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MMSEA – RRE Reporting Begins Oct. 1, 2010

President George W. Bush signed the Medicare Medicaid & SCHIP Extension Act (“MMSEA”) more than three years ago.  On October 1st, 2010, its reporting section finally goes into effect.  How will reporting change the Healthcare Lien landscape?  How will it change Personal Injury Law?

The Defense Fears

The MMSEA turns defendant-insurers into Responsible Reporting Entities (“RREs”) who must report every settlement to Medicare’s agencies.   In the most basic sense, this is a two-step process.

First, an RRE must perform a Medicare “Query” of the plaintiff/beneficiary.  The RRE needs only the following five pieces of information:

  1. First letter of the beneficiary’s first name;
  2. First six letters of the beneficiary’s last name;
  3. The beneficiary’s gender;
  4. The beneficiary’s date of birth; and,
  5. Either the Health Insurance Claim Number (HIC# or HICN) OR the Social Security Number (SSN).

If the query comes back negative, the reporting obligation is fulfilled, and settlement should progress with fewer concerns.  However, if the query comes back positive, the Medicare lien will hang over all parties’ until resolved.  Following settlement, and with no relation to the plaintiff’s resolution of a lien, the RRE must report the settlement to Medicare.  RREs will report at least 50 data points to Medicare.  They might have to report more than 100 data points in some situations.  For more on the data points, please visit our previous blog entry: MMSEA Reporting – What Data Points Will RREs Report.

Please click here for a complete list of data points, or go to http://lienresolutionusa.com/resources-and-links/.

Defendant-insurers should not be afraid of reporting obligations.  If you are in need of reporting assistance, please contact Lien Resolution Services.  However, there are certain concerns of which defendant-insurers must be aware.  The MMSEA reporting requirements impose a $1,000 per day, per beneficiary penalty for each day that an insurer is out of compliance with the reporting requirements.  These penalties could be massive for an insurer with just a few cases out of compliance.  For instance, if Insurer A has failed to report settlement for 10 days on just 100 files, it will owe Medicare $1,000,000.00.

With these concerns in mind, insurers have begun to require full resolution of a Medicare lien prior to settlement.  To avoid settlement delays, we suggest a multiple check system for settlement.  On March 22, 2010, Lien Resolution Services first suggested this to the public-at-large in our post: “Section 111 of the MMSEA & Medicare Liens: A Harbinger of Settlement Delays?‘  In pertinent part, we suggested the following to plaintiffs:

If the defense is weary of letting the plaintiff’s attorney pay, you can ask for two checks.  One for the Final Lien Demand amount and the other for the remaining settlement proceeds.  Because the plaintiff is the first to be charged interest under current Medicare practices, the plaintiff’s attorney should mail the check for the Final Lien Demand (which will satisfy the lien).  This two check system should show that plaintiff and defendant alike have acted with due diligence to pay the Medicare lien.

Obviously, the fines of $1,000 per day, per file can add up quickly.   Additionally, Medicare laws allow the MSPRC, CMS, and COBC to go after defendant-insurers for delinquent liens.  Even further, they can charge double damages for these delinquent liens.  So where an insurer (as the RRE) fails to report a lien, and where the lien remains unpaid, these fines and damages will add up very fast.  These fines can end up being five to seven digits long.  These are the defendant-insurer-RRE fears.

The Plaintiff’s Problem

Plaintiffs (and their attorneys) obligations have not changed.  Plaintiffs still must report liens to Medicare’s COBC and MSPRC.  They must still pay the Medicare liens compiled by the MSPRC.  This blog has been plaintiff-centric since its inception, and as a result, the following links can provide a plethora of information:

  1. The Idiot’s Guide to Medicare Lien Resolution
  2. Negotiating With Medicare
  3. What if Medicare’s Lien Exceeds Client Recovery
  4. Medicare Lien Appeals – The Five Levels

Plaintiffs and their attorneys are also subject to 11.125% interest and double-damages for unpaid liens.

Plaintiff’s attorneys biggest concerns should be related to settlement.  The defense fears have begun to delay settlements.  Defendants refuse to release settlement checks until the Medicare lien has been resolved.  The best solution is to prepare, prepare, prepare.  Begin the lien resolution process early.  Get lien resolution assistance to speed up the process.  LRS assistance can help to reduce liens and allow you to settle more easily.  Finally, use the multiple check system noted above.  In case you missed it:

If the defense is weary of letting the plaintiff’s attorney pay, you can ask for two checks.  One for the Final Lien Demand amount and the other for the remaining settlement proceeds.  Because the plaintiff is the first to be charged interest under current Medicare practices, the plaintiff’s attorney should mail the check for the Final Lien Demand (which will satisfy the lien).  This two check system should show that plaintiff and defendant alike have acted with due diligence to pay the Medicare lien.

Contact us for assistance with all of your healthcare lien resolutionLRS is able to handle Medicare liens, Medicaid liens, ERISA liens, and private insurer liens.  We also prepare Medicare Set-Asides (MSAs).  Please see our website for additional information on MMSEA Compliance.

Ryan J. Weiner
Co-Founder Lien Resolution Services
www.lienresolutionusa.com
https://lienblog.wordpress.com
rweiner@lienresolutionusa.com
This Blog/Web Site is made available by the publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
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About Ryan J. Weiner

Co-Founder of Lien Resolution Services, LLC, a national healthcare lien resolution firm. Our goal is to assist in the fair administration and resolution of healthcare liens on personal injury cases. Please visit our website for more information: www.lienresolutionusa.com.

One comment on “MMSEA – RRE Reporting Begins Oct. 1, 2010

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