Category Archives: Medicare Secondary Payer

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

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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:

Medicare Secondary Payer Allows Direct Data Entry For Small Reporters Of Claims

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Good news: CMS allows reporting without the need to submit electronic files

In an alert posted to the Centers for Medicare & Medicaid Services (CMS) website, the government announced a new Direct Data Entry option for Liability Insurers, Self Insureds, No-Fault and Workers’ Compensation carriers. This should be welcome news to those companies struggling to meet data feed requirements mandated by the Medicare Secondary Payer Mandatory Reporting Provisions in Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007.

With this new option, a carrier or self-insured need not develop, test and manage claim reports through a data feed. While not without its limitations, the ability to enter single reports will be an applauded method for those entities with minimal reporting.

As I previously wrote about in Important Update: Medicare Secondary Payer changes production date to January 1, 2011, CMS changed the production date for reporting to January 1, 2011.  Given the complex nature of the new reporting guidelines there has also been a recent bill submitted in congress to amend the statute (see Medicare Secondary Payer Enhancement Act). It seems clear that as the new reporting requirements have been put to the test, the government is making an effort to improve the process.

Who can use the Direct Data Entry

Those Responsible Reporting Entities (RRE) that are considered “Small Reporters” may utilize the Direct Data Entry method for compliance with the Section 111 requirements. The CMS Alert defines a Small Reporter as one who would submit 500 or fewer Non Group Health Plan (NGHP) claim reports per year. It is important to note that claim reports resulting in a “no beneficiary” match will still count against the 500 claim limit.

Direct Data Entry Option Considerations

  • Those Small Reporters wishing to use this method for reporting will be able to register for the new option beginning on October 1, 2010
  • Reports can begin to be filled using the Direct Data Entry method beginning January 3, 2011
  • Injured party information will be matched in real-time as entered. Once the basic injured party information is entered if a match is not found then no further data elements will be required (this will however still count toward the 500 limit)
  • There are no changes to the number of data elements required to be reported
  • All RRE responsibility and accountability to report remains the same when using the Direct Data Entry option

Eliminating the need to create and submit electronic reports should alleviate issues for the Small Reporters and make compliance easier.

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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:

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

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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.

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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:

Important Update: Medicare Secondary Payer changes production date to January 1, 2011

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The Centers for Medicare/Medicaid Services (CMS) have announced the following:

CMS advises all NGHP RREs that the date for first production NGHP Input Files is changed from April 1, 2010 to January 1, 2011, effective immediately.

Read the complete announcement at the CMS website in “What’s New.”

This is clearly a welcome change and one that has been been sought by various industry organizations including the American Insurance Association. As Peter Foley, AIA’s VP for claims stated in a Business Insurance article released February 17, 2010 – “Pushing back the deadline is the right move, and I commend CMS for making this decision,”

The Medicare Advocacy Recovery Coalition (MARC) also applauded the decision to defer the reporting deadline for Section 111 as reported by the PR Newswire.

“The industry has been working diligently to build in infrastructure to supply data to CMS, investing millions of dollars to ensure compliance with the data share regulation.” said Roy Franco, co-chairperson of MARC and director of risk management services for Safeway Inc.  “Unfortunately, there have been unforeseen difficulties and unanswered questions regarding the reporting process, and everyone’s ability to get the job done by April 1.”

While there is still much to do, and questions to be answered, the additional time will hopefully allow those entities to get their processes in place.

This is by no means a reason to delay action as the fines for non-compliance are great.

(see my prior post: Warning – Medicare Secondary Payer (MSP): Government sends strong message and goes after non-compliance).

Warning – Medicare Secondary Payer (MSP): Government sends strong message and goes after non-compliance

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The Feds get serious about seeking Medicare recoveries

If you are an insurance company or self-insured, and make payments on liability or workers’ compensation claims, be aware that the Federal Government has filed a lawsuit signaling their intent to be aggressive in seeking reimbursement. As reported in Business Insurance, this “case breaks new ground because CMS simultaneously named insurers, settlement beneficiaries and plaintiffs attorneys all in one lawsuit.”  This case should alert all that if you make a payment on an injury claim, and fail to let the Government know about money they should be collecting, they will come after you.

Implications abound for attorneys and insurance companies in this first of its kind lawsuit

The lawsuit, brought in U.S. District Court for the Northern District of Alabama (U.S. v. Stricker, et al), seeks money and injunctive relief as result of a $300 million 2003 settlement of case involving injuries caused by PCB exposure (Abernathy v. Monsanto Co., et al.). The complaint names the defendants in the underlying case, the insurance companies (Travelers and AIG), the actual plaintiffs who received the settlement, and their various attorneys. The government alleged that over 900 of the plaintiffs that received compensation for medical expenses were also Medicare beneficiaries that had received medical payments. As part of the damages, the Government is seeking double the amount of Medicare payments plus interest (see Medicare Lien and Set-Aside Blog).

The crux of the government’s damage claim is to seek double the amount of payments made by Medicare as well as an injunction to force the defendants to reimburse Medicare prior to making any future settlement dollars to the claimants. As required by the Medicare Secondary Payer Act, the government’s complaint also alleges that the insurance providers failed to determine whether any of the settling plaintiffs were Medicare beneficiaries nor did they reimburse Medicare for payments that had been made to those beneficiaries. In addition to the insurance companies, the suit alleges plaintiff’s attorneys received $129 million of the settlement funds for claimants that they knew or should have known were Medicare eligible.

Implications and issues to be concerned about

  • Attorneys (and their Professional E&O Carriers) beware: By naming the attorneys, the Government is clearly signaling that they will be seeking recovery and fines from those that fail to follow the law. A plaintiff’s attorney that fails to make payments to Medicare on behalf of their clients, or fails to properly provide information to the defense, could be significantly exposed.
  • Costs to insurers will go up: The process to establish and update the reporting information will be costly. Those carriers with good claims systems will be ahead of the game and can lower their expenses, however, resources will need to be allocated to maintain the requirements.
  • Older cases may need to be revisited: While many believed that Medicare would only be going after future liability settlements, this case involves a claim that was settled in 2003. It is not clear how this aspect of the case will be resolved, however, it could be exceptionally expensive if carriers or self-insureds have to review closed matters from 7 years back.
  • Indemnity reserves may need to be adjusted: It is possible that plaintiff’s attorneys will be seeking higher amounts in cases where Medicare liens would significantly impact settlement amounts. If this trend takes hold then reserves on existing claims involving bodily injury may need to be adjusted to deal with increased claim exposures.
  • It’s time to get those systems in order: Given the potential risks, it is important to fully understand the rules and requirements established by the recent SCHIP Extension Act of 2007. There has been a push by insurance companies to ensure they are in compliance with these new notification rules, including new procedures and claims system modifications.  Failing to comply could be a costly mistake.

Clearly this case is a warning of things to come!

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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:

What do you think? Join in the conversation. Post your comments, questions, observations, thoughts, suggestions, musings, ideas for future topics, or other feedback. Or email me directly.