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Here We Go Again! CMS Postpones Deadline For P&C Mandatory Reporting Until January 1, 2012

For The Second Time, The Department Of Health And Human Services Centers Gives Carriers More Time To Comply

In an alert dated November 9, 2010, The Department of Health and Human Services Centers for Medicare and Medicaid Services (CMS) announced that it will delay the implementation of the Medicare Secondary Payer (MSP) mandatory reporting requirements for property & casualty insurers until January  2012 for liability claims that do not involve on-going medical responsibility.

As expected, this is welcome news to the insurance industry as reported in the Insurance Journal:

“We are pleased that CMS decided to push back the reporting deadline again until more specific guidelines can be provided on several outstanding issues,” said Peter Foley, American Insurance Association’s vice president for claims administration and chair of AIA’s MSP Task Force. “The insurance industry will comply with the requirements, but complete and correct information is needed so that the industry’s data can be assembled in the most useful way possible for CMS.”

New Insurance Coverage to deal with potential reporting liability

Over the past year there as been much discussion about both the complexity and issues surrounding the implementation of mandatory reporting requirements. As The Claims SPOT previously reported on corrective legislation in Medicare Secondary Payer Enhancement Act Being Introduced in Congress Could Address Many Concerns of Section 111 Reporting, there are many legal concerns relating to reporting requirements (the bill currently remains in committee). In response to the risks for improper reporting, which include extensive fines, IronHealth (a division of Ironshore) created two new products called the Medicare Reporting & Secondary Payer Act Liability (MRSPAL) policy and the Government Billing E&O policy. These policies are designed to  protect companies handling claims and billing against liabilities that may arise for a failure to comply with these requirements.

As was reported in MyNewMarkets.com (Powered by the Insurance Journal), Josh Stein, chief underwriting officer for IronHealth stated  “the fines and penalties can add up…It’s got people very worried right now because it continues to evolve with how they put the meat on the bones of the legislation.” Uncertainty in how the government will enforce the rules, and the extent of potential fines, makes this new offering a welcome way to protect against potential risks.  What is known is the government has been testing the waters of enforcement in the past few years (see Warning – Medicare Secondary Payer (MSP): Government sends strong message and goes after non-compliance) and the risks are real.

Regardless of whether you feel coverage is needed, the rules are changing and it is important to remain up-to-date.  Help yourself and sign up for email notifications from CMS (sign up here) and stay informed.

Stay tuned as it’s all still evolving!

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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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