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New Lower Threshold ($5,000) for Mandatory Medicare Reporting Requirement Effective October 1, 2012

Effective October 1, 2012, all awards, judgments and settlements over $5,000 must be reported to the Centers for Medicare & Medicaid Services (CMS) where the claim has a medical component and the settling claimant is a Medicare beneficiary.

The claim could be a worker's compensation claim or an employment claim; the "medical component" requirement is satisfied if the claim includes a claim for emotional distress or other psychological damages.

The reporting requirement, enacted by Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) first took effect in 2011, with a higher threshold for reporting. The threshold has now dropped to $5,000, meaning that virtually all employer settlements will be reportable. Additionally, where an employer assumes ongoing responsibility for medicals (ORM), that fact is also subject to the reporting requirement. In fact, ORM must be reported even if there is no lump-sum settlement accompanying the ORM.

Employers who are insured for worker's compensation and EPLI claims will generally find that their insurance carrier will handle the MMSEA reporting. However, some carriers do not. Additionally, self-insured or uninsured employers are responsible for doing the reporting themselves.

Importantly, the settling employer is responsible for verifying the claimant's Medicare status. Thus, it is important to be aware of MMSEA requirements during the settlement process, and to ensure that the necessary information and releases are obtained. The recommended way to verify Medicare status is through the MMSEA reporting process.

MMSEA reporting is a three-step process, and can be somewhat daunting in its complexity. Wimberly Lawson attorneys are available to answer your questions and help with the registration and reporting process.

See the Alert issued February 17, 2012 for additional background on this issue.

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