With the ongoing debate over national health care, employers may have overlooked a new law that requires group health plan insurers and self-insurers, workers’ compensation and no-fault insurers, and third-party administrators and plan administrators to report information to the secretary of Health and Human Services regarding injured employees or other claimants.
The Medicare Secondary Payor Act (MSP) of 1980 requires primary payer programs to pay for medical benefits ahead of Medicare, but it hasn’t worked as designed.
“The Medicare program has continued making payments that should have been made by primary payers and the MSP’s success rate in recovering these ‘double payments’ has been less than stellar,” says Mark E. Morley, a senior partner at Secrest Wardle and co-chair of the firm’s Executive Committee.
Smart Business spoke with Morley about the new Mandatory Insurer Reporting Law, also referred to as the Medicare, Medicaid & SCHIP (State Children’s Health Insurance Program) Extension Act of 2007 (MMSEA), designed to end the miscues of the past while imposing a $1,000 per day penalty on those who ignore its requirements.
How can employers avoid the penalty?
Compliance. The days of waiting for a call from Medicare seeking reimbursement appear to be over. The Centers for Medicare and Medicaid Services (CMS) issued an alert advising that employer-sponsored medical plans, no-fault and workers’ compensation insurers, liability insurers and self-insured plans must proactively collect information, such as Social Security numbers, health care insurance claim numbers and Employer Identification Numbers and report to Medicare. This lets Medicare coordinate its payments with other insurance to avoid unnecessary depletion of the Medicare Hospital Trust Insurance Fund.
Are past and future medical expense payments affected?
Yes, the statute requires reimbursement to Medicare when it has made payments for medical expenses that are covered by another insurer. For example, in a workers’ comp case where Medicare payments were made, the CMS is authorized to initiate recovery for payments as soon as it learns that payment ‘has been or could be made.’
The same applies to a no-fault insurer, according to the Code of Federal Regulations. The recipient of benefits is required to reimburse Medicare within 60 days of receiving payment. And the CMS can seek reimbursement directly from the involved insurer or employer-sponsored plan, even though it has already reimbursed the beneficiary.