U.S. Medicare Requirements

May 2009

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The United States recently revised its laws regarding the disclosure of payments made to Medicare beneficiaries. With effect from 1 October 2009, the Medicare Medicaid and SCHIP Extension Act of 2007 (MMSEA) will require that quarterly reports are filed to Medicare by a Required Reporting Entity (RRE) indicating all payments that are made by the RRE to Medicare beneficiaries. An RRE that fails to comply with the MMSEA may be fined up to $1,000 per day for non-compliance. 

An entity has a responsibility to comply with the MMSEA if it resolves personal injury claims by settlement, judgement, award or other payment by directly making payment from its own funds to a claimant. An entity that maintains a liability insurance and does not make direct payment itself will not be considered to be an RRE. Rather, the liability insurer will have RRE status. 

A shipowner will most likely be an RRE and will therefore be required to report payments to Medicare beneficiaries in the event, for example, of crew injury, while a P & I Club is unlikely to be deemed to be an RRE because it is not making direct payment of Medicare benefits. The indemnity principle inherent in the insurance underwritten by a Club determines that a shipowner member will pay benefits in the first instance and then seek reimbursement, as appropriate, from the Club. The shipowner should therefore consider itself to be the RRE. If uncertainty exists as to the identity of the RRE then the Club should be consulted as soon as possible. 

An entity only has an obligation to report payments to Medicare beneficiaries. The RRE must determine whether a claimant is a Medicare beneficiary. The following (U.S. citizens) are eligible for Medicare: 

Persons aged over 65 

Persons under 65 if: 

  • The individual has applied for Social Security Disability Benefits; 
  • The individual has been denied Social Security Disability Benefits but anticipates appealing that decision; 
  • The individual is in the process of appealing and/or re-filing for Social Security Disability Benefits; 
  • The individual is 62 years and 6 months old (i.e. may be eligible for Medicare based upon his/her age within 30 months); or 
  • The individual has an End Stage Renal Disease (ESRD) condition but does not yet qualify for Medicare based upon ESRD.

A "query access" system will be available on-line to assist an RRE in determining whether an individual qualifies for Medicare benefits

All settlements, awards or other payments by an RRE to a Medicare beneficiary must be reported. This will allow the U.S. government to build a database to match Medicare recipients with those who have received a settlement from a primary payer i.e. an RRE.

If a payee is not a Medicare beneficiary then no obligation to report payments exists.

Practice Tips

File quarterly reports to Medicare detailing all payments made to Medicare beneficiaries. It is essential to identify as soon as possible whether your organisation is the Required Reporting Entity (RRE) in a particular instance.

Only payouts to Medicare beneficiaries must be reported. Determine whether the claimant is a Medicare beneficiary. If uncertain as to whether a claimant is a Medicare beneficiary, query using the "query access" system - this can be accessed by providing CMS (Centers for Medicare and Medicade Services, the body charged with overseeing the system) with the claimant's Social Security number, date of birth and gender. CMS will advise whether the claimant is a Medicare beneficiary.  

All settlements, awards etc must be reported; reporting is not dependant upon liability. 

Location of the incident does not affect reporting requirements; injuries on the high seas or in foreign territorial waters must be reported if the claimant is a Medicare beneficiary. 

The report must include:

  • the claimant's Social Security number;
  • the full amount of the settlement, award etc or any other payment made to the claimant; and
  • other information relating to the payment and the injury/illness sustained. 

Medical expenses that are claimed should be reported even if it is agreed with the claimant that "no medicals" are being paid. 

All payments made to Medicare beneficiaries arising out of mass torts should be included in the reports submitted.  

CMS will only process one query a month however the RRE may enclose details of numerous claimants in any one query. 

Further information is available on the CMS website at: www.cms.gov  

Should further assistance be required Members are asked to contact:

Richard Allen: richard.allen@simsl.com
Paul Brewer: paul.brewer@simsl.com