Guest Article

(From the May 4, 2009 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)

July 1, 2009 Implementation for New Medicare Secondary Payer Reporting

Group health plans that are not voluntarily sharing data with the Centers for Medicare & Medicaid Services (CMS) will need to confirm that they are able to comply with the new reporting requirements scheduled to go into effect beginning July 1. The responsible reporting entity is typically the plan's insurer or third party administrator -- however, where the plan is self-insured and self administered, the plan administrator or fiduciary is required to report. Specific data is required to enable CMS to verify that benefits are accurately being paid where the Medicare is a secondary payer.

Background

The Medicare, Medicaid, and SCHIP Extension Act (MMSEA) of 2007 added new mandatory reporting requirements for group health plans and for other arrangements that are impacted by the Medicare Secondary Payer rules (i.e., liability insurance, no-fault insurance, and workers' compensation). The purpose of the new reporting requirements is to enable CMS -- the agency responsible for the oversight of Medicare -- to monitor the proper payment of benefits where Medicare is a secondary payer.

Medicare is a secondary payer to a group health plan where the participant is a Medicare beneficiary who:

Medicare is also a secondary payer to liability insurance, no-fault insurance and workers' compensation.

New Reporting Obligations for Group Health Plans

MMSEA requires group health plans to report relevant information to CMS beginning July 1, 2009. Reports are submitted electronically, by those entities that are designated by CMS as "responsible reporting entities."

For group health plans, the responsible reporting entity (RRE) is generally the plan's insurer or third party administrator. Where the plan is self-insured and self-administered, the RRE is the plan administrator or a fiduciary. An RRE may retain an agent to submit the necessary reports, but will nonetheless remain responsible for the accuracy and compliance of the reports submitted to CMS.

The required data is provided electronically to CMS' Coordination of Benefits Contractor -- after the RRE registers on the CMS website. The reporting process is built upon the Voluntary Data Sharing and Voluntary Data Exchange programs already in place with CMS. RREs who do not have a Voluntary Data Sharing Agreement or Voluntary Data Exchange Agreement in place with CMS need to register on-line. Once the registration application is submitted, a Coordination of Benefits Contractor works with the RRE to establish the data reporting process.

Group health plans are required to report specified information for participants who are Medicare beneficiaries and for whom plan coverage is primary to Medicare. The CMS MMSEA Section 111 MSP Mandatory Reporting GHP User Guide sets forth in considerable detail the data requirements for the reporting. Since an RRE may not know whether a covered individual is a Medicare beneficiary, CMS provides two approaches that can be used -- reporting on individuals who are defined as "active covered individuals," or using a "finder file" to query on an individual's Medicare entitlement and enrollment.

Compliance Dates

The following key compliance dates for group health plans are posted on the CMS website:

CMS is providing an extension for health reimbursement accounts (HRAs) until the fourth quarter of 2010 (i.e., the files submitted in October -- December 2010). CMS instructs that information on HRAs should not be reported until then, and advises that it will provide further instructions on that reporting.

RREs must submit data files on a quarterly basis during their assigned file submission timeframe. Each RRE will receive its particular file submission timeframe once the Coordination of Benefits Contractor processes the registration.

Resources

All information and official instructions for the new MMSEA reporting requirements, including data reporting procedures, can be found on the CMS dedicated website: www.cms.hhs.gov/MandatoryInsRep.

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, Deborah Walker 202.879.4955. Copyright 2009, Deloitte.