In May, 2009, the Centers for Medicare and Medicaid Services (CMS) issued an alert to employers regarding the amendment of Medicare Secondary Payer provisions, Section 111 of the Medicare, Medicaid and SCHIP Extension Act. Section 111 reporting requirements are in addition to existing Medicare Secondary Payer (MSP) law and regulations. The new reporting requirements are effective January 1, 2009 for those plans that already have a voluntary data sharing agreement in place with the CMS; otherwise, the effective date is July 1, 2009
The purpose of the new reporting rules is to determine primary and secondary payer responsibilities upfront, rather than after claims are paid. Going forward, the new reporting rules will eliminate the work associated with recovery, eventually ridding group health plans (GHPs) of those pesky CMS notices that advise employers of a years-old claim that CMS wrongfully paid as primary. In return, however, responsible reporting entities (RREs) such as insurers, third-party admi
New Medicare Secondary Payer Mandatory Reporting Rules
nistrators and plan administrators/fiduciaries for self-insured, self-administered GHPs must report certain data to CMS on a quarterly basis beginning either January 1, 2009 or July 1, 2009 (see above)
What is the significance of Medicare Secondary Payer?
Medicare Secondary Payer (MSP) refers to claim situations where another entity is required to pay for covered services before Medicare does regardless of the patient’s entitlement to Medicare. For example, Medicare is secondary for active employees who are age 65 and covered under an employer’s GHP.
When is Medicare secondary?
Medicare is generally secondary to group health plans when the Medicare beneficiary is
-
Age 65 or older and covered by a GHP on the basis of employment, either as an employee or as the dependent of an employee. Employers with fewer than twenty employees are exempt.
-
Less than age 65 and disabled and covered by a GHP on the basis of employment either as an employee or as the dependent of an employee, provided the employer has at least one hundred employees.
-
Any age and having end-stage renal disease (ESRD) with GHP coverage on any basis.
What data must RREs report?
Reporting data elements include
-
Health Insurance Claim Number (HICN)
-
Social Security Number (SSN)
-
Name
-
Employer size
-
Employee status
-
Date of birth
-
Effective date of coverage
-
Employer tax identification number (TIN)
-
Policy number
-
Relationship code
For whom must an RRE report this data?
GHPs must report this data for all active covered individuals who are age 65 and older and participate in the plan and for all individuals who are age 55 through age 65 and covered based on their current employment status or their spouse’s current employment status. The age 55 limitation drops to age 45 effective January 1, 2011. GHPs must also report information for all covered individuals who are under age 55, known to be entitled to Medicare and covered based on their own or a family member’s current employment status. This includes individuals who have been receiving kidney dialysis or who have received a kidney transplant, regardless of the current employment status.
Responsible reporting entities have until the date of their submission in the first quarter of 2011 to submit records for spouses and other family members who are active covered individuals and whose initial date of coverage was prior to January 1, 2009.
Are any employers exempt from the new MSP reporting requirements?
Small employers (less than 20) are exempt from the new reporting rules as are health care flexible spending accounts, health savings accounts, and stand-alone dental, vision and mental health plans from compliance. Health reimbursement accounts (HRAs) ARE subject to the new reporting requirements.
What are my compliance obligations as an employer?
Your GHP insurer or TPA is responsible for reporting health insurance information about your employees to CMS; however, you must ensure that your insurer or TPA has the required information for all covered individuals ages 55 and older (age decreases to 45 January 1, 2011). You should review your enrollment data to ensure that you have spousal Social Security numbers. If you are missing spousal Social Security numbers, open enrollment may provide a good opportunity to collect the missing information.
Pay attention to these new reporting requirements. The penalties are $1,000 per day per individual for whom information should have been reported. The penalty is in addition to claims, and CMS recommends retaining MSP records for ten years.
Where Can I get more information on the new MSP reporting requirements?
Find guidance from CMS at www.cms.gov/mandatoryInsRep/ and be sure to print Reporting Dos and Don’ts for your reference.
Disclaimer: This material is for the sole purpose of providing general information and does not under any circumstances constitute legal advice and should not be used as a substitute for legal advice. You should seek the advice of counsel when applying the requirements to your plan. For more information on this ErisaALERT contact us by phone at 773-857-1137 and ask for Leanne Fosbre or 610-524-5351 and ask for Mary Andersen or 973-994-7539 and ask for Theresa Borzelli.
To comply with Circular 230 issued by the IRS, we hereby inform you that any tax advice contained in this communication (including attachments and/or enclosures, if any) is not intended or written to be used for the purpose of (i) avoiding penalties that may be imposed under the Internal Revenue Code, or (ii) promoting, marketing or recommending to one or more taxpayers any transaction or matter addressed herein.
