Medicare Claimants and Section 111 Reporting Requirements
| Publication year | 2009 |
| Pages | 57 |
2009, December, Pg. 57. Medicare Claimants and Section 111 Reporting Requirements
December 2009
Vol. 38, No. 12 [Page 57]
Tort and Insurance Law articles provide information concerning current tort law issues and insurance issues addressed by practitioners representing either plaintiffs or defendants in tort cases. They also address issues of insurance coverage, regulation, and bad faith.
Coordinating Editor
William P. Godsman of the Law Office of William Godsman, Denver-"(303) 455-6900, wgodsman@qwestoffice.net
About the Author
Kendell L. Gracey practices primarily in insurance defense and is an associate at Harris, Karstaedt, Jamison and Powers, P.C.-"(720) 875-9140, kgracey@hkjp.com. The author thanks Art Karstaedt, managing shareholder of Harris Karstaedt, Jamison and Powers, for his assistance with this article.
This article addresses the new federal reporting requirements relating to claims involving Medicare beneficiaries, the duties imposed on the applicable parties, and the effect of Medicare's recovery process on situations that trigger the new reporting obligations. In general, the reporting requirements begin January 1, 2010 for most liability claims settled on or after that date.
Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA)(fn1) amends the notice and reporting requirements under the Medicare Secondary Payer (MSP)statute(fn2) by imposing additional reporting requirements on certain entities for situations involving Medicare beneficiaries. These new reporting requirements are designed to enable Medicare to identify settlements, judgments, awards, and other payments for which Medicare may be entitled to reimbursement. The Section 111 reporting requirements are triggered when personal injury claims involve a Medicare beneficiary.(fn3)
Section 111 affects plaintiff and defense counsel, because both may be personally liable to reimburse Medicare for amounts Medicare paid on behalf of a Medicare beneficiary.(fn4) Additionally, plaintiff and defense counsel will have to guide their clients through the emerging and unsettled provisions of Section 111 and must understand how the reporting requirements affect settlement situations.
Background of Medicare
Medicare was established under the Social Security Act in 1965. MSP was enacted in 1980 due to the escalating costs of the Medicare program and in an effort to reduce spending.(fn5) MSP established that Medicare is a secondary payer in certain situations and requires that other parties protect Medicare's financial interests. It also prohibits Medicare from making payments if a primary payer already made or could reasonably be expected to make payments.(fn6) However, Medicare can and does make payments when a primary payer cannot promptly make payments. These payments are made conditioned on reimbursement.(fn7) Medicare's claims for reimbursement of conditional payments are handled by the Medicare Secondary Payer Recovery Contractor (MSPRC).
The Centers for Medicare and Medicaid Services
The Centers for Medicare and Medicaid Services (CMS) is the federal agency responsible for administering the Medicare program and implementing the new Section 111 reporting requirements.(fn8) This article refers to Medicare and CMS interchangeably.
CMS has provided guidance on its website(fn9) and in a 224-page User Guide(fn10) on how to comply with the new and extensive reporting obligations imposed by Section 111. This article is not an exhaustive review or analysis of the Section 111 reporting requirements. Counsel should review the applicable statutes, the Code of Federal Regulations, the CMS User Guide, and the official CMS website to obtain a complete understanding of the obligations imposed by CMS pursuant to Section 111 reporting requirements.
Terminology and Resources
CMS uses many acronyms and unique terminology in discussing the reporting requirements. An acronym key is provided in the accompanying sidebar entitled "Medicare Acronyms." CMS also has provided a more extensive acronym list in the User Guide.(fn11) An understanding of the acronyms is helpful for navigating the reporting requirements.
Various other resources exist to help counsel and clients understand and comply with Section 111, such as manuals, computer-based training, and CMS-hosted conference calls. An explanation and list of these other helpful resources is provided in the accompanying sidebar entitled "Resources."
Who Medicare Covers
Because Section 111 reporting requirements are triggered when personal injury claims involve a Medicare beneficiary, it is important to understand who Medicare covers. To be eligible for Medicare, an individual must be age 65 or older or, if under the age of 65, have a disability or end-stage renal disease (permanent kidney failure requiring dialysis or a kidney transplant).(fn12) For reporting purposes under Section 111, there is no Medicare beneficiary age threshold.(fn13)
Determining Claimant's Medicare Status
CMS has provided the Query Input File (Query) process as a way of helping the Responsible Reporting Entity (RRE) determine whether a claimant is a Medicare beneficiary.(fn14) The Query process is optional, but it is not a completely reliable source in determining the Medicare status of a claimant. The RRE must have the Social Security number (SSN), the first initial of the first name, the first six characters of the last name, the date of birth, and the gender of the claimant.(fn15)
Once this information is submitted to CMS, a database search determines whether a match can be found with the information provided. To obtain a match, the SSN must exactly match and three of the other four criteria must exactly match.(fn16) If a match is found, CMS will return the claimant's Health Insurance Claim Number (HICN). The HICN is the official identifier used by CMS; after the RRE has received an HICN, the HICN rather than the SSN should always be used in reporting.(fn17) No information regarding partial matches will be provided. Due to privacy concerns, the reason for the claimant's Medicare entitlement and the actual dates of Medicare entitlement and enrollment are not provided to the RRE when a match is confirmed.(fn18) If no match is found, the claimant still could be a Medicare beneficiary, but for various reasons, a match with the CMS database was not found. Thus, the RRE cannot rely completely on the Query results. If the RRE receives a report that no match was found, the RRE still must determine whether the claimant is or was a Medicare beneficiary to know whether it must report to CMS.
Who Must Report-"
The Responsible Reporting Entity
Only certain entities, known as applicable plans, are required to report under Section 111. CMS refers to these applicable plans as RREs. An "applicable plan" is defined as liability insurance (including self-insurance), no-fault insurance, and workers' compensation laws or plans.(fn19)
According to CMS, two categories of RREs exist: the Group Health Plan (GHP) and the Non-Group Health Plan (NGHP).(fn20) This article addresses only the NGHP RRE reporting obligations. Information relating to a GHP's registration and reporting duties can be found at the official CMS website and under the applicable statutory provisions.(fn21)
The RRE cannot contract away or otherwise limit its reporting duties, although it may contract with a Third-Party Administrator (TPA) or other entity to submit its reports to CMS.(fn22) CMS does not endorse or approve of any entity as an agent for Section 111 reporting requirements.(fn23)
Counsel should remember that an individual person who is sued by a Medicare beneficiary for personal injury claims does not have a duty to report. That individual would not be considered a primary payer, an applicable plan, or an RRE under Section 111.(fn24)
Who Must Report-"Subject to Modification
The CMS User Guide provides additional information and definitions relating to what entities are considered RREs,(fn25) but these definitions are being expanded and modified by CMS.(fn26) However, liability insurance (including self-insurance), no-fault insurance, and workers' compensation laws or plans are considered RREs. CMS released an "ALERT" dated July 31, 2009-"an eight-page draft document, subject to public comment-"defining what entities are considered RREs. When this document becomes final, it will replace the existing section in the User Guide that defines what entities must report.(fn27)
The ALERT provides an overview of:
who must report
TPAs
corporate structure and RREs
deductible issues
fronting policies
re-insurance
stop-loss insurance
excess insurance
umbrella insurance
multiple defendants
self-insurance pools
RRE for a state-established assigned claims fund, which provides benefits for individuals injured in an automobile accident who do not qualify for personal injury protection/medical payments protection from an automobile insurance carrier
workers' compensation
liquidation
bankruptcy
multinational organizations
Counsel can subscribe to a listserv on the CMS website to receive notification of when the final document of the ALERT defining RREs will be releasedforeign nations, American Indian, and Alaskan native tribes.(fn28)
Penalties for Noncompliance
The penalties for noncompliance relating to the reporting requirements are substantial. If the RRE fails to comply with the reporting requirements, it will be subject to a $1,000 penalty per day per claim.(fn29)
Basic Safe Harbor Provisions
To understand how and why CMS provided a safe harbor for RREs, a brief review of the situations that give rise to the...
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