The Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) added new mandatory reporting requirements for group health plan arrangements, liability insurance (including self-insurance), no-fault insurance and workers' compensation plans to ensure better compliance with the Medicare Secondary Payer (MSP) rules. MSP rules determine whether Medicare or other insurance is primary and also enforce reimbursement to Medicare for conditional payments for which a third party is liable.
It is important to recognize that these requirements may be relevant to many types of employers and entities and are not specific to healthcare or insurance providers, but may impact the source and timing of payments to providers.
Group Health Plans
Before MMSEA, there was no mandatory sharing of claims payment information. Some group health plans, however, provided data to CMS under voluntary data-sharing agreements.
"Responsible Reporting Entities" (RREs) are required to report claims information. If an insurer pays the claims and assumes financial risk, the insurer is the RRE. If an insurer does not process the group health plan’s claims, any thirdparty administrator processing claims will be the RRE. If the plan is self-insured and self-administered, the designated plan administrator or fiduciary is the RRE. RREs generally were required to register with CMS before April 30, 2009, and must begin reporting based on a predetermined schedule beginning October 1, 2009.
Where the group health plans do not know whether a covered individual is a Medicare beneficiary, the RRE may either report on all "Active Covered Individuals" (ACIs) or query CMS’s database to determine an individual's Medicare status. ACIs include (1) most individuals in a group health plan ages 55-64, (2) most individuals age 65 or older, (3) individuals receiving kidney dialysis or who have had a kidney transplant, and (4) individuals under age 45 who are known to be entitled to Medicare.
If an insured refuses to provide his social security number or health insurance claims number, an RRE should obtain a signed copy acknowledgement from the refusing individual. This step will ensure that the RRE is considered to be compliant with reporting requirements.
Under MMSEA, liability insurers, no-fault insurers, workers' compensation plans and insurers, persons and entities that self-insure RREs must register with CMS by September 30, 2009, if they have data to report. RREs, however, are not obligated to begin testing their reporting systems until January 1, 2010. Required reporting begins April 1, 2010.
If an entity is self-insured for a deductible, but the deductible is paid through an insurer, then the insurer is the RRE. Reinsurance, stop-loss insurance, excess insurance, umbrella insurance, guaranty funds, patient compensation funds, etc., will be deemed to be RREs if they pay the injured claimant rather than reimbursing the insured. Third-party administrators, however, generally are not RREs for liability insurance reporting.
For workers’ compensation plans, if the claims are resolved and paid by a governmental agency, the agency is the RRE. If the employer self-insures workers' compensation, the employer is the RRE. However, if the employer participates in a workers' compensation self-insurance pool, the pool is generally the RRE. RREs were required to begin reporting settlements, judgments, awards or other payments and when the
RRE has accepted ongoing responsibility for medical payments beginning on July 1, 2009.
RREs that fail to comply with these requirements may be subject to a penalty of $1,000 per day of noncompliance with respect to each claimant.
Steps to Ensure Compliance with MMSEA
If an outside agent is used to fulfill MMSEA reporting, the contract with the entity should include provisions allowing audits of their compliance with reporting requirements, as well as indemnity in the event the RRE is subjected to penalties or damages.