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Guest Article

(From the August 25, 2008 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)

CMS Taking Steps to Implement New Medicare Secondary Payer Reporting Requirements

The Centers for Medicare and Medicaid Services (CMS) has set up a Web site to facilitate implementation of new mandatory reporting requirements relating to the Medicare Secondary Payer (MSP) rules for group health plans. The CMS Web site can be accessed at www.cms.hhs.gov/MandatoryInsRep. The new reporting requirements will be implemented on January 1, 2009, and the CMS’s Web site will be a “one-stop shop” for all relevant implementation and compliance materials.

Background on MSP Act and New Reporting Requirements

The MSP Act requires group health plans (GHPs) to be the primary payer for Medicare beneficiaries who –

are age 65 or older and working with coverage under an employer-sponsored and/or contributed to GHP, for an employer with 20 or more employees (or if it is a multi-employer plan where at least one employer has 20 or more full or part-time employees); are age 65 or older and have coverage under a working spouse’s employer-sponsored and/or contributed to GHP (the working spouse can be any age), for an employer with 20 or more employees (or if it is a multi-employer plan where at least one employer has 20 or more full or part-time employees); have End Stage Renal Disease (ESRD) and are covered by a GHP on any basis (Medicare is secondary for a 30 month coordination period); or are disabled and have coverage under their own or a family member’s GHP for an employer with 100 or more full or part-time employees (or if it is a multi-employer plan where at least one employer has 100 or more full or part-time employees).

Briefly, the Medicare, Medicaid, and SCHIP Extension Act of 2007 included a provision (“Section 111”) to require GHPs to collect certain information about when the plan is or has been primary to Medicare, and report that information to CMS. Section 111 did not make any substantive changes to the MSP rules.

Significantly, most GHPs already collect and report this type of information pursuant to CMS’s Voluntary Data Sharing Agreement (VDSA) effort. And even those GHPs not participating in VDSA must collect this type of information in order to comply with the MSP rules. As a result, CMS does not believe the new Section 111 reporting requirements will impose a significant burden on GHPs.

What Are the Specifics of the New Reporting Requirements?

Section 111 vests in the Secretary of Health and Human Services (HHS) the authority to decide what information must be collected, and how and when it must be reported. It also establishes stiff civil penalties for failing to comply with the disclosure requirements – as much as $1,000 per day per individual about whom the information is required to be reported. These penalties would be added to the Federal Hospital Insurance Trust Fund.

According to Section 111, responsibility for satisfying these reporting requirements will fall on the GHP’s insurer or third-party administrator. In the case of a GHP that is self-insured and selfadministered, the reporting burden rests with “a plan administrator or fiduciary.”

So far CMS (which is the HHS agency responsible for implementing and enforcing the new reporting requirement) has not issued guidance on the specific information that must be reported. However, the CMS Web site referenced above establishes the January 1, 2009 implementation date for GHPs and clarifies that reporting likely will be required no more frequently than quarterly, and will be handled electronically. The Web site also includes (or will include) the following information:

data elements for reporting related to GHP arrangements; Definitions and Reporting Responsibilities (which provide details to assist individuals/entities in determining if they are responsible reporting entities); “ALERT” regarding collecting Social Security Numbers (SSNs), Medicare Health Insurance Claim Numbers (HICNs), and Employer Identification Numbers (EINs); record layouts; time-frames/timelines (provides details on when registration for reporting must be completed, when reporting will start, time-frames for testing, etc.); “User Guides” for submitting data; a suggested model form for collecting Medicare beneficiary information; and what Medicare claims processing contractors need to know about Section 111.

Also Available on the CMS Web Site ...

Section 111 establishes similar reporting requirements for liability insurance, no-fault insurance, and workers compensation insurance, which also are subject to the MSP rules. The reporting requirements for these types of insurance will not be implemented until July 1, 2009. However, the same CMS Web site will house the implementation and compliance materials for the reporting requirements applicable to these entities.

The information in this Washington Bulletin is general in nature only and not intended to provide advice or guidance for specific situations. If you have any questions or need additional information about articles appearing in this or previous versions of Washington Bulletin, please contact: Robert Davis 202.879.3094, Elizabeth Drigotas 202.879.4985, Mary Jones 202.378.5067, Stephen LaGarde 202.879-5608, Erinn Madden 202.572.7677, Bart Massey 202.220.2104, Mark Neilio 202.378.5046, Tom Pevarnik 202.879.5314, Sandra Rolitsky 202.220.2025, Tom Veal 312.946.2595, Deborah Walker 202.879.4955. Copyright 2008, Deloitte.

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