Medicare Secondary Payer Mandatory Reporting

Provisions in Section 111 of the MMSEA

CMS UPDATE: August 6, 2009

Proposed Revisions of NGHP User Guide Section 7.1

CMS has issued some clarification to address the many questions it has received regarding how to determine the RRE and, thus, "Who Must Report" in Section 7.1 of the Non-Group Health Plan (NGHP) User Guide. It published some proposed language for section 7.1 that, when final, will replace the existing Section 7.1. CMS has asked for public comment by August 16, 2009.

So, what's new in Proposed Section 7.1?

CMS made some cosmetic changes and added examples to clarify the existing provisions. For instance, it included an example related to Third-Party Administrators (TPA) to emphasize that the liability insurer may not shift its RRE responsibility to the TPA. CMS also included examples in the Self-Insurance and Assigned-Claims Fund sections to clarify its position on identification of the RREs.

· Corporate Structure And RREs

CMS has added new language related to identifying the RRE in various corporate structures. In general, an entity may register for another entity if it is below it in the direct line of corporate structure. For instance, a parent entity may register as an RRE for any subsidiary in its corporate structure, regardless of whether or not the parent would otherwise qualify as an RRE. An entity may not register for a sibling in its corporate structure or for its parent corporation, but may register for a subsidiary. A captive is considered a subsidiary of its parent entity and a sibling of any other subsidiary of its parent.

If you have a complex situation that doesn't seem to fit with these guidelines, give us a call to discuss your situation.

· Deductible Issues

CMs has received many questions related to identifying the RRE in situations involving different deductible arrangements. CMS seeks to clarify that deductible amounts are self-insurance for MMSEA purposes.

· Miscellaneous New Provisions

CMS has included new provisions related to Fronting Policies in which the expectation of both the insured and the insurer is that the insured will pay all claims. Where the insured does pay the claim, the insured is the RRE.

In addition, CMS has included new provisions to assist in identifying the RREs in Liquidation and Bankruptcy situations, as well as claims involving Multi-National Organizations, Foreign Nations, American Indian, Alaskan Native Tribes. If you have questions about any of these situations, please give us a call.

If you would like any further information about these proposed changes or if you would like to submit comments you can contact Ann Stewart of Ice Miller LLP.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.