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MEDICARE SECONDARY PAYER ACT. Mandatory Reporting Requirements. Background. Medicare has long established itself as a secondary payer to any other insurance or medical coverage available. New statutory requirement Self-insured public entities must now comply with statute and report payments.
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MEDICARE SECONDARY PAYER ACT Mandatory Reporting Requirements
Background Medicare has long established itself as a secondary payer to any other insurance or medical coverage available. • New statutory requirement • Self-insured public entities must now comply with statute and report payments. • No exceptions for lack of resources or ability to comply
Statutory Authority Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 • Must work with Medicare to evaluate future medical costs before any settlement. • Must report payments made to Medicare-eligible claimants to Medicare. • Payments include settlements, judgments, awards, nuisance value payments, ongoing medical treatment, etc. • Must document protection of Medicare’s interests in all settlements. • ProtectsEntity from additional costs if Medicare determines provision for future medical care is insufficient.
Steps for Compliance Registration Process: • Entity registers an Authorized Representative • Must have legal authority to bind Entity contracts. • Is ultimately responsible • Designates an Account Manager • City Manager has been selected for this role • AccountManager • Performs eligibility queries and submits quarterly reports. • George Hills (TPA) is responsible, Gould & Lamb is the selected Account Manager. • Provides oversight and ensures timely reporting.
Steps for Compliance • Profile Report • Authorized Representative must review, execute and return Profile Report to the EDI Representative. • Includes profile details and assigned quarterly reporting period. • Must be reviewed and confirmed annually. • Notices are emailed from the EDI Representative to the Authorized Representative (City Manager).
Claim Impact • Any claimant receiving medical treatment is potentially included • Medicare beneficiaries AND Medicare-eligible • Eligibility is not always obvious. • Determined by sending “query” to Medicare • No minimum dollar threshold. • All settlements must document consideration of Medicare’s interests. • Compliance is triggered by payment, regardless of fault • May restrict City’s ability to resolve small claims
Monetary Impact • Increased claims cost • Settlement delays could increase litigation activity • Must reimburse Medicare for any payments made (liens) • Funds must be set aside for future medical treatment • May need specialized vendor to negotiate liens and set asides with Medicare • Failing to report can result in a $1,000 per claim/day fine
Administrative Impact • Required to collect sensitive information • Date of Birth and Social Security Number or Medicare Health Insurance Claim Number (HICN) • Must protect personal data to prevent identify theft, ensure privacy and security. • Must ensure City is protected with indemnification language in all third-party contracts. • Monitor and respond to notices from EDI Representative.
New Claim Process Claim is Filed & Accepted Determine Medicare Eligibility Identify Medical Liens Evaluate Future Needs Eligible Medicare Set Aside/ Allocation Not Eligible Ongoing Payments Report at Settlement Negotiate Resolution Report at start of payments Eligible Confirm Eligibility Status Report at Settlement/ Conclusion Continue to make payments but do not report Settle Claim Not Eligible
