Medicare Secondary Payer Enhancement Act of 2010

Question: What is the Medicare Secondary Payer Enhancement Act of 2010?

Answer: Recently, Congressmen Patrick Murphy (D-PA) and Tim Murphy (R-PA) introduced HR 4796, a bill titled the “Medicare Secondary Payer Enhancement Act of 2010.” This piece of legislation purports to provide a seemingly less complicated approach to reimbursing Medicare for conditional payments made for injury-related care under the Medicare Secondary Payer (“MSP”) Act (42 U.S.C. §1395y(b)). Additionally, this bill purports to allow for less onerous requirements for entities obligated to report to Medicare under the recently enacted Medicare, Medicaid and SCHIP Extension Act of 2007 (“MMSEA”).

If passed by Congress and signed into law, the Medicare Secondary Payer Enhancement Act of 2010 would provide for the following:

• Voluntary Calculation and Payment of Conditional Payments. Claimants and plans would be able to submit a payment to Medicare, calculated in good faith, as full satisfaction of any reimbursement obligation to Medicare for conditional payments made by Medicare if submitted within ninety (90) days of the anticipated settlement, judgment, award or other payment.
• Secretary’s Ability to Contest Amount of Payment. Medicare would have the ability to contest the payment made according to the above procedure within seventy-five (75) days of receipt of such payment from the claimant or plan if Medicare determines that the payment made was not the total amount owed by submitting a final demand to the claimant or plan for the remaining balance owed.
• Request for Final Demand for Reimbursement. The claimant or plan would be able to request a final demand amount from Medicare within 120 days prior to the expected date of settlement, judgment, award or other payment. Within sixty (60) days of receiving such final demand request, Medicare would provide that final demand. The claimant and plan would then have sixty (60) days from the receipt of that final demand from Medicare to provide payment as satisfaction of that final demand amount.
• Failure of the Secretary to Provide Final Demand for Conditional Payment. If Medicare failed to provide final demand as set forth above, the claimant or plan would not be liable for submitting payment to Medicare to satisfy any outstanding reimbursement claims asserted by Medicare.
• Right of Appeal. Medicare would establish a right of appeal and appeals process for the payment procedures set forth above, including review through an Administrative Law Judge and access to the U.S. District Court.
• De Minimus Threshold. There would be no reimbursement obligation when the settlement, judgment, award or other payment did not exceed $5,000.
• Reporting Requirement Safe Harbors. The MMSEA would be amended to allow Medicare the discretion not to apply the statutory $1,000 penalty for each day of noncompliance with respect to a responsible reporting entity’s reporting obligation. This section would also allow for the creation of safe harbors from penalties asserted under the MMSEA.
• Use of Social Security Numbers and Other Identifying Information in Reporting. The MMSEA would be amended so that responsible reporting entities would not be required to access or report social security numbers or health identification claim numbers (i.e., Medicare numbers) of claimants.
• Statute of Limitations. A three (3) year statute of limitation, measured from the date of reporting, would be established within which time the federal government must bring any action associated with compliance under the MSP.
• User Fee. Each person or plan that submits a payment to fulfill a MSP reimbursement obligation or each person or plan that submits a request for a final demand letter as set forth above would be subject to a $30 fee, payable to Medicare.

We will continue to follow the progress of this legislation, in addition of other pieces of legislation that may affect the settlement community. Please check www.garretsongroup.com often for updates as well as new client advisories and practice tips.