In an effort to improve the accountability of the Medicare program, Congress established new mandatory reporting requirements for entities that pay settlements or judgments to Medicare beneficiaries in Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 ("MMSEA").[1] The purpose of Section 111 is to enable Medicare to better evaluate and track the cases in which its liability is, or should be, secondary to a tortfeasor or its insurer.
Beginning July 1, 2009, affected entities will be required to report Medicare beneficiary claimants and/or plaintiffs directly to the Centers for Medicare & Medicaid Services (CMS). Any entity with reporting requirements under the MMSEA is called a Responsible Reporting Entity ("RRE").
Who Qualifies As An RRE?
RREs include the following entities: (a) any insurer that provides liability insurance, (b) any entity acting as an insurer or third party administrator for a group health plan, or (c) any entity acting as an insurer or third party administrator for a self insured group health plan. An entity will be considered self-insured if it engages in a business, trade, or profession, and carries any of its own risk, whether by failure to obtain insurance or otherwise. Liability insurance, in turn, means insurance - including a self-insured plan - that provides payment based on legal liability for injury, illness or damage to property. It includes, but is not limited to, automobile liability insurance, uninsured motorist insurance, underinsured motorist insurance, homeowner liability insurance, malpractice insurance, product liability insurance, and general casualty insurance.
Registration
All RREs that are insurers or third party administrators for group health plans must register with CMS before June 30, 2009. RREs that are the administrators or fiduciaries for a group health plan that is self-insured and self-administered must register with CMS before June 30, 2009 as well. CMS recently extended the registration deadline until September 30, 2009 for RREs that are self insurers or liability, no fault, or worker's compensation insurers. Please note, however, that while entities which qualify as RREs are not required to register if they do not expect to have anything to report, those that do not register initially must register in time to allow a full quarter for testing if situations arise in the future where they have an expectation of reporting.
Reporting Requirements
RREs may be fined up to $1,000 for each day of noncompliance with the new requirements, so it is important to understand all reporting requirements. The MMSEA requires RREs to determine whether a claimant is a Medicare beneficiary. If the claimant agrees to cooperate, RREs may seek information about the claimant's Medicare status from the Social Security Administration ("SSA") by submitting a benefit request in writing together with the Social Security Consent Form (SSA 3288) signed by the claimant.
For situations where a claimant is unwilling to sign the consent form, CMS has designed an electronic query process. During registration, the RRE will be asked if it wishes to use the CMS electronic system. If the RRE decides to use that system, it will need to use either its own HIPAA-compliant software or request a copy of the HIPAA Eligibility Wrapper software (HEW) provided by CMS. This method of obtaining Medicare status allows RREs to submit the Social Security number, name, gender, and date of birth of claimants once a month. CMS will use the information submitted to determine if the RRE's information matches the records of the SSA. If there is a match, CMS will provide a response file confirming that the claimant is a Medicare beneficiary. As a result of privacy concerns, CMS will not provide either the actual dates of Medicare entitlement or the reason for entitlement.
It is imperative that the RRE knows the Social Security number of all claimants. Without it, the RRE will not be able to obtain the claimant's Medicare status by using either the consent form or the electronic query system. In addition, when the RRE reports the payments it makes to a Medicare beneficiary to CMS, it must submit either the claimant's Social Security number or the claimant's Medicare Health Insurance Claim Number (HICN).
Once the RRE learns that a claimant is a Medicare beneficiary, it must report to CMS all payments to the claimant, either by way of partial or full settlement, judgment, or payout. All payouts must be reported regardless of whether the claimant was a Medicare beneficiary at the time of the injury, or became a Medicare beneficiary while the claim is pending. As long as the claimant is a Medicare beneficiary at the time of payment, the RRE must report the payment to CMS. Similarly, any admission or denial of liability does not preclude the reporting requirement. Also, if a plaintiff originally claimed medical expenses, the payment must be reported regardless of any later statements by the parties or a court that there are no such expenses.
More Information
More information on the MMSEA reporting requirements can be found on the CMS website at: www.cms.hhs.gov/MandatoryInsrep/.
Specific information on who qualifies as a non-Group Health Plan RRE is provided in section seven of the March 16th CMS user guide located at:
www.cms.hhs.gov/MandatoryInsRep/Downloads/
The SSA consent form authorizing the release of a claimant's Medicare status can be found at: www.ssa.gov/online/ssa-3288.pdf.
