Issue # 43    February 10, 2008
 

NEW MEDICARE SECONDARY PAYER REPORTING REQUIREMENTS

 

By, John J. Campbell, CELA, MSCC

 

            The “Medicare, Medicaid and SCHIP Extension Act of 2007” (MMSCHIP) was signed into law by the President on December 29, 2007.  This new law contains new and strict provisions amending the Medicare Secondary Payer Statute (42 U.S.C. §1395y).  In particular, these provisions impose reporting requirements upon Group Health Plans, liability insurance plans (including self-insurance), no-fault insurance plans and worker’s compensation plans.

 

            Section 7 of the MMSCHIP deals with reporting requirements by Group Health Plans (GHPs).  These requirements will go into effect on January 1, 2009.  At that time, GHP insurers, and third party administrators, as well as administrators and fiduciaries of self-insured plans, will be required to provide information to the Centers for Medicare and Medicaid Services (CMS) to enable it to identify situations in which Medicare is secondary payer.  The exact information required is not specified, but is left up to the Secretary of Health and Human Services to define.  Penalties for non-compliance are stiff:  $1,000 per day that the GHP is out of compliance.

 

            Section 8 of the MMSCHIP imposes similar requirements on liability insurance plans (including self-insured plans), no-fault insurance plans and worker’s compensation plans.  These requirements will not become effective until July 1, 2009.  In particular, the MMSCHIP requires that, whenever there is a settlement, judgment, award or other payment (regardless of whether there is an admission of liability) on or after July 1, 2009, applicable plans shall:

 

(i) determine whether a claimant (including an individual whose claim is unresolved) is entitled to benefits under the program under this title on any basis; and

(ii) if the claimant is determined to be so entitled, submit information described in subparagraph (B) with respect to the claimant to the Secretary in a form and manner (including frequency) specified by the Secretary.

 

            The specific information that plans will be required to submit will include the identity of the claimant, as well as any other information necessary to make a determination regarding coordination of benefits.  Which additional information will be necessary will be defined by the Secretary of Health and Human Services, but is likely to be similar to what CMS requires with the submission of a Medicare Set-Aside Arrangement.      

 

            The MMSCHIP does not specify how soon after a judgment, settlement or award the plan must submit the required information.  This will likely be determined by regulations, policy statements or program instructions.  However, failure to file the required information within whatever time is eventually specified will result in a civil money penalty of $1,000 per day.  This penalty is in addition to any Medicare Secondary Payer claim for which the plan, as primary payer, may be liable.

 

            These reporting requirements will apply to all applicable plans under the Act.  These plans are defined as liability insurance (including self-insured plans), no-fault insurance and worker’s compensation laws or plans.  It will almost certainly include any self-insured worker’s compensation plans as well.

 

            All applicable plans will need to institute internal procedures for compliance with the new reporting laws.  Initially, plans will need to determine the Medicare eligibility status of every claimant, regardless of whether the claim has been resolved.  This will require that each claimant be required to sign a Social Security form SSA-3288 (Consent to Release Information).  This form can be submitted to the Social Security office closest to the claimant’s residence with a request for complete benefit eligibility information.  Ideally, this should be done at the time the claim is opened and again at the time the claim is resolved through judgment, settlement or award.  The reason for repeating this procedure is that a claimant who is not eligible for Medicare at the time the claim is opened may become eligible by the time the claim is resolved; and the burden for determining the claimant’s Medicare eligibility is on the plan.

 

           Plans will also need to collect identifying information on all claimants when their claims are opened.  This would include, at a minimum, the claimant’s full name, date of birth, Social Security number, and Medicare HIC number, if applicable. 

 

            Plans will also need to institute procedures to ensure compliance with the actual reporting requirements.  Those particular procedures will depend somewhat on what information is eventually required by CMS.  Likely, the information required will be substantially similar to the information required with the submission of a Medicare Set-Aside arrangement.  Therefore, plans will likely have to submit the claimant’s Social Security or Medicare HIC number; a copy of the judgment or settlement; medical information, such as medical records, applicable ICD-9 codes, life care plans or Medicare Set-Aside cost projections; life expectancy information; the plan’s payment history on the claim and any other documentation that may be helpful in determining whether Medicare’s interests were reasonably considered.  As a result, most worker’s compensation plans will already have procedures in place to obtain and organize this information.  Liability and no-fault plans should be able to duplicate those types of procedure without having to “re-invent the wheel.” 

 

            The new reporting requirements are surely a sign that CMS will be increasing its efforts to enforce its secondary payer status in liability settlements, similar to its enforcement efforts in worker’s compensation settlements since July, 2001.  For over two years, the Medicare Set-Aside industry has been aware of CMS’ increasing interest in liability settlements and the need to “reasonably consider Medicare’s interests” in those settlements.  While CMS has yet to enact regulations or release specific policy memoranda regarding Medicare Set-Asides in liability settlements, this new legislation is almost certainly a sign that such regulations or policy memoranda will be coming very soon.

 

            It is important to note here that CMS’ current position regarding its continued status as secondary payer following liability settlements predates the MMSCHIP and is based upon the Medicare Secondary Payer statute itself.  Thus, compliance with those secondary payer provisions, which have been part of federal law for over twenty years, is already required.  The new legislation merely imposes a new reporting requirement designed to allow CMS to more effectively enforce its existing rights.  While the reporting requirements may not go into effect until July 1, 2009, the requirement for secondary payer compliance in liability settlements is in effect now.  

  

  

 

         John J. Campbell, the founder and principal attorney of the Law Offices of John J. Campbell, P.C., has practiced law since 1986; and has practiced in the areas of Elder Law and Medicare Set-Asides since 1996.  Mr. Campbell is certified as an Elder Law Attorney by the National Elder Law Foundation;* and is a Medicare Set-Aside Consultant Certified (national certification through the Commission on Health Care Certification).*  Mr. Campbell is licensed to practice law in Colorado and is also licensed and on inactive status in Missouri.  He is a member of the Colorado Bar Association (Trust & Estate Section and Elder Law Section), the Arapahoe County Bar Association, the Missouri Bar Association, the National Academy of Elder Law Attorneys and the National Alliance of Medicare Set-Aside Professionals.  His areas of concentration include elder law; estate, disability and long term care planning; probate; guardianship and conservatorship; Medicare, Medicaid, Medicare Set-Aside Arrangements, and the preservation of public benefits in catastrophic third party liability and worker’s compensation settlements.  Mr. Campbell has published numerous articles and has presented numerous seminars on issues relating to Medicare Set-Aside Arrangements across the country.

 

*The State of Colorado does not certify attorneys as experts in any field.

 

 

 

 

The Law Offices of John J. Campbell, P.C. is pleased to introduce THE COMPLETE MSA TRAINING COURSE!  This comprehensive study course provides thorough core training on Medicare Set-Asides and related issues.  "The Complete MSA Training Course Book" is also available separately in hard copy or on CD Rom.  For more information, CLICK HERE.

 

 

The National Alliance of Medicare Set-Aside Professionals (NAMSAP) is dedicated to ensuring the highest quality of services and standards of practice for the Medicare Set-Aside industry. NAMSAP is the first non-profit organization in the country serving professionals in Medicare Set-Aside practice.  For complete information about NAMSAP, visit their web site:   www.namsap.org

 

 

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