Medicare Secondary Payer Statute: Reporting Obligations Delayed, But Uncertainty Remains

Profession:Duane Morris LLP

Article by Sharon L. Caffrey , Kenneth M. Argentieri , Christopher L. Crosswhite and Philip R. Matthews

Recently, the Centers for Medicare and Medicaid Services ("CMS") stated that the obligation to report payments made to Medicare beneficiaries as a result of verdicts or settlements resolving liability claims has been postponed until January 1, 2011.1 Although this delay is likely to provide some relief for the many organizations that have been preparing to comply with the reporting obligations for payments made since January 1, 2010, it also creates uncertainty that may potentially complicate litigation and settlement negotiations for the next year.

Medicare Secondary Payer Reporting Is Delayed For Nine Months

On February 26, 2010, CMS posted on its website a new version of its MMSEA [Medicare, Medicaid, and SCHIP Extension Act of 2007] Section 111 Liability Insurance (Including Self-Insurance), No-Fault Insurance, and Worker's Compensation User Guide for Responsible Reporting Entities ("RREs").2 The User Guide states that RREs will not have to begin making quarterly reports to CMS until the first quarter of 2011. Reports during the first quarter of next year will include information on payments made from October 1, 2010, through December 31, 2010. The new User Guide states that it is now optional for RREs to report payments made prior to October 1, 2010, but it does not provide guidance on when it would be appropriate for RREs to report payments made during the first three quarters of 2010. RREs should be aware that Medicare's right of recovery for any medical care it paid for still remains in effect—only the date by which RREs must begin reporting payments to CMS has changed.

CMS has stated that RREs should be registered and in the process of testing their systems to ensure that their data files are compliant with CMS's complex specifications. All payments made to Medicare beneficiaries after October 1, 2010, must be included in the first data file, which RREs will be required to submit to CMS during a specific week in the first quarter of 2011. RREs that have not yet registered with CMS may want to do so promptly and also begin testing to ensure that their systems are compliant with CMS, since MMSEA Section 111 provides for a $1,000-per-day-per-claim penalty against RREs that do not make a timely report.

Litigation And Settlements: Uncertainty Is Likely To Continue

Until CMS's unexpected announcement that MMSEA Section 111...

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