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Feds push back deadline for reporting payments to Medicare beneficiaries

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in Discrimination and Harassment,Employee Benefits Program,Employment Law,Human Resources,Small Business Tax,Small Business Tax Deduction Strategies

The federal government’s Centers for Medicare and Medicaid Services (CMS) has postponed implementation of new regs that would have required employers to report any medical benefits payments to employees who are eligible for Medicare.

The requirement now won’t take effect until the first quarter of 2011. It had been scheduled to start Jan. 1 of this year. The delay gives employers time to become familiar with the regulation, which is available online at www.Section111.cms.hhs.gov.

At the beginning of next year, employers will have to report any medical benefits payments made to Medicare-eligible employees after Oct. 1, 2010.

Despite the pushed-back compliance deadline, it’s still important for employers to understand the regulation, according to H. Bernard Tisdale, an attorney with the employment law firm Ogletree Deakins.

It applies to organizations that are self-insured or pay deductibles on Employment Practices Liability Insurance (EPLI) coverage. If you could conceivably have to settle a personal injury claim involving an employee who is eligible for Medicare, you need to understand this new law.

The reporting requirement is contained in the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA), which became law in 2007. It was designed to enable Medicare to determine when its beneficiaries have received payment or reimbursement for medical expenses that Medicare could recoup.

Medicare is a government-funded health insurance program primarily for individuals age 65 or older. However, Medicare isn’t intended to be the primary insurance coverage for people who have other funds available to pay for medical treatment. In other words, Medicare is a “secondary payer.”

If a beneficiary receives payments from a primary payer—such as a self-insured employer—Medicare wants to know about it.

What will be required?

Starting next year, section 1395y(b)(7) of the MMSEA will require a “responsible reporting entity” (RRE) to register with the Coordination of Benefits Contractor (COBC) at the CMS.

Reporting entities must electronically file certain information on third-party claims involving payments to Medicare-eligible claimants. This information includes identifying information about the individual (including his or her Social Security number) and the amount paid to the individual to resolve all or part of a claim for medical expenses. The payment is referred to as the Total Payment Obligation to Claimant (TPOC).

An RRE can be any entity that is self-insured for all or part of a particular claim involving medical expenses. Where the claimant is a Medicare beneficiary, the RRE must report the payment to the COBC if the claimant has made a claim for medical expenses or the claim results in a settlement, judgment, award or other payment to the Medicare beneficiary that resolves claims for medical expenses.

Why is this important for employers?

The problem is this: Any employer that is self-insured for all or part of any claim for medical expenses (such as a personal injury claim, which can include discrimination or harassment claims) can be an RRE and thus subject to the reporting requirement.

Why is this important? Starting next year, an RRE that fails to properly report to the COBC a covered payment to a Medicare-eligible claimant will be subject to a civil penalty of $1,000 for each day it fails to report the payment.

Group health plan insurers and third-party administrators of self-funded group health plans were required to begin providing information to CMS on certain individuals entitled to Medicare benefits in 2008.

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