On December 29, 2007, President Bush signed into law the “Medicare, Medicaid and SCHIP Extension Act of 2007” (“MMSEA”), adding yet more teeth to the Medicare Secondary Payer (“MSP”) Statute. Section 111 of the MMSEA requires the providers of liability insurance (including self-insurance), no fault insurance and workers’ compensation insurance (hereinafter “insurers”) to determine the Medicare-enrollment status of all claimants and report certain information about those claims to the Secretary of Health and Human Services (the “Secretary”). With the objective of assisting the Secretary to coordinate benefits and uncover potential reimbursement claims, this important legislation reinforces that the federal government is intent on ensuring Medicare always is treated as the payer of last resort. The penalty for non-compliance has teeth indeed - $1,000 per day per beneficiary for each day the insurer is out of compliance. This penalty is in addition to the often-feared, rarely-levied “Double Damages Plus Interest” penalty that defendants (as primary payers) can be fined if Medicare’s reimbursement claim is ignored in any settlement. The new rules apply to settlements on or after October 1, 2011.
The ongoing transformation of Medicare reimbursement policy and practice creates continual challenges for parties settling single event and mass tort personal injury claims. Undeniably, lien resolution is no longer an administrative function that can be addressed by the attorneys on the back end of cases. Rather, lien resolution has evolved over the last several years into one of the most demanding conditions precedent in any settlement agreement, often requiring counsel to affirmatively notify governmental healthcare agencies (i.e., Medicare and Medicaid) of claimants who are settling their cases, and then proactively satisfying those agencies’ interests prior to disbursement of settlement proceeds to those claimants. In this paper, we attempt to break down the MMSEA reporting requirements and the implications for parties settling single event and mass tort personal injury claims. The point is to spark dialogue and provide an MMSEA roadmap for those impacted entities.
Among the tips included in this pamphlet are: