More changes are in the works regarding Medicare secondary payer rules and workers' compensation, and they have earned the support of major insurance trade groups including the American Insurance Association and the Property Casualty Insurers Association of America.
As reported in "Legislation Would Smooth Insurer Reimbursements To Medicare," by Arthur D. Postal, Washington Bureau Chief for National Underwriter, P&C Magazine, H.R. 1063 was filed on March 14 in the U.S. House of Representatives. The specific purpose of the Strengthening Medicare and Repaying Taxpayers Act of 2011 is to amend title XVIII of the Social Security Act with respect to the application of Medicare secondary payer rules for certain claims, including workers' compensation.
The bill proposes that in the case of a conditional payment made by the Centers for Medicare & Medicaid Services (CMS) for items and services provided to the claimant, the claimant or applicable plan may at any time beginning 120 days before the reasonably expected date of a settlement, judgment, award, or other payment, notify CMS that a payment is reasonably expected, and request from CMS a statement of the conditional payment reimbursement amount.
The bill indicates that not later than 65 days after the date of receipt of this request, CMS shall respond to such request with a statement of reimbursement amount, which shall constitute the conditional payment subject to recovery related to such settlement, judgment, award or other payment. If CMS fails to provide such a statement of reimbursement amount for items or services, the claimant, applicable plan, or an entity that receives payment from an applicable plan shall provide an additional notice to CMA of such failure. If CMS fails to provide a statement of reimbursement amount within 30 days of the date of such additional notice, the claimant, applicable plan, and an entity that receives payment from an applicable plan shall not be liable for and shall not be obligated to make payment for any item or service related to the request, unless CMS demonstrates that the failure was justified due to exceptional circumstances.
Although not spelled out in the bill, the proposed legislation finally mandates that CMS promulgate regulations establishing a right of appeal and appeals process with respect to any determination for a payment made for an item or service under a primary plan, under which the applicable plan involved, or an attorney, agent, or third party administrator on behalf of such applicable plan, may appeal such determination. Such right of appeal shall include review through an administrative law judge and administrative review board, and access to judicial review in the district court of the United States.
New Threshold Exception
Regarding threshold exceptions, the bill indicates that any Mandatory Insurer Reporting requirements do not apply to any settlement, judgment, award, or other payment by an applicable plan. Instead, the bill introduces a new threshold exception of not more than the single threshold amount to be calculated by the chief actuary of CMS.
The bill proposes that not later than November 15 before each year, the chief actuary shall calculate and publish a single threshold amount for settlements, judgments, awards or other payments for conditional payment obligations arising from each of liability insurance (including self-insurance), workers' compensation laws or plans, and no fault insurance for that year. Each such annual single threshold amount for a year shall equal the expected average cost of collection incurred by the United States (including payments made to contractors) for a conditional payment from each of liability insurance (including self-insurance), workers' compensation laws or plans, and no fault insurance.
Regarding the $1,000 reporting penalty, the bill proposes to replace "shall be subject" with "may be subject" to a civil money penalty of up to $1,000 for each day of noncompliance. The severity of each such penalty shall be based on the knowing, willful, and repeated nature of the violation.
The bill indicates that CMS will publish a notice in the Federal Register soliciting proposals for the specification of practices for which sanctions will not be imposed, including for good faith efforts to identify a beneficiary. After considering the proposals submitted, CMS, in consultation with the Attorney General, shall publish in the Federal Register proposed specified practices for which such sanctions will not be imposed. After considering any public comments, CMS shall issue final rules specifying such practices.
Modified Reporting Requirements
The bill also proposes that CMS will modify the reporting requirements so that an applicable plan in complying with such requirements is permitted, but not required, to access or report to CMS beneficiary Social Security account numbers or health identification claim numbers.
Lastly, the bill proposes a statute of limitations by indicating that an action may not be brought by the United States with respect to payment owed unless the complaint is filed not later than three years after the date of the receipt of notice of a settlement, judgment, award, or other payment made. The bill also proposes that a civil money penalty may not be imposed with respect to failure to submit required information unless service of notice of intention to impose the penalty is provided not later than three years after the date by which the information was required to be submitted.
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