Medicare Secondary Payer Act - Settlements
With Medicare Beneficiaries
Medicare UPDATE:
Section 111 Reporting
Responsibilities v. Repayment of Medicare's Conditional Payments
Many employers and their insurance companies have implemented new procedures to comply with Medicare's reporting requirements. They have developed an intake process to identify Medicare beneficiaries making liability insurance, no-fault insurance and worker's compensation claims. Some have completed the registration process and are poised to begin reporting data to the Centers for Medicare and Medicaid Services (CMS).
While we have recently focused on the Section 111 reporting requirements in our alerts, we want to remind companies that the Medicare Secondary Payer Act requires everyone to "protect Medicare's interest" in all settlements with Medicare beneficiaries. This is not a new requirement and is a separate process from the new mandatory reporting requirements. When Medicare makes payments for which another entity is arguably responsible (an employer, for example, or an insurer), these are considered "conditional payments." Medicare can demand any party to a settlement, or plaintiff's attorney, repay the full amount of any conditional payments within 60 days of the settlement. Therefore, it is important to identify conditional payments in settlement agreements and to resolve Medicare's interest before any settlement payments are made.
For worker's compensation claims, it may also be necessary to obtain a Medicare Set-aside Agreement (MSA) to protect Medicare's interest in future medical benefits; however, there is currently no requirement for a MSA in liability settlements.
In addition to reporting when there is ongoing responsibility for medical care, known as ORM, after January 1, 2010, responsible reporting entities, also known as RREs, must begin to report the amount of settlements with Medicare beneficiaries. The initial threshold for reporting these settlements is $5,000 -- now settlements under $5,000 do not need to be reported. The threshold levels will decrease in subsequent years. Reporting this information will give CMS greater surveillance of settlements with Medicare beneficiaries than ever before.
If you have any additional questions about settling liability insurance, no-fault insurance, or worker's compensation claims with Medicare beneficiaries, please contact Ann Stewart.