Insurers Call for Clarity, Easing With Medicare Secondary Payer Reporting

Mandatory Medicare Secondary Payer reporting remains an overly broad and uncertain burden that needs to be clarified, property/casualty insurers said in response a U.S. Department of Health and Human Services request for comments. Six months into a second one-year delay of reporting regulations for liability claims that do not involve ongoing medical responsibility, insurers were disappointed to not see MSP issues addressed in an HHS proposal for streamlining existing regulations and regulatory review.

"We're dealing with an agency that has no clue about how the property/casualty industry works," said Peter Foley, vice president-claims administration for the American Insurance Association. "We've been working with them and we're trying to get to a point that's not crazy."

MSP is designed to reduce costs to the Medicare program by requiring other insurers of health care for beneficiaries to pay to Medicare, according to CMS. It applies in three situations: where there is liability insurance, such as for an accident; where there is workers' compensation coverage, such as for a job-related injury; and where there is an employer's large group health plan. The purpose of MSP reporting is to ensure Medicare is being used as the secondary source of funds for a beneficiary of liability, no-fault or workers' compensation medical payments. The reports are to be filed electronically to the Centers for Medicare & Medicaid Services on a quarterly basis.

The current start date for the mandatory reporting requirements for liability claims that do not involve ongoing medical responsibility is Jan. 1, 2012, nearly two years after the originally scheduled start date. Industry representatives said they needed more time to prepare for the implementation date for new rules established under the Medicare, Medicaid and SCHIP Extension Act of 2007 (BestWire, Nov. 16, 2011).

Part of insurers' concerns is about a mismatch of regulatory guidance and legislative language, industry representatives have said. For example, under current law, insurers in violation could be subject to fines of up to $1,000 per claim per day -- on information that is reported quarterly (BestWire, March 23, 2011).

In a letter to HHS, which oversees CMS, Foley faulted federal officials for "grossly understated" estimates of the regulatory burden. According to AIA, the total number of entities that would need to comply as registered reporting entities is more than 25,000 -- six times the estimated number. Officials estimated the industrywide costs of compliance for non-group health plans at approximately $10 million; according to AIA, no insurance company can adhere to system requirements at less than $1 million per year, each.

Without formal regulatory language near completion, insurers may request another delay, Foley said. "We either want that or we want clarity in the regulation," he said.

"The present reporting and recovery procedures are having a serious negative impact on the resolution of liability, no-fault, and workers' compensation claims. Many settlements are being delayed, which means that accident victims are waiting longer to be paid," the Property Casualty Insurers Association of America said in a recent statement to the House Energy and Commerce Subcommittee on Oversight and Investigations.

(By Sean P. Carr, Washington Bureau Manager: [email protected])