It’s been six years now since a federal law was signed requiring that settlements or payments of damages to Medicare beneficiaries be reported to the Department of Health and Human Services (HHS). The Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) mandates that liability insurers (including self-insured entities), no-fault, and workers’ compensation insurers report to the Secretary of HHS all of their settlement activity pertaining to a Medicare beneficiary. Those reporting provisions took effect in 2009, and while the dust has settled on the issues of which entities must report and how those reports are to be submitted, it seems that the patient/claimant data required to produce the reports is still controversial, and a subject the courts have had to resolve only recently.
In MMSEA parlance, all of the groups that must disclose settlement activity are known as “Responsible Reporting Entities,” or RREs. In order to issue those disclosures, RREs need to determine whether claimants receiving payments were, or are, enrolled with Medicare. MMSEA reporting is required as long as the claimant is or was enrolled in Medicare, even if the claimant did not use his Medicare card in a particular case.
To determine a claimant’s Medicare enrollment status, RREs must submit a query to Medicare’s database containing specific claimant data, including the individual’s Social Security number or health insurance claim number, plus his first and last name, gender, and date of birth. There is no way to verify an individual’s Medicare enrollment at the present time without providing that person’s Social Security number or health insurance claim number, but claimants will often argue forcefully against such disclosure.
In fact, as recently as May 2013, the Centers for Medicare & Medicaid Services (CMS) had to issue an alert advising that the collection of Social Security and health insurance claim numbers was appropriate for MMSEA compliance.
Later that month, the question arose again in federal litigation in Pennsylvania. On May 30, 2013, the U.S. District Court, Eastern District of Pennsylvania, ruled that a plaintiff’s Social Security number was a material term in a settlement in an asbestos case. In that case, the parties had agreed on a dollar figure to settle the case, but the plaintiff—a spouse making a loss of consortium claim, rather than a claim for bodily injury— did not want to disclose her Social Security number. And without her Social Security number, the defendant would not release the payment of damages, because the company maintained that her Social Security number was needed to fulfill its MMSEA reporting obligations. The plaintiff subsequently asked the court to enforce the settlement agreement, and require that the defendant issue payment. The plaintiff argued that because the loss of consortium claim did not involve a claim for medical damages, the defendant did not have to determine her Medicare enrollment and report its payment to her under the MMSEA requirements.
But, the court disagreed—noting that the CMS “User Guide” specifically instructs RREs to report loss of consortium claims, even in instances where loss of consortium does not involve a mental or physical injury. The court further held that any settlement would require the defendant’s liability insurer to determine whether the plaintiff was entitled to Medicare benefits, in order to ascertain whether its payment to her needed to be reported per the MMSEA. Thus, the defendant’s insurer would need the plaintiff’s Social Security number to establish whether or not the plaintiff was enrolled in Medicare.
The court’s ruling follows similar recent decisions in New York and Connecticut. In Bey v. City of New York, 2013 WL 439090 (E.D.N.Y. Feb. 5, 2013), the U.S. District Court, Eastern District of New York, ruled that a plaintiff was deemed to have failed to fulfill his obligations under the settlement agreement until he released his Social Security number, which the defendant needed for MMSEA reporting. Likewise, in 2012, a Connecticut court issued a protective order restricting the use of a plaintiff’s Social Security number only to what was necessary for the defendant to determine her Medicare enrollment status, and comply with the MMSEA. In that case, the plaintiff had objected to the defendant’s demand for her Social Security number; the court overruled that objection and issued the protective order outlining the conditions for the release of the number.
These cases mirror earlier decisions in which courts similarly recognized the defendants’ need for this information, as a prerequisite to fulfilling MMSEA obligations. In Seger v. Tank Connection, LLC, 2010 WL 1665253 (D. Neb. Apr. 22, 2010), the court determined that the plaintiff was required to provide his Social Security number to the defendant, in light of the defendant’s federal reporting obligations. In addition, in Smith v. Sound Breeze of Groton Condominium Ass’n, Inc., 2011 WL 803067 (Conn.Super.Ct. Feb. 3, 2011), the court ordered the plaintiff to release her Social Security number, because the case could not be settled without it.
Upcoming Changes in Data Needed for Reporting:
Presumably in response to complaints about the reliance on Social Security numbers, Congress has passed a law mandating that, by July 10, 2014, the Secretary of HHS can no longer require the use of Social Security and health insurance claim numbers for accessing records of, and report to, CMS. Under the Strengthening Medicare & Repaying Taxpayers (SMART) Act, which President Obama signed last year, the Secretary of HHS can request 12-month extensions of the upcoming deadline. So, although the changes may not take effect as quickly as initially intended, the bottom line is that HHS will soon have to come up with some sort of alternative identification system.
Until those changes occur, however, the use of Social Security numbers is unavoidable—despite many claimants’ reticence to disclose that information. But the recent court rulings discussed here, which affirm the propriety of defendants’ requests (under MMSEA) for Social Security numbers, may be a useful resource in resolving those disputes.
Until the HHS takes steps, as specified in the SMART Act, to accept alternative means for identifying claimants in the CMS system, insurers should rely on recent case law to demonstrate their absolute requirement for a claimant’s Social Security number.
For more information, please contact GRG’s MMSEA Compliance Director Marlene Wilson at (704) 559-4300 or firstname.lastname@example.org.