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Medicare Mandatory Insurer Reporting:
Delayed and Confused
By Gregg Chapman, Esq.
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Gregg Chapman, Esq. specializes
in structured settlements of workers’ compensation cases.
In the last issue he debunked myths
about Medicare Set-Asides;
in this article he makes it clear that the new Medicare reporting
provision is totally unrelated to and has no impact on Medicare
Set-Asides.
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There has been much confusion regarding
the new Medicare Mandatory Insurer reporting law. It is important
to cut through the misinformation and understand what the obligations
are for the Insurer as well as the responsibilities of the applicant
attorney when it finally goes into effect (it was just delayed for
the third time). Finally, we will make it clear that this new reporting
provision is totally unrelated to and has no impact on Medicare Set-Asides.
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| This new reporting provision
is totally unrelated to and has no impact on Medicare Set-Asides. |
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The new law, Section 111 of the Medicare,
Medicaid, and SCHIP Extension Act of 2007, adds mandatory reporting
requirements with respect to Medicare beneficiaries who have coverage
under group health plan 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. For the purpose of this article,
we will focus primarily on workers’ compensation.
Section 111
is an amendment to the Medicare Secondary Payer [MSP] provisions
(42 U.S.C. 1395y(b)(8)). Workers’ compensation is a primary
payer to the Medicare program for Medicare beneficiaries’ work-related
illnesses or injuries. If a Medicare beneficiary has workers’ compensation
coverage, providers, physicians, and other suppliers must bill workers’ compensation
first. If responsibility for the workers’ compensation claim
is in dispute and workers’ compensation will not pay promptly,
the provider, physician, or other supplier may bill Medicare as primary.
If the item or service is otherwise reimbursable under Medicare rules,
Medicare may pay conditionally, subject to later recovery if there
is a subsequent settlement, judgment, award or other payment. Additionally,
Medicare conditional payments occur when a provider incorrectly bills
Medicare instead of the workers’ compensation carrier.
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Section
111 is an amendment to the Medicare Secondary Payer (MSP) provisions
(42 U.S.C. 1395y(b)(8)) which, inter alia, adds mandatory reporting
requirements with respect to Medicare beneficiaries who receive
workers’ compensation settlements.
See Medicare Secondary
Payer Mandatory Reporting.
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The primary purpose of the Section
111 reporting process is to make certain that all parties to a settlement
fully comply with the MSP requirement that Medicare be reimbursed
for conditional payments made. Section 111 requires Insurers (aka “Responsible
Reporting Entities” [RREs]) to report information identifying
which applicants are Medicare beneficiaries as well as claim information
which includes date of injury, type of injury (including ICD-9 diagnostic
codes), settlement information, etc. This information will allow
CMS to check if any conditional payments were made and enhance recovery
efforts.
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The primary purpose of the Section
111 reporting process is to make certain that all parties to a settlement
fully comply with the MSP requirement that Medicare be reimbursed
for conditional payments made.
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Prior to passage of Section 111, it
was the responsibility of Medicare-entitled applicants, their attorneys,
the insurer or the employer to verify and reimburse any conditional
payment claims. CMS makes it clear that Section 111 does not alter
or remove any current MSP rules, but adds to existing MSP requirements.
As a result, applicants, their attorneys, Insurers and employers
are still obligated to confirm and resolve Medicare’s conditional
payments. The impetus of this new provision was obviously not workers’ compensation
since the relative occurrence of conditional payments is low when
compared to liability insurance claims since the workers’ compensation
carriers typically cover the medical expenses.
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Applicants and their attorneys
are still obligated to confirm and resolve Medicare’s conditional
payments.
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It is clear upon reviewing the discussion
in Congress that the main target of this provision was liability
insurance. The belief was that plaintiffs were having Medicare pay
for medical expenses while their lawsuits progressed. Upon settlement,
none of the parties involved contacted Medicare and thus there was
no conditional payment reimbursement. Thus, with the insolvency of
Medicare looming, Congress decided to make it mandatory to report
these settlements, with the onus on the insurer. To make sure this
was finally taken seriously, the legislation includes a $1,000 per
day penalty, to be paid by the Insurer, for failure to report. Even
though liability insurance was the major perpetrator, all the other
types of insurance (workers’ compensation, no fault and group
health) were included.
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To make sure this was finally
taken seriously, the legislation includes a $1,000 per day penalty,
to be paid by the Insurer, for failure to report.
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Since the reporting requirements only
apply to cases involving applicants enrolled in Medicare, the first
and most important step in the process is to determine if the individual
is a Medicare beneficiary. RREs have been granted access to a query
function developed by CMS that can determine whether or not an individual
is a Medicare beneficiary. It is quick, easy and paperless. The RRE
electronically sends four pieces of information (applicant’s
name, SSN, gender and date of birth) to CMS which they check in their
database and then respond with a yes or no reply as to whether the
individual is a Medicare beneficiary. If yes, then the RRE knows
to proceed with the reporting by sending the additional data required
to CMS on a quarterly basis.
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Since the reporting requirements
only apply to cases involving applicants enrolled in Medicare, the
first and most important step in the process is to determine if the
individual is a Medicare beneficiary.
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Section 111 has no impact on Medicare
Set-Asides [MSAs]. MSAs are not mentioned anywhere in the provision
and CMS representatives involved in the dozens of Town Hall Teleconferences
repeatedly explained that this provision has nothing to do with MSAs.
As previously indicated, Section 111 was primarily designed for reimbursement
of conditional payments. Medicare conditional payments deal with
expenses paid up until settlement of the claim. MSAs on the other
hand deal with future medical expenses that could exist after settlement
of the claim. Much of the confusion was created by MSA vendors who
originally portrayed this new reporting provision as requiring MSAs
for liability claims. This is not the case.
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Section 111 has no impact on
Medicare Set-Asides (MSAs). Much of the confusion was created by
MSA vendors who originally portrayed this new reporting provision
as requiring MSAs for liability claims. This is not the case.
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CMS recently delayed the official
start of Section 111 for the third time. The new timeline has full
implementation of the Mandatory Insurer Reporting pushed back from
April 1, 2010 to January 1, 2011. In the meantime, RREs have the
ability to test submission of files.
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The new timeline has full implementation
of the Mandatory Insurer Reporting pushed back from April 1, 2010
to January 1, 2011.
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In conclusion, with the insolvency
of Medicare on the horizon, Congress passed Section 111 to assist
CMS in recouping Medicare conditional payments. This has placed an
additional burden on insurers to determine which applicants are Medicare
beneficiaries and submit data about these claims to the Coordination
of Benefits Contractor. All settling parties including the applicant
and their attorney still have the responsibility to determine if
conditional payments exist and to make sure Medicare is repaid if
appropriate. Thus, there should always be a provision in the Compromise
and Release addressing conditional payments and indicating who is
responsible for reimbursing Medicare. Medicare Set-Asides are a separate
issue and are unrelated to Section 111.
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All settling parties including
the applicant and their attorney still have the responsibility to
determine if conditional payments exist and to make sure Medicare
is repaid if appropriate. Thus, there should always be a provision
in the Compromise and Release addressing conditional payments and
indicating who is responsible for reimbursing Medicare.
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Gregg Chapman has been a member of the State Bar of California
for twenty years. Over the last eight years, he has worked for two
of the largest national MSA vendors in various positions including
General Counsel, National Sales Manager and Director of MSA Education.
He has provided hundreds of presentations on all topics regarding
Medicare Set-Asides to the insurance industry and attorney associations
across the country.
To contact
Gregg Chapman:
Gregg Chapman, Esq,
National Settlement Consultants
12039
Jefferson Blvd.
Culver City, CA 90230
Phone: 800-845-2969
Fax:
310-450-3132
Email: greggchap@aol.com
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