There have always been more involved reporting requirements when there is a crossover between workers' compensation and Medicare benefits. Effective July 1, 2009 new Medicare requirements will impose further duties upon employers and insurance companies when reporting claims to the Centers for Medicare & Medicaid Services (CMS) for workers' compensation claimants that are also Medicare beneficiaries. Significantly, failure to notify CMS in accordance with the new reporting requirements subjects the employer or insurance carrier to a civil penalty of US$1,000 per day per claimant. These requirements from the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) amend the Medicare Secondary Payer Act. The intention is to improve the ability of CMS to identify beneficiaries for whom Medicare is the secondary payer, thus permitting the federal government to closely monitor recoveries in tort claims and minimize costs to Medicare.
Entities That Must Comply
The entities responsible for complying with the new reporting requirements are referred to as "Responsible Reporting Entities," or RREs. These include liability insurers, no-fault insurers, workers' compensation programs and insurers, captive insurers, insurance trusts and entities that self-insure these risks, such as health care providers (e.g., malpractice liability) and employers (e.g., workers' compensation exposure). The RRE is the entity that makes payment to the claimant or representative of the claimant, regardless of whether a third party (e.g., captive insurer) reimburses the self-insured entity.
Claims to Report
Beginning July 1, RREs must report all claims that involve a Medicare beneficiary where there is a settlement, judgment, award or other payment or reimbursement for medical costs. For similar claims involving ongoing responsibility for medicals where that responsibility will extend beyond July 1, 2009, CMS has delayed reporting until the third quarter of 2010.
Registration, Testing and Reporting
In order to comply with the MMSEA in a timely manner, each RRE must meet the following deadlines:
Each RRE must register online with the Medicare Coordination of Benefits Contractor between May 1, 2009 and June 30, 2009.
Each RRE must conduct testing between July 1, 2009 and December 31, 2009.
Each RRE must submit required reports during an assigned window that will fall during the first quarter of 2010, and thereafter on a quarterly basis. Reports can be submitted earlier if testing is completed. RREs must report, in an electronic format designated by CMS, any settlement, judgment award or other payment made on or after July 1, 2009 with respect to a Medicare beneficiary, regardless of whether there has been an admission or determination of liability. In the case of professional liability settlements, even if the settlement agreement provides that the payment is limited to lost income or other nonmedical expenses, if medical expenses are claimed or released by the claimant, the payment still must be reported. CMS is not bound by an allocation of medical expenses made by the parties.
Due to the significant penalties it is extremely important that each provider of liability or no-fault insurance, or workers' compensation programs or insurance, and each organization that self-insures assess and determine whether or not it is deemed to be an RRE under the new rules. If an entity determines that it is an RRE, the following steps should be taken:
- Review the MMSEA reporting requirements;
- Create procedures and processes to capture the required information under the MMSEA;
- Register online with the Medicare Coordination of Benefits Contractor before June 30, 2009; and
- Commence testing of the new reporting process.