David Piatt founded Piatt Consulting and is the principal shareholder and Managing Partner of Medicare Consul Services LLC (MCS), an independent business dedicated to Mandatory Insurer Reporting services. He started Piatt Consulting based on his experience managing Medicare's national recovery ("liens") efforts as the Program Director of the Medicare Secondary david_piatt_smPayer Recovery Contract (MSPRC). Working with the Centers for Medicare and Medicaid Services (CMS) to consolidate and standardize the disparate ways the previous 38 separate recovery contractors handled the recovery, he streamlined or reinvented almost every process.  He also represented the interests of the MSPRC in meetings with the COBC and CMS in the of development the Section 111, Mandatory Insurer Reporting requirements and processes.  Those modifications are still reflected today in the NGHP User Guide.  After leaving he was an avid advocate of the insurance industry and can be credited with clarifying who is and is not a Responsible Reporting Entity (RRE), liability reporting thresholds and reporting timelines.  He continues that advocacy today as new questions and problems arise.

Mr. Piatt is a frequent speaker on Medicare Secondary Payer laws, Health and Human Resources (HHS) regulations and CMS policy for national insurance associations, defense attorney associations and plaintiff attorney associations.  He has consulted with Fortune 100 insurers on meeting MSP laws and Mass Tort issues. The company's software reporting solution, Medicare Consul Services (MCS), is used by agents to process claims for self-insured Fortune 100 and Fortune 500 companies, as well as by Third Party Processors for self-insured Government and commercial insurers.tiv

Mr. Piatt has held senior executive positions in commercial business and government contracting. He began his career as an aerospace engineer and transitioned to developing complex information technology solutions for the payment processing and the banking industry.

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Background - Medicare Secondary Payer (MSP)

The Medicare Secondary Payer (MSP) provisions, section 1862(b) of the Social Security Act prohibit Medicare from making payment if payment has been made or can reasonably be expected to be made by the following primary plans when certain conditions are satisfied: group health plans, workers’ compensation plans, liability insurance, or no-fault insurance.

MYTHS about Mandatory Insurer Reporting and Medicare Secondary Payer

Unfortunately there are many myths about reporting and recovery.  Every Responsible Reporting Entity (RRE) should be sure to perform some due diligence to ensure they are not being misinformed by various publications, websites or sales pitches.  This article attempts to debunk some of these myths.  While its editor strives to keep it current and use quotes from CMS where they exist, there may be some out-of-date information lurking in one of the hundred or so articles.  Check the CMS web site and documentation regularly.  If you have a question about anything you read within, please drop us an email or ask a question about it on one of the many CMS teleconferences -- everyone likes to hear Barb Wright layout specifics.

If you are Still Confused?

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Piatt Consulting offers Medicare Reporting Agent Services, Software for Reporting Agents and Medicare Claims Resolution (About Us).

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The Myths

(click on the underlined words to jump to the article)

  • MSAs - You have to settle all of your Workers' Compensation claims through a structured settlement (MSA) as part of preparing for Mandatory Insurer Reporting.
  • Recoveries - Medicare will seek to recover funds from Insurers
  • Recovering more than the Settlement Amount -- Medicare will seek recovery for more than the settlement
  • Liability Set-Asides - Medicare requires a liability set-aside
  • Reporting - You have to report claimants that are eligible for Medicare

Some Facts

Medicare Set-Asides (MSA) and Mandatory Insurer Reporting - MSAs are not required in order to close your workers' compensation cases.  Medicare has provided explicit direction in the NGHP User Guide (paragraph 11.9) that states that, "For ORM assumed prior to January 1, 2010, if the claim was actively closed or removed from current claims records prior to January 1, 2010, the RRE is not required to identify and report that ORM under the requirement for reporting ORM assumed prior to January 1, 2010."  Medicare has clarified that statement during teleconferences to mean that if you administratively closed the case through common business practices or by State statue, the case does not have to be reported.  Insurers do not have to go back and "close" each case through a structured settlement or MSA.

Medicare does not seek recovery directly from Insurers - The Medicare Secondary Payer Recovery Contractor (MSPRC) is responsible for recovering "overpayments" "conditional payments" or as some in the industry call them "liens." The MSPRC also recovers "mistaken payments" (see our November 2011 News letter for a description of mistaken payments:  ORM Reimbursement Demands) from GHP insurers acting on behalf of their covered employers and workers' compensation carriers or other insurers that accept ongoing responsibility for paying for medical claims (reported as Ongoing Responsibility for Medicals or ORM).  The MSPRC recovers settlements from beneficiaries, not insurers.  The MSPRC follows the money.

Statutes may support recovery from insurers in a civil suit. The MSPRC does not pursue insurers, but in 2009 Medicare's attorneys tried to recover from plaintiff attorneys, insurers and their defendants through the civil courts (see US vs Stricker).  The action was triggered by the failure by Stricker et al (a plaintiff attorney firm) to report a mass tort settlement, which cost Medicare the opportunity to pursue recovery from the claimant - beneficiaries. Stricker, unfortunately, was dismissed by the court based on expiration of the statute of limitations before Medicare's right of recovery was decided.  Reporting under Section 111, Mandatory Insurer Reporting should prevent that particular situation from occurring again.

Medicare does not require Liability Set-Asides - Medicare's requirement is that funds allocated in a settlement for "future medicals" must be properly expended by the beneficiary on medical claims related to the injury before Medicare will once again pay primary.  Medicare does not require that a workers' compensation or liability settlement MSA be set-up, reviewed or approved by Medicare. Insurers acting in an abundance of caution, may wish to get an MSA to avoid being the possibility Medicare may seek recovery in a civil action (e.g. US vs Stricker).

Enrolled vs Eligible - You only have to report payment, judgment or award to enrolled Medicare beneficiaries -- Medicare does not require you to report Medicare "eligible" claimants.  If you have assumed responsibility for ongoing payments (ORM) and you are still responsible for medical claims when the claimant enrolls in Medicare, then you report that individual at that time.

Medicare will not seek to recover more than the settlement amount -- By Health and Human Services Code of Federal Regulations Medicare can not recover more than the settlement amount.  If, for instance, the Insurer settles the claim for $2,000, but the medicare conditional payments (lien) exceed that amount, Medicare only seeks recovery from the settlement amount minus any procurement costs (e.g., attorney fees).

Responsible Reporting Entity (RRE)

Deciding who is and who is not an RRE is not always straightforward for self-insured organizations.  Self-insureds in particular should review the "Self-Insured" sub-link to familiarize themselves with some of the variations.  If you need help, please feel free to contact Piatt Consulting for help.

Group Health Plans

(GHP) Arrangements (42 U.S.C. 1395y(b)(7)) -- Insurer
For purposes of the reporting requirements at 42 U.S.C.1395y(b)(7), an insurer is an entity that, in return for the receipt of a premium, assumes the obligation to pay claims described in the insurance contract and assumes the financial risk associated with such payments. In instances where an insurer does not process GHP claims but has a third party administrator (TPA) that does, the TPA has the responsibility for the reporting requirements at 42 U.S.C. 1395y(b)(7).

Third Party Administrator (TPA)
For purposes of the reporting requirements at 42 U.S.C.1395y(b)(7), a TPA is an entity that pays and/or adjudicates claims and may perform other administrative services on behalf of GHPs (as defined at 42 U.S.C. 1395y(b)(1)(A)(v)), the plan sponsor(s) or the plan insurer. A TPA may perform these services for, amongst other entities, self-insured employers, unions, associations, and insurers/underwriters of such GHPs. If a GHP is self-funded and self-administered for certain purposes but also has a TPA as defined in this paragraph, the TPA has the responsibility for the reporting requirements at 42 U.S.C. 1395y(b)(7).

CMS is locked into the GHP reporting requirements of 1395y(7)(A)  "...an entity serving as an insurer or third party administrator..."  Although CMS has not issued any written guidance, CMS has made it clear during subsequent teleconferences that the Insurer, not the TPA, is responsible for reporting, but may use a TPA as a vehicle for reporting -- editor

Non-Group Health Plans (Workers' Comp, Liability and No-Fault)

42 U.S.C. 1395y(b)(8) defines a responsible reporting entity (RRE) to be an applicable plan:
Applicable Plan - In this paragraph, the term `applicable plan' (e.g., trust --ed) means the following laws, plans, or other arrangements, including the fiduciary or administrator for such law, plan, or arrangement:

  • Liability insurance (including self-insurance).
  • No fault insurance.
  • Workers' compensation laws or plans.

Liability and No-Fault Insurer

The insurer may or may not assume responsibility for claims processing; however, the insurer has the responsibility for the reporting requirements at 42 U.S.C. 1395y(b)(8) regardless of whether it uses another entity for claim processing.

Workers' Compensation

The Federal agency, the State agency, or self-insured employer or the employer’s insurer.  Where such a plan is directly funded by the employer, the employer has the responsibility for the reporting requirements at 42 U.S.C. 1395y(b)(8). Where such a plan is indirectly funded by the employer, the insurer has the responsibility for the reporting requirements at 42 U.S.C. 1395y(b)(8).

When you need multiple Reporter IDs

A Responsible Reporting Entity is assigned a unique Reporter ID and a Reporter ID can only be used once a quarter to report to Medicare.  If your firm has the need to report more than once per quarter, then you must request multiple Responsible Reporting Entities (Reporter IDs).  For instance, if you firm has multiple Third Party Administrators because of different insurance types, volume or acquisitions, and each TPA needs to report each quarter, you must register multiple Responsible Reporting Entities.

Our software reporting solution, Medicare Consul Services, provides the means to manage one or multiple Responsible Reporting Entities and Reporter IDs.

Agents

For purposes of the reporting requirements at 42 U.S.C. 1395y(b)(7), agents may submit reports on behalf of :

  • Insurers for GHP, No-Fault or Liability Insurance
  • Self-insured entities for liability
  • Workers compensation laws or plans
  • TPAs for GHPs
  • Employers with self-insured or self-adminstered GHP plans

Accountability for submitting the reports in the manner and form stipulated by the Secretary and the accuracy of the submitted information continues to rest with each of the above-named entities.

Disclaimer -- Piatt Consutling and our staff cannot render legal, accounting or medical service.  We can only try to provide accurate and authoritative information in regard to the subject matter covered.  If legal advice or other expert assistance is required, the services of a competent professional in that area should be sought.