Medicare Secondary Payer Reporting Requirements Affect Liability Insurers Including Auto and Home
By: Travis Miller
Insurers writing liability insurance, including auto and home insurers, should already be in the process of registering to report payments to Medicare beneficiaries under new federal requirements. Although the implementation deadline has been delayed, the requirements still are on the horizon and the penalties for non-compliance are substantial ($1000 per day).
The Medicare, Medicaid, and SCHIP Extension Act of 2007 added a new provision to the Medicare Secondary Payer requirements providing mandatory reporting requirements for group health plans, liability insurance (including self-insurance), no-fault insurance, and workers’ compensation. This article focuses on the application of the new reporting requirements to liability insurers.
Section 111 of the 2007 Act specifies that liability insurers must report to the Centers for Medicare & Medicaid Services (CMS) when Medicare beneficiaries receive settlements, judgments, awards or other payments under liability policies. The purpose of the requirement is to ensure that Medicare does not pay for medical claims that are paid first by another source. CMS implementation guidelines specifically indicate that the reporting requirements will apply to, but are not limited to, auto liability insurance, uninsured motorist insurance, homeowners liability insurance, and malpractice insurance. The requirements also apply to no-fault coverages such as medical payments coverages, personal injury protection coverages, and medical expense coverages under auto or other types of policies.
The obligation to submit reports under the new requirements lies with the so-called Responsible Reporting Entity. In the case of liability insurance, the Responsible Reporting Entity generally is the insurer. In a recent CMS-sponsored telephone conference, CMS officials indicated they are considering whether an affiliated entity, such as a holding company, can serve as the Responsible Reporting Entity for a group of insurers to eliminate the need for multiple registrations for the group. At last check, this issue had not yet been decided, but insurers may proceed to register with CMS individually.
Some insurers might choose to use a third party reporting agency to submit their data. In this case, the insurer should recognize that it is still the Responsible Reporting Entity and remains solely responsible for compliance with the Medicare Secondary Payer reporting requirements and for the accuracy of data submitted.
Insurers are required to report whenever a settlement, judgment, award or other payment is made to a Medicare beneficiary. This is the case regardless of whether or not there is an admission or determination of liability in the claim. Insurers should take note that the new requirements will necessitate collecting data that they likely have not collected in the past (i.e., insurers must be able to identify whether persons receiving payments are Medicare beneficiaries).
Under the revised implementation timeline released by CMS in May 2009, liability insurers may register between May 1, 2009, and September 30, 2009. The test function became available on July 1, 2009, for Responsible Reporting Entities that have registered. Between January 1, 2010 and March 31, 2010, all liability insurers will go through a testing period for Claim Input files. Insurers then will begin reporting in the second quarter of 2010, with a goal that all insurers are operational on the new reporting system by July 1, 2010.
CMS is holding periodic telephone conferences to discuss both the information technology aspects of reporting and the underlying policy considerations. Recent telephone conferences have suggested that insurers should have a basic familiarity with the reporting requirements and the CMS policy announcements to-date to gain value from participating.