Medicare & Medicaid Mandatory Reporting Requirements – Are you a Responsible Reporting Entity?

by: Jonathan Corr and Heath Langle

Starting today anyone who could potentially make a third party payment to a Medicare-eligible beneficiary in a liability setting is now mandated to supply detailed information regarding that claim to the Centers for Medicare and Medicaid Services (CMS). These new requirements are simply a way for CMS to stop their financial bleeding after years of non-repayment of conditional benefits payments and to ensure their interests are taken into account in future settlements which involve payment to a Medicare beneficiary. CMS has created a mechanism to track payments made to Medicare-eligible beneficiaries and has also created penalties severe enough to ensure compliance in reporting those payments.

The enactment of section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) creates new reporting requirements for all Responsible Reporting Entities (RRE). The act’s definition for RRE’s identifies qualifying plans, including liability insurers, self-insurers, no-fault insurers and workers’ compensation insurers to report detailed information to CMS regarding Medicare beneficiaries. The new reporting requirements can be found at 42 U.S.C. 1395y(b)(8). Failure to comply with the mandatory reporting requirement will result in a $1,000.00 per day per-claimant penalty.

CMS now requires a RRE to provide electronic submissions regarding all claimants who are Medicare eligible. The reports are to be generated quarterly during a designated seven-day period assigned to a RRE by CMS, and will include all pending claims, whether or not they have been reduced to final judgement or settlement, if the claim involves a Medicare beneficiary.

The initial file submissions must report all claims, in which the injured party is/was a Medicare beneficiary, that are resolved or partially resolved by settlement, judgment, award or other payment on or after July 1, 2009. Property-damage-only claims and one-time payments for a defense medical evaluation do not mandate a reporting duty. There is also no reporting requirement in situations where there has been a defense verdict or judgment indicating no money is owed for the injury in question.

CMS is requiring all Responsible Reporting Entities to register with CMS beginning May 1, 2009 through June 30, 2009 in order to obtain an ID for quarterly reporting purposes. A RRE is deemed by CMS as the entity making payments to a claimant or beneficiary which includes liability insurers, self-insurers, no-fault insurers and workers’ compensation insurers.

There will be a six-month testing period for submissions to CMS through their Coordination of Benefits Secure Website (COBSW) from July 1, 2009 to December 30, 2009. CMS wants ample time to ensure RREs are able to properly and timely report. Live production files will be required in the first quarter of 2010 from January 1, 2010 to May 31, 2010. In order to facilitate smooth registration and reporting processes, CMS has set up a series of Computer Based Training sessions (CBT) available through the CMS website. The CBTs are extremely user-friendly and will guide each RRE through the process of registration and submission of data files. To register for the free CBT sessions contact the Coordination of Benefits Contractor EDI Department at (646) 458-6740, or contact this office and we would be happy to set up a time for you or your staff to come to our office to participate in the CBT sessions.

Keep in mind the existing Medicare law regarding conditional payments has not changed. Pursuant to 42 U.S.C. 1395y and 42 C.F.R. section 411.20, Medicare does not have to assert a lien to recover conditional payments made on behalf of a Medicare beneficiary. Additionally, all parties, whether an insurer, self-insurer or third party administrator who are, or should be, aware Medicare made a conditional payment have a duty to notify Medicare of a settlement. To give teeth to Medicare’s recovery rights, the statute and regulations give Medicare the ability to seek payment from practically anyone who knew or should have known about its payments but failed to protect Medicare recovery rights. The law gives Medicare a great deal of flexibility in deciding which party or parties should be responsible for repayment. In the event that Medicare’s interest is not repaid, anyone who could have protected Medicare’s interest may be liable for repayment. This could also mean payment of double damages if Medicare has to initiate legal action. The new reporting requirements are designed to make it easier for CMS to identify potential recovery resources and, where necessary, initiate recovery actions under existing law.

The new mandatory requirements have also generated a great deal of discussion regarding Medicare Set-Asides (MSA) in liability cases. The MSA is a mechanism by which a party or parties can protect themselves from Medicare’s broad powers of recovery by taking into consideration Medicare’s recovery interests. While some have opined these set-asides are mandatory, there is nothing in the statute that makes MSA’s an absolute requirement. However, it may be the best and only way to demonstrate CMS’s interest in a settlement was protected and thereby avoiding a recovery action being initiated. Because the MSA issue is separate from the new mandatory reporting requirements, additional information will follow in a separate alert.