Mandatory Insurer Reporting and Medicare Secondary Payer (MSP)

Mandatory Insurer Reporting

Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA Section 111) adds mandatory reporting requirements with respect to Medicare beneficiaries who have coverage under group health plan (GHP) arrangements as well as for Medicare beneficiaries who receive settlements, judgments, awards or other payment from liability insurance (including self-insurance), no-fault insurance, or workers’ compensation.

Who must report? -- Commercial insurers and self-insured entities including pools, captives, group captives, companies with Self-Insured Retention and companies without any insurance.  Small companies, with less than 20 employees, who are not part of a collective insurance program in which any member has more than 20 employees (Small Employee Exception).  These entities are collectively known to Centers for Medicare and Medicaid Services (CMS) as Responsible Reporting Entities (RREs).

What must be reported by a Group Health Plan (GHP)? RREs must report entitlement information about employees and dependents and an option to exchange prescription drug coverage information to coordinate benefits related to Medicare Part D. CMS is also allowing RREs, that are also participating in the Retiree Drug Subsidy (RDS) program or are reporting to RDS on behalf of a plan sponsor, to use the Section 111 GHP reporting process to submit subsidy enrollment (retiree) files to the RDS Center using the Section 111 GHP reporting process.

What must be reported by a workers' compensation, liability or no-fault insurer (Non-Group Health Plan or NGHP)? A NGHP RRE must report information about the insurance plan, payment information, identify the Medicare Beneficiary, define the incident, identify the beneficiary's legal representative and if the beneficiary is deceased, they must identify any claimants their representatives that are pursuing a settlement on behalf of the estate.

Who is a Medicare Beneficiary? CMS distinguishes between an "eligible" and "enrolled" beneficiary.   An "eligible" beneficiary is eligible for additional Medicare benefits (e.g., Part B).  An "enrolled" beneficiary has a Health Insurance Claim Number (HICN) and may bill Medicare for Part A benefits.  Mandatory Insurer Reporting applies to enrolled beneficiaries.  If an individual is currently on Social Security Disability Insurance (SSDI), but has not enrolled in Medicare, they are not to be reported.   See Medicare Beneficiary in the definitions section of the web site for a complete definition.

What are the penalties for not reporting? Medicare may assess a penalty of $1,000.00 per day per unreported beneficiary.

Medicare Secondary Payer: To Preserve and Protect…

Congress implemented the Medicare Secondary Payer (MSP) provisions to protect the Medicare Trust Funds by making sure other insurance pays first when it is appropriate (cost avoidance) and recovering funds when a primary payment was mistakenly made or the beneficiary received funds for their medical costs from another source (recovery).

What is the relationship between Mandatory Insurer Reporting and Medicare Secondary Payer? There has been a great deal of concern and incomplete information about this relationship published in industry news letters and on the Internet.  An RRE's compliance with Mandatory Insurer Reporting is satisfied when they report.  If they report, they will not be liable for the $1,000.00 per day per unreported beneficiary penalty.  Medicare Secondary Payer statues have been applicable since the inception of Medicare for workers' compensation carriers and since 1980 for GHP, liability and no-fault insurance.  MSP process for GHP are well established and though not widely published can be found elsewhere on this web site.  Dealing with Medicare's interest in a workers' compensation case is well established and supported by a cottage industry of Medicare allocators specializing in medical reviews and establishing Medicare Set-Asides.  Many no-fault insurers have regularly dealt with MSP through requesting conditional payment amounts when contemplating settlement and sending exhaust letters to the MSPRC to indicate exhaustion of their payment obligation.  Plaintiff attorneys in liability suits have a long history of dealing with Medicare "liens" or "reimbursements" as the conditional payments are called in their business sector.

Part of the confusion within the industry at the moment centers around liability and arises from consultants' misunderstanding and vendors misleading statements that draw incorrect conclusions from recent litigation, read into statues problems that may never come to pass and fail to understand that with the consolidation of the MSPRC into one contractor in 2006 under the guidance of one CMS entity (Central Office) that things have changed.

For a fuller discussion of the relationship see the Overview for Medicare Secondary Payer.

What you can find on this web site... provides a “wiki-like” reference for the Medicare Community to to use to learn about Medicare Secondary Payer and Mandatory Insurer Reporting.

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