The Medicare, Medicaid, and SCHIP Extension Act of 2007 (S. 2499) (the “Act”), signed into law late last year, contains a new mandatory reporting requirement for insurers covering medical expenses.
Generally, Medicare is the primary payer for medical claims of a Medicare beneficiary. If a beneficiary has other insurance, that insurance may provide supplemental payments where Medicare has gaps in coverage. In certain situations, the Medicare Secondary Payer (“MSP”) rules make Medicare’s obligation to cover medical costs secondary to certain group health plans ("GHPs"), such as employer-sponsored health plans, and to liability insurers (including self-insurers), no-fault insurers and workers’ compensation insurers.
Section 111 of the Act requires GHP insurers to (i) determine whether a claimant (including an individual whose claim is unresolved) is entitled to benefits under Medicare on any basis; and (ii) if the claimant is determined to be so entitled, submit the identity of the claimant and any such other information deemed necessary on a quarterly basis to the Centers for Medicare and Medicaid Services. The entity that is making the claim payments is responsible for reporting the required information regardless of whether it is reimbursed by another entity for those payments. Therefore, the reporting requirement also applies to captive insurers, risk retention groups and risk purchasing groups that provide liability insurance.
Section 111 of the Act is aimed at gathering the necessary information to determine when Medicare’s financial responsibility is secondary. It does not, however, change any of the existing rules that determine whether Medicare or another payer is the primary or secondary payer with respect to a beneficiary. Therefore, by use of this information, Medicare will be able to properly determine when its financial responsibility is secondary and in turn reduce its payments, or if payments have already been made, recoup those payments.
The reporting requirements for GHPs became effective on January 1, 2009 and the reporting requirements for liability insurers (including self-insurers), no-fault insurers and workers’ compensation insurers becomes effective on July 1, 2009.