3 Things You Need to Know About the Change in MMSEA Reporting Thresholds

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On February 28, 2014, the Centers for Medicare & Medicaid Services (“CMS”) issued an alert which increases the Section 111 mandatory reporting threshold for a Total Payment Obligation to Claimant (“TPOC”) agreed to on or after October 1, 2014. Following the Alert, CMS issued a new User Guide on March 3, 2014. The mandatory reporting threshold will be increased for liability TPOCs which are over $300 to mandatory reporting for TPOCs over $1,000.

 

Here's the three things you need to know in order to stay compliant:

1. There are inconsistencies in wording between CMS’s Alert and the new Version 4.2 of the User Guide; therefore, the following will provide guidance based on the User Guide, which was issued after the date of the Alert:

  • Mandatory Section 111 reporting thresholds for TPOCs:
    • Settlements agreed to on or after October 1, 2013 remains at amounts over $2,000
    • Settlements agreed to on or after October 1, 2014 moves to amounts over $1,000
  • Minimum Section 111 reporting thresholds for TPOCs:
    • Settlements agreed to on or after October 1, 2013 remains at amounts over $300
    • Settlements agreed to on or after October 1, 2014 remains at amounts over $300

2. The impact to reporting entities is that as of October 1, 2014, fewer settlements will need to be reported since the mandatory threshold will be settlements over $1,000 instead of settlements over $300.

  • Please note, however, that CMS did not increase the mandatory reporting threshold for TPOCs related to workers’ compensation claims; so the mandatory reporting remains at amounts over $300. Additionally, TPOCs related to No-Fault cases continue to have no de minimis dollar threshold.

3. CMS issued an alert on February 18, 2014 which increased the threshold for lien resolution from $300 to $1,000 for trauma claims only.

  • This change was in response to Section 202 of the Strengthening Medicare and Repaying Tax Payers Act of 2012 (“SMART Act”) which was meant to ensure that the federal government does not spend more money pursuing a secondary payer claim than it could recover from that claim. Since the purpose of Section 111 reporting is to notify CMS of cases where CMS may have reimbursement opportunities, it is reasonable to increase the Section 111 reporting thresholds to mirror the lien resolution thresholds as much as possible.

To view the new User Guide as posted by the CMS on its website, please click here.

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