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last updated on February 18, 2009

MEDICARE SECONDARY PAYER

The Medicare, Medicaid, and SCHIP Extension Act enacted in late 2007 adds new information reporting requirements for purposes of coordination of benefits under Medicare Secondary Payer requirements.

NAMIC OPPOSES an overly broad application of the new reporting requirements for insurers under the Medicare Secondary Payer and has been working with the Centers for Medicare and Medicaid Services to streamline the reporting procedure.

NAMIC SUPPORTS access to the Medicare eligibility database for claimant identification and the ability to use third-party data reporters but OPPOSES holding insurers responsible for false or inaccurate information provided by beneficiaries.

BACKGROUND

The Medicare, Medicaid, and SCHIP Extension Act enacted in late 2007 added new information reporting requirements for purposes of coordination of benefits under Medicare Secondary Payer requirements.

Section 1862(b) of the Social Security Act of 1980, 42 USC Section 1395y(b)(5), established Medicare payments as secondary to other payments for health care. The Tax Equity and Fiscal Responsibility Act of 1982 expanded and clarified Medicare as the secondary payer to additional primary plans (group health plans, workers’ compensation plans, liability insurance, or no-fault insurance). Both underinsured motorists and uninsured motorists are included in the definition of liability insurance for Medicare reimbursement purposes. Personal Injury Protection and medical payments are considered no-fault insurance. The statutes provide a right of subrogation for payments made on behalf of those insureds and grant CMS the right to recover funds from any primary payer even if the third party payer has already reimbursed the beneficiary or provider.

On July 1, 2009, an applicable plan (including self-insurance, automobile, homeowners’ insurance, no-fault insurance, and workers’ compensation) had to determine whether a claimant (including an individual whose claim is unresolved) was entitled to benefits under Medicare and submit information as directed by the federal government with respect to the claimant. The secretary of the Department of Health and Human Services was directed to establish the information to be collected, and the timing and method of reporting. Failure to comply with requirements is punished by civil money penalties of $1,000 per day with respect to any claimant.

Reporting was initially required to begin April 2010, but has since been delayed, most recently in a late February 2010 announcement from CMS, and is now scheduled to commence January 1, 2011. These delays were due, in part to objections raised by NAMIC and others regarding a lack of clarity in the rules for that should be reporting and what should be reported.

In addition to securing a postponement of the reporting deadline, we were successful in working with the CMS to rectify a number of problems created by the reporting requirements as well as securing a postponement for the reporting to begin. Additionally, we were able to ensure that the reporting would be on a quarterly basis instead of a monthly basis and would be permitted at the discretion of the company, either on an individual company or consolidated basis, either directly or through a third-party reporting agent. Agency officials further indicated they would develop a self-certification form that insurers could use to collect information from claimants.

To help answer questions and assist NAMIC member companies with the registration and new reporting requirements, we have created a special Medicare Secondary Payer Resource Center at NAMIC Online.

CONTACT INFORMATION

For more information please contact Marliss McManus, senior federal affairs director, at (202) 628-1558 or mmcmanus@namic.org.

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