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Medicare Secondary Payer Enhancement Act Being Introduced in Congress Could Address Many Concerns of Section 111 Reporting

Dealing with MSP Can Feel Like Walking Into a Maze

The Medicare Secondary Payer Enhancement Act of 2010 (HR 4796) is a new piece of bi-partisan legislation introduced on March 9, 2010. It is designed to streamline Medicare Secondary Payer reporting and provide some finality for insurers required to reimburse Medicare for “conditional payments” of medical expenses. This legislation would address many concerns raised by reporting requirements, as well as from recent lawsuits filled by the government seeking recovery.

Section 111 reporting requirements are complex and, if not done correctly, can result in significant fines. I previously addressed how serious the government was in seeking recovery in my posting  Warning – Medicare Secondary Payer (MSP): Government sends strong message and goes after non-compliance. In that article, I discussed a case where the government went after all the parties (attorneys and insurance companies) for not reimbursing medicare following a 2003 class action. Several issues were raised in that case that clearly sent a message to carriers about the government’s intentions and raising significant concerns around other issues. The process has been so confusing, and created so many questions,  that the production date for reporting was again postponed till January 2011 (see Important Update: Medicare Secondary Payer changes production date to January 1, 2011).

The Medicare Advocacy Recovery Coalition (MARC) was formed in 2008 to advocate for the improvement of Medicare Secondary Payer requirements. “The current Medicare Secondary Payer (MSP) process places considerable impediments upon the flow of needed information, beneficiaries’ ability to settle claims, and everyone’s ability to promptly reimburse the Medicare trust fund,” said Roy Franco, co-chairperson of MARC and director of risk management services for Safeway Inc. “These roadblocks discourage settlement, slow down the return of trust fund dollars, and ultimately rendering many cases involving Medicare beneficiaries unsettlable.” (see MARC Coalition Supports Medicare Secondary Payer Enhancement Act (MSPEA)/H.R. 4796)

Potential Changes to MSP Would Streamline Reporting and Address Many Concerns

HR 4796 is an attempt to address some of the problems with the reporting requirements by:

  • Allowing the government discretion in determining when to impose penalties for rules violations;
  • Establishing a 3 year statute of limitations, limiting the government’s time to sue companies for failing to comply with the rules;
  • Limit Medicare Secondary Payer recovery to claims of $5,000 or more which would prevent CMS from seeking recovery for less than that amount;
  • Eliminate the requirement that claim notifications to CMS contain the claimant’s Social Security numbers, helping to reduce fears that securing social security numbers in liability settlements would expose reporting to possible exposure should the information be misused;
  • Call for CMS to provide to claimants and insurers the amount of a “conditional payment” the agency will demand, within a certain time frame, before parties settle a claim; and
  • amend the current penalty assessed an applicable plan that fails to report claims payments under Section 111 from $1,000 a day to “up to” $1,000 a day based upon the “intentional nature of the violation”

Providing the limitations noted above would go along way to answering many of the questions that have been raised over the last several month.

Some related articles:

These proposed changes would be a significant improvement, and the progress of this legislation needs to be watched closely.


Some background on the Medicare Secondary Payer Act and New Reporting Requirements

The Medicare Secondary Payer Act has been in place since the early 1980’s. The act allowed Medicare to seek reimbursement for money an insurance company or self insured pays on behalf of a Medicare beneficiary. MSP covers all carriers, self-insureds, no fault insurance, and workers’ compensation insurance.  In the past, Medicare’s ability to track and enforce these claims was limited. With the passage of the SCHIP Extension Act of 2007, Medicare was given new tools to track payments. The passage alone marked the start of new steps to increase enforcement by the Federal Government to collect on the Secondary Payer provisions. As part of the Act, the Responsible Reporting Entity (carrier or self-insured) must advise Medicare when a claim is received involving a Medicare beneficiary recipient. Responsible Reporting Entities now have an ongoing requirement to determine from time to time whether a claimant is a Medicare eligible recipient.

For more extensive information about the Medicare Secondary Payer Act and the new reporting requirements, please look to these valuable links:

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