CMS Announces One Year Delay Of Requirement To Report Liability Payments Under The Medicare Secondary Payer Statute

Late last week, the Centers for Medicare and Medicaid Services ("CMS"), the agency within the Department of Health and Human and Services that oversees the Medicare program, announced that it will delay, from January 1, 2011 to January 1, 2012, the start date for electronic filing of settlements, judgments, awards, or other payments made to Medicare beneficiaries, whether such payments are made by liability insurers, no-fault insurers, workers' compensation, or businesses that self insure their liability risks. In its announcement, CMS provided no explanation for the one-year extension.

This reporting requirement was added to the Medicare Secondary Payer ("MSP") statute, 42 U.S.C. 1395y(b), in 2007 and is codified at 42 U.S.C. §1395y(b)(8).  The purpose of the MSP statute, which was first enacted in 1980, is to reduce the growth of Medicare by shifting primary payment responsibility to other entities that are responsible for paying for health care.  

Until this announcement, reporting was set to begin on January 1, 2011, and applied to every personal injury settlement or payment (initially above $5,000) made to a Medicare beneficiary on or after October 1, 2010.  In its announcement, CMS indicates that only settlements entered into on or after October 1, 2011, will need to be reported to CMS, provided the settlement does not include an ongoing obligation for medical payments.  However, the October 1, 2010, date will remain in force for workers' compensation and no-fault insurance claims. The announcement notes that reporting entities will be permitted to report settlements entered into prior to October 1, 2011, should they wish to do so.  Indeed, CMS states that "early reporting is welcomed and encouraged."

CMS's announcement also makes corresponding changes to the pertinent dates for relevant dollar reporting thresholds.  Specifically, with respect to settlements and other payments made prior to January 1, 2013, with no ongoing responsibility for medicals, only settlements and payments above $5,000 must be reported.  That threshold then declines in later years, and disappears entirely for settlements and payments made on or after January 1, 2015.

If you have any questions regarding this development, or would like more information regarding the Medicare reporting program, please contact Robert Willmore of our Torts Group or Barbara Ryland of our Health Care Group.