The Centers for Medicare Services (CMS) recently extended the deadlines for liability insurers (including self-insurers, no-fault insurers and workers’ compensation insurers) to comply with new Medicare reporting requirements. The online registration period for such insurers has been extended to September 30, 2009. Beginning April 1, 2010, such insurers will face civil penalties of US$1,000 per day per claimant for failure to comply with the new reporting requirements. The Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) amends the Medicare Secondary Payer Act (MSP), imposing enhanced reporting obligations upon liability insurers and self-insurers to identify and report claimants that are also Medicare beneficiaries. While prior enforcement of MSP has been focused on workers’ compensation, MMSEA is intended to expand the ability of CMS to identify liability cases where Medicare is the secondary payer – and therefore permit the federal government to enhance enforcement.
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 April 1, 2010, 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.
Registration, Testing and Reporting
In order to comply with the MMSEA in a timely manner, each RRE must meet the following deadlines:
Registration: Each RRE must register online with the Medicare Coordination of Benefits Contractor between May 1, 2009 and September 30, 2009.
Testing: Each RRE must conduct testing between January 1, 2010 and March 31, 2010.
Reporting: Each RRE must submit required reports during an assigned window that will fall during the second 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 April 1, 2010 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 September 30, 2009; and
- Commence testing of the new reporting process.