CPSC Newsletter - July 2008

On August 1, 2008, the Centers for Medicare and Medicaid Services (“CMS”) released a statement clarifying the Mandatory Insurer Reporting (“MIR”) requirements of Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 ("MMSEA"). [1] Section 111 of the MMSEA amended the Medicare Secondary Payer Statute (“MSP”) to mandate data reporting by Group Health Plans (“GHP”) and so-called Non-Group Health Plans (“non-GHP”), which include liability insurance (including self-insurance), no-fault insurance, and workers’ compensation. The MIR requirements of Section 111 carry significant penalties for non-compliance, and this Statement is the industry’s first insight into the degree and burden of reporting that CMS will require.

Section 111, signed into law on December 29, 2007, will be effective on July 1, 2009 for all non-GHP situations involving Medicare beneficiaries. This amendment attaches significant penalties for failure to comply with reporting requirements previously included under the MSP. [2] Specifically, the consequence for failure to comply with this amendment in a timely manner is a civil penalty of $1,000.00 per day, per claim.

The Statement sketches the method, substance, and burden that compliance with the MIR will entail. Initially, applicable reporting entities will need to register on-line through a secure website, still under development, before CMS can assist the entity in setting up the data reporting and response process. Non-GHPs will be required to report relevant information on an ongoing basis for non-contested claims and on a one-time basis for all contested cases in which a settlement, judgment, award or other payment occurs. CMS states the MIR will be a “100% electronic” process to reduce paper and facilitate compliance. CMS has established a separate website dedicated to implementation of the MMSEA, which can be found at www.cms.hhs.gov/MandatoryInsRep/. [3]

Perhaps the most interesting aspect of this Statement is that it enumerates the information that will be required to satisfy the MIR – and what that says about Medicare’s interpretation of the MIR. This information is separated into three categories: mandatory, situational, and optional.

Identification of the injured worker; specifically, name, address, date of birth and social security number or Medicare number;
Information identifying the primary plan; including the type of insurance (e.g. workers’ compensation, liability, or no-fault), the name of the plan, and the policy, claim and tax identification numbers;
Identity of the insured party and policy holder;
Information concerning the date and nature of the injury, as well as the state of venue; and
The nature of the claim’s resolution (interestingly, under claim resolution type, the MIR requires insurers to report claims that are resolved by way of judgment – even if there is no ongoing responsibility for the non-GHP).

Identity of the beneficiary if different from the injured party;
Indentifying information for the attorney for the injured party/plaintiff, including the attorney or the firm’s tax identification number;
Further information about the nature and cause of the injury, including ICD-9 codes; and
Settlement information, including date and method of funding.

Email and/or telephone numbers of the claimant or injured party (if different from claimant);
Email and/or telephone number for claimant’s representative; and
“Additional information” about the Primary Payer.

In addition to laying out the proposed method and substance that compliance with the MIR will require, the Statement further attempts to anticipate the burden compliance will have on applicable entities or their agents. While CMS notes that much of the data required by the MIR are already maintained for coordination of benefit and internal business purposes, and that most non-GHPs already routinely report similar information to CMS, CMS anticipates that the average burden of compliance with the MIR will nevertheless include the establishment of a routine reporting process, the collection of the requisite information, and the time involved to complete a report on each claim or member. For the entire non-GHP industry, CMS anticipates that the initial cost of compliance will exceed $12 million; nearly $3 million of which will be devoted to collection of information for the some “2.9 million ‘non-GHP’ claims made annually by Medicare beneficiaries that may or may not be settled.” Once implemented, CMS estimates annual costs to the Federal government of $8 million for the maintenance and support of the MIR program.

Although the Statement sheds some light on the impact of the new legislation to insurers in non-GHP situations, significant questions remain. We are still waiting for information elaborating the electronic reporting method and the rules regarding appropriate agents for reporting purposes. Moreover, we have yet to learn when and how civil penalties may be assessed for delayed or complete non-compliance. Until we have the answers to these questions, the scope of the burden created by this new legislation cannot be completely known. As more information becomes available, CPSC will keep you informed. In the meantime, CMS is inviting public comment on this proposed implementation, so now is the time to speak up about these very important new requirements. [4]

[3] As of the time of publication of this report, CMS’ Web site was still under construction.

[4] Comments on the Supporting Statement for the MSP MIR Requirements of Section 111 of the MMSEA can be made at http://www.cms.hhs.gov/MandatoryInsRep/

Click here to view the August 1st CMS Memo

On June 12, 2008, the Medicare Action Recovery Coalition (MARC) met in Washington, DC to discuss the need for reform of the Medicare Secondary Payer (MSP) statute with respect to Liability claims. Rob Lewis from Crowe Paradis attended this meeting along with representatives from various trade groups, carriers, tpa’s, and self-insureds.

Consensus was achieved at the meeting on three areas where reform is essential to the reimbursement process and efficiency of the new reporting requirement for liability claims pursuant to the MMSEA. The meeting focused on 1) increasing transparency of the process, 2) granting MSPRC more authority to resolve disputed debts, and 3) providing appeal rights.

MARC is seeking assistance in this legislative reform project and inquiries should be sent to Roy Franco at roy.franco@safeway.com.

Visit us at our booth to learn more about the Crowe Paradis difference and to have your questions answered. We will be presenting and or attending the following conferences during the remainder of 2008.