Many defense attorneys have asked how their personal injury cases might be affected by last week's CMS announcement that Medicare is postponing some aspects of the Mandatory Insurer Reporting requirements under § 111 of the MMSEA. The reporting extension announced by CMS is a big deal to settling insurance companies and self-insureds who have the burdensome reporting obligations under § 111 of the MMSEA. Lawyers who defend personal injury claims are less affected by the § 111 implementation delay, because although they are called upon to help identify Medicare beneficiaries and gather some of the data which CMS requires insurers/self-insured to report, the defense lawyers themselves do not do the reporting under § 111 of the MMSEA.
That said there has been a good deal of misinformation and generalizing about the § 111 reporting extensions. Here are a few of the most troublesome bits of misinformation we've heard recently:
1. Some have suggested (incorrectly) that the reporting extensions mean parties do not have to notify Medicare of settlements which occur, and we've heard some suggest that Medicare will suspend its collection efforts until the § 111 reporting is in full swing. The § 111 reporting deferral does not affect or change the need for all parties to ensure Medicare's interests are being protected and Medicare is reimbursed from the settlement proceeds in accordance with the MSP statutes and regulations.
2. Some believe (incorrectly) that the recent CMS announcement had the effect of postponing ALL of the mandatory insurer reporting required under § 111 of the MMSEA. Not so. The recent extensions apply to only one aspect of the § 111 reporting: reporting of TPOC settlements. TPOC is Medicare-speak for "Total Payment Obligation to Claimant" and most liability settlements are considered TPOCs. Under the extended § 111 deadlines, TPOC settlements which occur on or after October 1, 2011 will be "reportable" and must be reported no later than the first quarter of 2012. Before the recent extension all TPOCS after October 1, 2010 were reportable, and had to be reported no later than the first quarter of 2011. But while the reporting timeline for TPOCS has been extended, the reporting timeline for ORMs HAS NOT BEEN EXTENDED. ORM is Medicare-speak for "Ongoing Responsibility for Medicals" and most med pay, no-fault and PIP claims are ORMs. As such, the recent reporting extension does NOT change existing § 111 reporting requirements for workers' compensation or liability cases that include ORM—all ORMs since January 1, 2010 have been "reportable" and STILL must be reported by insurers/self-insureds during the first quarter of 2011.
3. Many insurers have already completed the required testing period and have gone "live" with their § 111 reporting obligations. As such, some insurers/self-insureds with which you work may continue to report all TPOCs and ORMs under the § 111 of the MMSEA even though the implementation deadline for TPOCs has been postponed. The recent CMS Alert states that if the reporting entity wishes to report TPOC settlements prior to the first quarter of 2012 they are allowed to do so.
4. Extension of Current Dollar Thresholds: The CMS Alert also extended, by one year, the interim reporting thresholds set out in Section 11.4 of Version 3.1 of the User Guide. These low-dollar § 111 reporting thresholds are designed to eliminate the burden of § 111 reporting for smaller settlements while everyone is learning the new system. The thresholds are temporary and staged to expire altogether after 2014. The new timeline on the temporary thresholds is:
• Settlements prior to January 1, 2013: those $5,000 or less need not be reported
• Settlements during 2013: those $2,000 or less need not be reported
• Settlements during 2014: those $600 or less need not be reported
Remember that the duty to report under § 111 is separate and distinct from the duty to reimburse the MSPRC under the MSP statutes and regulations. As such, even if a settlement is small enough that it need not be reported under § 111, the obligation STILL EXISTS to fully reimburse Medicare from the settlement proceeds. While there is a low-dollar threshold for § 111 reporting, there is NO low-dollar threshold for reimbursing Medicare.
So, bottom line is the § 111 reporting delays provide an additional twelve months for CMS and the insures/self-insureds to gear up for the mandatory reporting of TPOC settlements. This § 111 implementation delay does not, however, change the present need for all parties in personal injury cases involving Medicare beneficiaries to ensure that Medicare's interests are being protected (and Medicare's past conditional payments are being reimbursed from all settlements). The penalties under the MSP statutes for failing to reimburse Medicare are steep for settling insurers, and this aspect of Medicare compliance is completely unaffected by the § 111 reporting postponement.