The Medicare, Medicaid and SCHIP Extension Act of 2007 includes mandatory reporting and registration rules for business entities that make payments to Medicare beneficiaries under self-insurance plans. The new rules amend the Medicare Secondary Payer (MSP) Law, which ensures that Medicare only pays for healthcare expenses secondary to any primary coverage that may apply.
Deadlines for registering and reporting are quickly approaching (March), and there are substantial penalties for failing to report. The following provides an overview of the MSP Law and the new rules.
The MSP Law
In general, the MSP Law: (i) designates CMS as the secondary payer to certain primary plans that cover services provided to Medicare beneficiaries; (ii) prohibits CMS from making payments for Medicare-covered services if payment has been made, or can reasonably be expected to be made, by a primary plan; and (iii) allows CMS to recover a payment made on behalf of a Medicare beneficiary, when the beneficiary later receives payment on the same claim from a primary payer.
The new rules amend the MSP Law to identify situations in which CMS is a secondary payer by adding mandatory reporting rules and imposing penalties for noncompliance.
Who Must Register and Report?
Under the new rules, any business entity which is self-insured – e.g., professional liability, general liability, health plans, workers compensation, etc. – must register and report as Responsible Reporting Entities (or “RREs”). An RRE can contract with a third party to act as an agent of the RRE for reporting.
What Must be Reported?
RREs must report to CMS the identity of any Medicare beneficiary whose illness, injury, incident or accident was at issue in a claim paid by an RRE, subject to certain reporting thresholds (see website at end for details).
The following are just a few examples of payments that need to be reported: (i) Reimbursement by an employer to an employee who is a Medicare beneficiary for healthcare expenses under the employer’s self-insured health care plan;
(ii) Payments by an employer to an employee (who is a Medicare beneficiary) for injuries covered by the employer’s self-insured workers’ compensation program;
(iii) Payments by a Company to a Medicare beneficiary who is injured on the Company’s premises, pursuant to the Company’s self-insured general liability plan; and
(iv) Payments by a healthcare facility to a Medicare beneficiary who alleged malpractice, pursuant to the facility’s self-insured professional liability program.
Medicare beneficiaries include not only elderly persons (65+), but also individuals with endstate renal disease and certain disabled individuals. To ensure accurate reporting, RREs must implement a procedure to determine whether an injured party is a Medicare beneficiary. An RRE should confirm whether or not a person, to whom a payment is made under its self-insurance program, is a Medicare beneficiary by querying CMS on a regular basis, up to once per calendar month.
When Must Reports be Submitted?
The new rules require an RRE to register with CMS by September 30, 2009, although registration remains open indefinitely thereafter. Following registration, the RRE is required to test the submission process before any actual reporting may occur. The testing period is scheduled to end on March 31, 2010.
Once testing is completed, the RRE will be assigned a quarterly submission timeframe and must submit quarterly reports even if there is no payment information to report. The first submission will be an assigned window between April and June of 2010, during which the RRE will report First Quarter 2010 information. By July 1, 2010 all RREs must be submitting reports.
Penalties for Failing to Report
A civil monetary penalty of $1,000 may be imposed against an RRE for each day of noncompliance for each Medicare beneficiary for whom the RRE was required to submit information. For example, if an RRE makes a payment to three (3)Medicare beneficiaries, but fails to report the payment for one (1) year, a penalty of $3,000 per day, over 365 days, could result in a total penalty of over $1 million.
What Steps Must an RRE Take?
In order to comply with the new rules, any business entity which qualifies as an RRE (i.e., has one or more self-insurance programs), should take the following actions:
- Register with CMS, complete the testing process, and receive a submission timeframe.
- Query CMS on a regular basis (i.e., once per month) to determine if any person to whom a payment is made under your selfinsurance program is a Medicare beneficiary whose information must be reported.
- File a quarterly report with CMS based on your assigned timeframe. If there is no new information to report, you must submit an “empty” claim.
- Update previously submitted reports, if necessary, on a quarterly basis.
For more detailed information regarding MSP reporting requirements (and the various thresholds and deadlines) visit: http://www.cms.hhs.gov/MandatoryInsRep/01_Overvie w.asp#TopOfPage