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Federal Reporting Requirements Placed on Carriers

Recent legislation plagues liability insurers with federal reporting requirements involving Medicare liens.Just when you thought you had enough audits and regulatory reporting requirements on your hands, the federal government has added yet another.

Although personal injury claimants have long been required to notify Medicare of liens against the proceeds of a settlement, this reporting burden has shifted.  Thanks to legislation that takes effect this summer, liability carriers, worker’s compensation insurers and self-insured companies will soon have to transmit this information directly to a federal agency known as the Centers for Medicare and Medicaid Services ("CMS").

Under the new statute, insurers and claims administrators have to find out whether a claimant is “entitled” to Medicare benefits, presumably by determining the extent to which he or she has already obtained such benefits.  Although defense counsel can probably get the needed information and documentation in discovery, this data may be difficult to get before suit is filed.  Since doctors and other health care providers cannot volunteer this information without the claimant’s consent, the carrier cannot fulfill its reporting burden without the cooperation of the claimant himself.  Without it, insurers and claims administrators may find it impossible to determine the claimant’s eligibility for Medicare benefits or the amount of benefits already received.

If the claimant is entitled to such benefits, claims professionals must provide certain information directly to CMS.

What information specifically?  Authorities haven’t told us just yet, but assure us that they’re working on it.

When must this data be transmitted?  They’re still working on a time line for implementation.  They’ll get to that as well, but it will be a certain number of days “after the claim is resolved through a settlement, judgment, award, or other payment.”

Exactly who has to do the reporting?  Why, it’s the “Required Reporting Entities,” of course.  If you’re a liability insurer, self-insured entity, or worker’s compensation carrier that will be compensating a Medicare-eligible claimant, you are an “RRE”.  (And don’t think you can dish the whole thing off to some third party administrator; if your TPA screws up, it’s the RRE that's SOL.)
 
As of April 13, 2009, the bureaucrats are enjoying a “recommended systems development period.”  That’s fed-speak for figuring out precisely what they want to require from the “Required Reporting Entities.”  In the meantime, a host of vendors will be hounding you with solicitations offering to help you meet requirements that have yet to be determined.

The precise parameters remain sketchy.  But, if it’s Uncle Sam you want to please, here are some tips for smart RREs:

  • Do your best to determine the amount that the claimant would have to reimburse Medicare.  If suit hasn’t been filed, you will need to build these inquiries into your claims evaluation process, obtaining the claimant’s permission to get this information early on.
  • DON’T settle any claim without protecting Medicare’s interest. This may make it more difficult, and sometimes impossible, to settle claims.  But, that’s okay.  Congress wasn’t thinking about it when they passed this legislation.
  • Strictly adhere to all reporting requirements and have Medicare issue its final lien demand.


For the time being, the feds hope to start registering RREs by June 30, 2009.  Actual reporting won’t likely start until October at the earliest, giving the feds an entire summer to test out all the bugs in the new system (... and make sure they’re alive and well before infesting the claims process).

And, even though they haven’t set any concrete deadlines or time tables, Congress has already established the penalty for an RRE who dares to run afoul of them: A fine of $1,000 per claim for each day the RRE has failed to report it.  In fact, if a carrier or self-insured entity doesn’t make sure that Medicare was reimbursed, the feds could come after you for twice the amount of their lien.

So, stay tuned.  Once the bureaucrats figure out precisely what to do, they’ll stick the red tape to their website at http://www.cms.hhs.gov/MandatoryInsRep.  We’ll also do our best to keep you informed on these and other developments.