As of September 30, 2009, insurers (including self-insurers) and third party administrators (TPAs) should be fully registered and ready to test systems to comply with the Mandatory Reporting Requirements. Two years ago Congress passed the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA), which added new and significant mandatory reporting requirements for group health plans (GHPs) and for liability insurance (including self-insurance), no-fault insurance and workers' compensation benefits, to report where they have made a payment to a Medicare beneficiary.
With over 78 million American baby-boomers about to age into the system, the intent of the law is to preserve Medicare funds where other insurers are primary to Medicare. The new reporting requirements are being implemented by the Centers for Medicare & Medicaid Services (CMS). All mandatory reporters must register with CMS no later than September 30, 2009.
Insurers and TPAs need to coordinate reporting with their customers' employers to ensure compliance by both parties. Many employers will be responsible for reporting, because they are "self-insured" as the term is defined by CMS for their liability coverage or are considered self-insured under the law based upon the deductible in place for their insurance. Insurers and TPAs will be expected to assist employers in complying with reporting responsibilities.
Under current law, Medicare has been the secondary payer to liability insurance, no-fault insurance and workers' compensation plans for many years, however the process has largely been "pay and chase" but with little front end information to identify the potential sources of such funds. Settlements that covered medical expenses were difficult to identify and track, and beneficiaries were often unable to repay Medicare when the Medicare Secondary Payer (MSP) issue was identified months or years later.
The penalties for non-compliance with these new obligations are significant - over $1,000 per day, per claim. Because the reporting is quarterly and an employer might not realize it missed a deadline until the next reporting date, it is conceivable that one missed deadline could result in a liability of $90,000 or more. Furthermore, 42 CFR 411.24(i) permits Medicare to recover from the primary payer even if the primary payer has reimbursed the beneficiary or other party if it was aware or should have been aware that Medicare made a conditional primary payment.
Click here for frequently asked questions to assist affected parties with compliance.