Medicare Secondary Payor Compliance Update:
New Penalties and Reporting Requirements for Insurers

On December 29, 2007 the Medicare, Medicaid, and SCHIP Extension Act of 2007 was signed into law. In pertinent part, this law amends the Medicare Secondary Payor Act by mandating new reporting requirements for all liability, self-insured, no fault and workers compensation insurers, and implements substantial monetary penalties for non-compliance.

Namely, insurers are now required to determine whether a claimant is entitled to Medicare benefits, and if so, to identify and report the claimant to Medicare after the claim has resolved through settlement, judgment, award or other payment. Failure to do so, will subject the insurer to civil penalties of $1,000 per each day of non-compliance per claimant.

The new requirements also foretell a renewed emphasis on the recovery of conditional payments by CMS.   It is essential that insurers address past conditional payments of Medicare liens to ensure complete MSP compliance in order to avoid potential litigation or penalties.

See the full text of pertinent provisions below: S.2499 - Medicare, Medicaid, and SCHIP Extension Act of 2007, Sec. 111(a)(8)(A-E):

SEC. 111. MEDICARE SECONDARY PAYOR

(a) In General- Section 1862(b) of the Social Security Act (42 U.S.C. 1395y(b)) is amended by adding at the end the following new paragraphs:...

• (8) REQUIRED SUBMISSION OF INFORMATION BY OR ON BEHALF OF LIABILITY INSURANCE (INCLUDING SELF-INSURANCE), NO FAULT INSURANCE, AND WORKERS' COMPENSATION LAWS AND PLANS-
• (A) REQUIREMENT- On and after the first day of the first calendar quarter beginning after the date that is 18 months after the date of the enactment of this paragraph, an applicable plan shall--
• (i) determine whether a claimant (including an individual whose claim is unresolved) is entitled to benefits under the program under this title on any basis; and
• (ii) if the claimant is determined to be so entitled, submit the information described in subparagraph (B) with respect to the claimant to the Secretary in a form and manner (including frequency) specified by the Secretary.
• (B) REQUIRED INFORMATION- The information described in this subparagraph is--
• (i) the identity of the claimant for which the determination under subparagraph (A) was made; and
• (ii) such other information as the Secretary shall specify in order to enable the Secretary to make an appropriate determination concerning coordination of benefits, including any applicable recovery claim.
• (C) TIMING- Information shall be submitted under subparagraph (A)(ii) within a time specified by the Secretary after the claim is resolved through a settlement, judgment, award, or other payment (regardless of whether or not there is a determination or admission of liability).
• (D) CLAIMANT- For purposes of subparagraph (A), the term `claimant' includes--
• (i) an individual filing a claim directly against the applicable plan; and
• (ii) an individual filing a claim against an individual or entity insured or covered by the applicable plan.
• (E) ENFORCEMENT-
• (i) IN GENERAL- An applicable plan that fails to comply with the requirements under subparagraph (A) with respect to any claimant shall be subject to a civil money penalty of $1,000 for each day of noncompliance with respect to each claimant.