The Centers for Medicare & Medicaid Services (CMS) has recently updated the information on its website with respect to the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA), Section 111 “Mandatory Insurer Reporting” requirements. The recent updates cover (1) a revised implementation timeline for certain liability insurance (including self-insurance) total payment obligation to claimant settlements, (2) revised guidance on claims involving exposure, ingestion, and implantation issues, (3) upcoming improvements to the Medicare Secondary Payer (MSP) program, (4) a new exception for certain settlements paid into a qualified settlement fund and (5) a new way for certain injured Medicare beneficiaries to satisfy their past and future MSP obligations.
Revised Implementation Dates
First, CMS has delayed Section 111 reporting for certain liability insurance (including self-insurance) total payment obligation to claimant (TPOC) settlements, judgments, awards, or other payments. The revised implementation date for reporting will be based on the TPOC amount.
Exposure, Ingestion, and Implantation – Revised Guidance
Second, CMS has posted revised guidance pertaining to liability insurance (including self-insurance) responsible reporting entities (RREs) where the claims involve exposure, ingestion, and implantation issues. In the guidance, CMS explains its policies for claims involving exposure, ingestion, and implantation. Specifically, CMS discusses when Medicare will, and will not, assert a recovery claim against the settlement, judgment, award, or other payment, and when the MMSEA, Section 111 mandatory reporting rules must (or need not) be followed. CMS also provides examples of various factual scenarios involving exposure, ingestion, and implantation, and discusses how its policies will be applied to each.
Upcoming MSP Improvements
Third, according to CMS, certain improvements to the MSP program can be expected within the next three to nine months, including:
- The implementation of a Medicare Secondary Payer Recovery Contractor (MSPRC) web portal, where the beneficiary or representative can obtain information about Medicare’s claim payments, demand letters, etc., and input information related to a settlement, disputed claims, etc.
- The implementation of an option that allows for an immediate payment to Medicare for future medical costs that are claimed/released/effectively released in a settlement.
- The implementation of a process that discloses Medicare’s conditional payment amount, prior to settlement in certain situations.
If implemented, these new options and processes could significantly improve the efficiency of the existing MSP system and provide greater certainty to all parties where settlements involve Medicare beneficiaries. More information can be found on CMS’s website.
Narrow Exception for Qualified Settlement Funds Prior to October 1, 2011
Fourth, in an “Alert” dated September 20, 2011, a narrow exception has been announced for certain settlements that are paid into a qualified settlement fund (QSF) under Section 468B of the Internal Revenue Code (IRC) prior to October 1, 2011. Specifically, each of the following criteria must be met in order for exception to apply:
- The settlement, judgment, award, or other payment is a liability insurance (including self-insurance) TPOC amount, where no ongoing responsibility for medicals (ORM) is involved
- The settlement, judgment, award, or other payment will be issued by a QSF under Section 468B of the IRC, in connection with a state or federal bankruptcy proceeding
- The funds at issue were paid into the trust prior to October 1, 2011
New “Fixed Percentage Option”
Finally, for certain settlements that are less than $5,000, there is a new “fixed percentage option” for beneficiaries to satisfy Medicare’s total MSP claim. Details are provided on the MSPRC website and are reprinted below. Although this option is currently only available under narrow circumstances, it represents a significant departure from CMS’s historical and complicated approach to the MSP recovery process.
Effective November 7, 2011, the Centers for Medicare & Medicaid Services has implemented a new and simple fixed percentage option that is available to certain beneficiaries. This option is available to beneficiaries who receive certain types of liability insurance (including self-insurance) settlements of $5,000 or less.
A beneficiary who elects this option will be able to resolve Medicare’s recovery claim by paying Medicare 25 percent of his/her total liability insurance settlement instead of using the traditional recovery process. This means that a beneficiary will know what he/she owes and will be able to immediately pay Medicare.
In order to elect this option, the following criteria must be met:
- The liability insurance (including self-insurance) settlement is for a physical trauma based injury. (This means that it does not relate to ingestion, exposure, or medical implant)
- The total liability settlement, judgment, award, or other payment is $5,000 or less
- The beneficiary elects the option within the required timeframe and Medicare has not issued a demand letter or other request for reimbursement related to the incident
- The beneficiary has not received and does not expect to receive any other settlements, judgments, awards, or other payments related to the incident