Insurers and Self Insured Face Reporting Challenges and Heavy Non-Compliance Penalties

In an effort to further protect the Medicare Trust Fund for future generations, Medicare has mandated and expanded upon their once Voluntary Data Sharing Agreements (VDSAs) with Section 111, Mandatory Insurer Reporting. These reporting requirements are levied on Responsible Reporting Entities (RREs) and include insurers, third party administrators and self-insured plan administrators or fiduciaries.

In support of Medicare's cost avoidance (pre-pay) efforts, many insurers were reporting Medicare enrolled employees covered by their Group Health Plans through VDSAs. Medicare's new reporting requirements mandate minor changes (one additional piece of information) for GHP, but add an entirely new requirement to address recovery (post-pay) -- reporting liability, no-fault and workers compensation payments, judgments or awards.

In order to meet the mandate insurers and self insured will have to address:

  1. Determining which insureds / claimants are Medicare Beneficiaries
  2. Determining if a Medicare Beneficiary claimant is a spouse of an insured
  3. Collecting additional information from employers,
  4. Collecting information from claimants,
  5. Collecting information from claimant's attorney,
  6. Gathering information from disparate internal computer systems,
  7. Generating and managing the reporting process and
  8. Dealing with errors and rejections from the Coordinator Of Benefits Contractor (COBC).

Group Health Plan reporting under the new statue begins in January, 2009 with existing VDSA reporting entities. GHP insurers and self-insured that have not reported in the past, will be required to begin testing with Medicare in the first half of next year.

Liabilty, Auto No-Fault and Workers Compensation reporting entities will be required to begin reporting on 1 July, 2009. Most insurers and the self insured will find the eight months alloted to meet all six steps above challenging.

The penalties for untimely reporting are significant. An entity, plan administrator, or fiduciary that fails to comply with the requirements shall be subject to a civil money penalty of $1,000 for each day of noncompliance for each individual for which the information should have been submitted. For instance, if a workers compensation plan fails to report 20 individuals for 20 days, the penalty would amount to $400,000.00.