For the past six months, the government has been struggling to come up with new, stronger reporting procedures and deadlines designed to prevent Medicare from double-paying Medicare recipients who are already scheduled to receive payouts for their injuries or illnesses under workers’ comp, liability or no-fault insurance plans. It appears the procedures and deadlines are now in place.
History: Medicare Set-Aside accounts (MSAs) were created to conform to the requirements of the Secondary Payer Act (42 C.F.R. Section 411.46). The act was passed to protect the assets in the Medicare Trust Fund. The trust fund covers medical expenses for eligible applicants. The Secondary Payer Act requires that at the time a claimant settles a physical injury claim against an insurer, projections must be made of the Medicare covered medical needs of the claimant for his or her injuries. These projected settlement dollars are set aside in a MSA account to cover estimated Medicare covered medical costs. Money to pay for Medicare covered medical expenses is paid from the MSA account first. Only after these funds are depleted can the injured party challenging for and receive Medicare funds.
Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 added tougher mandatory reporting requirements for group health plans, liability insurance including self-insurance, no fault insurance and workers’ compensation (known as Responsible Reporting Entities, RREs). Compliance begins this year with an updated compliance timeline announced last month in a Centers for Medicare & Medicaid Services (CMS) memo.
Mandatory Testing and Submission Dates
According to the May 11 CMS memo, RREs are required to register with the CMS by September 30, 2009. Claim reporting and processing data testing to the CMS’ Coordination of Benefits Contractor (COBC) will occur between January 1 and March 31, 2010. Once a test of the reporting system is completed and approved, the system receives production status. Actual live claim submissions must begin in April through June of 2010 and then quarterly thereafter.
Section 111 reporting will not include Total Payment Obligation to the Claimant (TPOC) amounts with dates prior to January 1, 2010.
Eligible cases that are not appropriately submitted to the CMS with the required information will be charged $1,000 per day, per claim non-compliance penalty. This penalty will surely make interested parties sit up and take notice.
For a copy of the CMS memo, go to http://www.medivest.com/images/CMS_Memos/MIR_Memos/20090511Memo.pdf
We will be constantly monitoring future CMS MSA directives.