MMSEA Mandatory Total Payment Obligation to the Claimant (TPOC) Thresholds Extended

The Centers for Medicare and Medicaid Services (“CMS”) issued an alert on June 20, 2012 which revises the timeline and mandatory TPOC thresholds for liability insurance TPOCs. It has extended the $5,000 mandatory threshold period through September 30, 2013. This extension will give reporting entities, and CMS, additional time to prepare for the increased volume of cases that will be reported when the threshold drops. This threshold was originally scheduled to expire December 31, 2012. The $2,000 mandatory has consequently been extended to expire on September 30, 2013. The $600 mandatory threshold has been eliminated, but a minimum threshold of $300 has been added with no current expiration date.

It is not surprising that CMS has added the minimum reporting threshold of $300 as this will align with the threshold that CMS has enacted for lien resolution on liability settlements. On September 6, 2011 the Medicare Secondary Payer Recovery Contractor (“MSPRC”) announced that Medicare would not seek reimbursement on liability settlements of $300 or less if certain criteria are met. Since the purpose of MMSEA reporting is to ensure that liens are being reimbursed it is logical to have the minimum thresholds consistent for reporting and reimbursement. There is a discrepancy, however, since the criteria that must be met to avoid reimbursement were not included in the alert announcing the MMSEA reporting threshold. Time will tell if CMS adds the same criteria to the MMSEA reporting threshold requirements.

The chart below illustrates the new thresholds:

Read the full CMS Alert here.