Beginning July 1, 2009, the new Medicare, Medicaid, and SCHIP Extension Act of 2007 requires liability insurers, including self-insurers, no-fault insurers and workers’ compensation insurers, to:
- Determine Medicare/Medicaid status for all claimants; and
- Report to the Centers for Medicare and Medicaid Services (“CMS”), the federal administrative agency responsible for administering Medicare and Medicaid, when those claims are resolved.
This means a duty falls to an alleged tortfeasor’s insurance carrier or the tortfeasor if self-insured to determine whether the plaintiff is on Medicare and to report to the appropriate agency in the event resolution of the tort claim is being sought. The Secretary of Health and Human Services then will coordinate the Medicare benefits for the claimants. The information must be timely submitted after the claim is resolved through settlement, judgment or award of other payment. The requirements concerning when and what information is to be submitted to the Secretary will be later determined by the CMS. Whether liability is determined or admitted does not impact the reporting requirement. Failure to comply with the Act’s notification requirements may result in a civil penalty of $1,000 per day per claimant. This penalty is distinct from Medicare’s current statutory right to collect 100 percent of conditional payments to the Medicare beneficiary – that right of recovery stands against the tortfeasor or its carrier regardless of whether the claimant has received the full settlement funds. Thus, this right to recover should be considered in any settlement agreement and before transferring any funds. Until the rulemaking is completed, many unanswered questions about the implementation of this provision remain, including what information must be submitted to the Secretary and within what timeframe it must be submitted to comply with the Act. We will continue to update any new developments concerning the Medicare, Medicaid, and SCHIP Extension Act of 2007 once regulations are promulgated.
For more information, please contact Denny Brown at (404) 633-9230.