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New Mandatory Medicare Reporting Requirement for Liability and Worker's Compensation Payments

An amendment to the Medicare Secondary Payer provisions now requires that insurers, including self-insured employers, report all "settlements, judgments, awards, or other payment[s]" to Medicare beneficiaries to the Centers for Medicare and Medicaid Services (CMS). Any settlement of any claim, or any payment for any claim, must be reported to Medicare regardless of whether the claim appears to have a medical component.

Moreover, when an insurer or self-insured employer assumes ongoing responsibility for medicals ("ORM"), which is often a component of worker's compensation claims, the ORM must be reported to Medicare if the claimant is a Medicare beneficiary.


Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 ("Section 111") created a new, mandatory reporting requirement for entities that pay liability and worker's compensation claims to Medicare beneficiaries. The reporting requirement also applies to entities that assume ongoing responsibility for medicals as to Medicare beneficiaries. After many delays, CMS finally began implementation of the law in 2011. Liability insurance reporting is phasing in this year; worker's compensation reporting began phasing in last year.

Although the reporting requirement only applies when the claimant is a Medicare beneficiary, CMS takes the position that paying entities should report the claim in all cases, and let CMS make the determination as to whether or not the claimant is in fact a Medicare beneficiary. We recommend this approach as well; the penalty for noncompliance is a civil penalty of $1,000 per day of noncompliance, per claimant.

Liability Claims

The reporting requirements for liability claims are phasing in based upon the size of the claim. All claims entered into on or after October 1, 2011 and totaling $100,000 or more per claimant must be reported. Claims must be reported by the end of the calendar quarter following the quarter in which the payment obligation was assumed. For example, if the payment obligation was assumed between October 1, 2011 and December 31, 2011, the claim must be reported by March 31, 2012. The payment obligation is assumed upon the execution of a settlement agreement or court order imposing upon the insurer or self-insured employer the obligation to pay the claimant. If there is no agreement or order, then the operative date is the date that payment is made.

The reporting thresholds drop to $50,000 per claimant as of April 1, 2012; $25,000 per claimant on July 1, 2012; and $5,000 per claimant on October 1, 2012. For calendar year 2013 the reporting threshold will be $2,000 per claimant. The threshold drops to $600 per claimant in 2014, and drops to zero in 2015, at which time all claims must be reported.

Worker's Compensation Claims

All worker's compensation settlements or payments above $5,000 must be reported now. Additionally, worker's compensation settlements or payments entered into on or after October 1, 2010 may be subject to a retroactive reporting requirement.

As with liability claims, the reporting threshold for worker's compensation drops to $2,000 in 2013, $600 in 2014, and zero in 2015.

Ongoing Responsibility for Medicals ("ORM")

Whenever an entity assumes ORM as to a Medicare beneficiary, that fact must be reported to Medicare. The ORM may be reported in addition to a settlement, etc., or it may be reportable as a stand-alone piece of information. Additionally, ORM assumed on or after January 1, 2010 may be subject to a retroactive reporting requirement.

Worker's compensation ORM may be excluded from the reporting requirement through 2012 if the ORM meets all the following criteria: (1) the claim is for "medicals only"; and (2) the associated lost time from work is no more than seven days; and (3) all payment(s) has/have been made directly to the medical provider; and (4) the total payment for medicals is less than $750.

How to Report

The insurer or self-insured employer that actually incurs the responsibility for payment or ORM is responsible for Section 111 reporting. The payer is known as the "responsible reporting entity" or "RRE." RREs must register online with the Medicare Coordination of Benefits Contractor (COBC) in order to submit reports.

Once an RRE is registered, the RRE can designate an agent to complete the reporting. Prior to reporting, the RRE or its agent can run a query on the COBC system to determine whether or not a particular claimant is a Medicare beneficiary. (Again, the full reporting requirement only applies if the claimant is a Medicare beneficiary.)

Wimberly Lawson can help RREs complete their initial registration, serve as a reporting agent, and/or answer questions about this important new reporting requirement. Please contact your Wimberly Lawson attorney for further information.

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