While the newest legislation impacting Medicare was targeted at the insurance industry rather than the plaintiff’s community, each group has been greatly affected. The ramifications of these new laws are finally being seen.
The Medicare, Medicaid, and SCHIP Extension Act of 20071 (MMSEA) is going to cause major waves in the PI legal community. Even insurers have been handed a daunting task of reporting all cases to Medicare’s MSPRC. Fortunately, it looks like the time for reporting compliance has been pushed back once again.
The MMSEA was supposed to take effect for insurers on January 1, 2010 was first delayed until April 1, 2010. Now, it has once again been pushed back to January 1, 2011.2 More important to you is that cases settled before October 1, 2010 need not be reported (but be careful – reporting of current settlements is permissive, just not required).
Is the delay because the Centers for Medicare and Medicaid Services (CMS) isn’t ready to enforce these provisions? Or is it because the ever-powerful insurance industry is pressuring CMS to delay because they are not ready to comply? Whatever the reason, insurers (as Responsible Reporting Entities, or, RREs) have eight more months to prepare for the “new” legislation. But why are they so nervous?
The MMSEA additions impose a $1,000 per day, per beneficiary penalty for each day that an insurer is out of compliance with the reporting requirements. It is a pretty hefty amount for insurers and certainly something they will want to avoid. The RREs will be required to complete a two-step process:
1) Determine whether a plaintiff is entitled to Medicare benefits
2) If the plaintiff is entitled, the RRE must electronically submit data about the plaintiff, the injury, and other more specific information concerning the settlement to the Secretary of Health and Human Services through the Coordination of benefits Secure Website (“COBSW”).
The required process is lengthy and tedious, but ignorance could lead to the $1,000 per day penalty.
This new reporting makes it easier for Medicare’s contractors to discover RREs who are subject to the “Double Damages Plus Interest” penalty levied against defendant-insurers (essentially the RRE’s parent company) if Medicare’s reimbursement claim is unpaid in any settlement.
The bottom line is insurers now have additional time to ready their systems for compliance. They should take advantage of this time – these penalties add some real teeth to the Medicare reimbursement system.
Next week my colleague, Ryan Weiner, will post analysis of the fallout from this double damages rule next week – and how it affects the plaintiff and settlement.Marcy Spitz Co-Founder Lien Resolution Services www.lienresolutionusa.com MSpitz@lienresolutionusa.com
1Section 111 of the MMSEA is codified at 42 U.S.C. §1395y(b)(8)
2 User Guide 3.0 available at http://www.cms.hhs.gov/MandatoryInsRep/09_Alerts.asp#TopOfPage