At the 19th Annual Workers' Compensation and Disability Conference & Expo, Las Vegas, NV, attorney Robert Rassp interviewed author and editor Jen Jordan of MedVal on the new handbook The Complete Guide to Medicare Secondary Payer Compliance by LexisNexis. To order The Complete Guide to Medicare Secondary Payer Compliance, click here. To view the video version, click here. An edited transcript is set forth below:
Robert: Tell me about the book.
Jen: Well, this is the first comprehensive guide to Medicare Secondary Payer compliance. As you are aware, under the Medicare Secondary Payer Act, insurers are not allowed to shift the burden of future medical care post-settlement to Medicare. So essentially there are steps that need to be taken. After some amendments in 2007 we now have three very distinct activities we need to consider on any given settlement, one of which is actually going to start as of January 1st of 2011. This is really pertinent material for the present time. MMSEA Section 111 reporting requirements require that the responsible reporting entity report any claims involving a Medicare beneficiary. And in workers' compensation, that includes two reporting instances: one where you report the actual initiation of the claim, that is called ORM, and there is a subsequent reporting for the TPOC, total payment obligation to claimant, which means you have reached a settlement. What this does to workers' comp claims is, it puts Medicare on notice immediately so they know not to make payment. If they should make payment either on purpose or by accident, they know where to look to get the money back. As of January 1, it is a different ball game. We are spoon feeding the federal government the information they need, so people are not entirely used to a proactive approach by the federal government, they usually make them - what they call - "pay and chase". So it is a totally different ball game starting as of the first of the year.
Robert: So this book is really intended for claims personnel, attorneys, claimants' attorneys, because it really covers and raises four issues in every case in which a claimant is eligible for Medicare. One, it touches on an issue of how a workers' comp settlement could affect a person's Social Security disability benefits. It also covers the three issues that are more pertinent to us in the book, that is conditional payments made by Medicare for work-related medical treatment during the claim prior to the settlement, and, secondly, to covering future medical treatment, as you have indicated, and third, the question about Section 111 reporting. All of these 3 things are somewhat difficult, complex issues that are facing all of the workers' compensation communities nationwide, isn't that right?
Jen: Yes. The scary part about all this is the failure to comply carries some real scary penalties. Failure to report a claim under MMSEA carries a $1,000 per claim per day penalty. With insurers only getting an opportunity to report once every 90 days and no guidance whatsoever given to us in the reporting user guide they published, we don't necessarily know what that entails. Is it a $90,000 penalty for missing a claim? How are they going find out? Are they going to send auditors in? There is a lot of uncertainty here with a really big dollar amount attached to it. With regard to conditional payments, they - "they" being CMS - have the right to recover from the original party, so the insureds, self-insureds, the defendants, they also can come after anyone in receipt of funds from the settlement, and that includes every claimant's attorney who takes an attorney's fee. Everyone has a vested interest in making this happen. It is not that it's -- it is not that difficult of a task. It is just very difficult to understand, so part of the task of writing this book is bringing everyone on the same page. If they understand what it is we are doing and why we are doing it, they have a better chance of maybe figuring out how to do it in a more timely manner and wrap their brains around it early on in the process instead of the last minute as they are trying to get the checks cut, and overall I think everyone will be better off and get a better understanding of the subject matter.
Brad: Jen, if you don't mind me asking a question from the audience here, how have they come down on our RREs and the definition of who is actually the responsible reporting entity for the purposes of reporting these claims? I know there was some confusion over self-insureds.
Robert: They kept changing their minds about it.
Jen: Well, they still have a lot of unanswered questions. Your RRE is going to be the insured. They can't contract the responsibility to say they are TPA. They can name their TPA as their agent, but their agent is not responsible for the penalty. The RRE is always going to be the person or the entity that ultimately is responsible for the claim.
Brad: Where are they at with these companies that have insurance that they have high deductibles?
Jen: There would be multiple reporting requirements on the same exact claim. So if a self-insured has a retention of say $500,000, if the claim stays within the $500,000, only the self-insured would report. If it taps into their excess layer, then the self-insured would report up to its half mill and the excess carrier would report whatever it pays on its claim. Multiple layers could result in many RREs reporting the same claim. I have an MDL where there are 10 insurance companies and a self-insured all paying some portion of one claim. CMS will be getting 11 reports from every settlement that they reach.