibility for the reporting requirements under Section 111. Determinations as to who is required to report are fact specific and must be made with regard to the guidance in the Alert generally.

Alert Regarding Workers' Compensation Periodic Payments

In this Alert, dated May 27, 2010, CMS provided important guidance for those NGHPs making periodic workers' compensation and no-fault payments. Specifically, CMS states that an NGHP making regularly scheduled payments to, or on behalf of, a Medicare beneficiary for items or services other than medical expenses is not required to report such payments to CMS; provided, however, that the entity has separately assumed Ongoing Responsibilities for Medicals (ORM) and reports those payments appropriately.