Medicare Secondary Payer Today & Tomorrow

1. Medicare Secondary PayerToday & Tomorrow Katie A. Fox, MSCC September, 2009

2. Background • 1980: Medicare Secondary Payer Statute • 42 U.S.C. §1395y(b)2 Enacted to prevent the burden of medical expenses for injury claims from being shifted to Medicare. • Responsible Payment Sources • All other payment forms are Primary • (Workers’ Compensation, Liability etc.) • Medicare benefit is secondary • FEDERALLY MANDATED and supersedes state and local laws.

3. Components of Medicare Compliance • MSP Compliance • Past Consideration – Conditional Payments • A Conditional payment is a payment made by Medicare for medical benefits that relate to another plan, such as liability, workers’ compensation, auto no-fault, or self insured programs. Medicare may issue conditional payments for medical treatment if a primary Payer did not pay, or cannot reasonably be expected to issue payment promptly (defined as 120 days). These payments are made with the condition that Medicare is to be reimbursed for these payments. • Applicable codes and regulations • 42 USC 1395y, et. seq • 42 CFR 411.20, et. Seq • MSP Manual Chapter 7 • CMS User Guide • Future Consideration – Allocation of future care needs • Section 111 Data Interface

4. And If I don’t? • 42 USC 1395 (y)(b)(2)(B) allows the Federal Government to bring an action against “any” responsible party • Double damages plus interest may be collected from the primary payer • CMS may refuse to recognize any settlement contrary to the MSP Act. • Medicare may refuse future benefits to claimant • Private cause of action • $1,000 per day per claim for failure to comply – 7/1/09

5. Medicare Secondary PayerToday & Tomorrow Cont.

6. Section 111 MMSEA • You must • Register with Medicare as a Responsible Reporting entity • www.section111.cms.hhs.gov • Registration window NOW – September 30, 2009 • Designate an Agent • Designate a responsible party to act as your agent for data transmission

7. Section 111 Reporting • What is the requirement • An applicable plan must report the identity of a Medicare beneficiary who’s accident, illness, injury or incident is an issue • Practical – Report if you have a claim for a Medicare beneficiary, and there has been a payment • Practical – Who is a Medicare beneficiary? • The reporting window has been established by the Secretary as one time per quarter within a “reporting window” per Responsible Reporting Entity • Practical – Are you an RRE? • Practical – Who will be your agent?

8. Section 111 Reporting • Timing • 01/01/09 - 06/30/09 Recommended systems development period. • 05/01/09 - 09/30/09 Electronic registration via the COBSW • 07/01/09 - 12/31/09 Testing period • 01/01/10 - 03/31/10 RREs submit their first Section 111 production files • Threshold Errors • 10% or more of the total records are delete transactions • 20% or more of the total records failed with a disposition code of SP – • Errors in the data reported • More than one Claim Input File was submitted during your defined quarter

9. Impact of Section 111 MMSEA • Supply data to Medicare to establish complete coordination of benefits • ORM – Ongoing Responsibility to pay Medical • TPOC – Total Payment Obligation to Claimant • Achieve recovery of funds and prevent funds from being issued in situations where there is primary coverage – What do your settlement agreements say? • Timing? When will a file be “closed” • Practical – Medicare has right of recovery, there is no safe harbor or finality with conditional payments • All other statutes and regulations continue to apply. Mandatory reporting does not replace any other obligations.

10. Best Practices • Register as outlined on the CMS Website • May 1, 2009 – September 30, 2009 • On the COB secure website www.section111.cms.hhs.gov • Coordinate benefits as outlined in all current statutes and regulations • Front end and back end reporting • Obtain conditional payment information before settlement conclusion • Review and dispute unrelated codes to prepare for settlement • Revise standard settlement language • Review and build a data platform to meet the record layout requirements

11. MARC

12. MARC’s Wins • Medicare Query • Achieved Implementation Delay • Data Element Reduction • Assisted with RRE Clarity • Legislative Awareness • Legislative Summit to Align Industry Players • Draft Legislation • Resource for Agency and Congressional Members • Information Clearing House

13. Legislative Climate

14. MARC Coalition Infrastructure

15. Coalition Decision-Making • Policy decisions made at the Board level • Steering Committee manages the strategic policy direction of the Coalition • Consensus process: Decisions made by a “healthy majority” • Open and transparent process of decision-making, reporting back to full Board for approval. • Each member has one vote.

16. Coalition InvolvementJoin or Donate • Membership Open to Any Organization or Individual Affiliated, Interested or Working with MSP statutes. • Two Membership Levels: – Steering Committee - $20,000 annual dues – Member Level - $5,000 annual dues • MARC Donor Giving Program

17. Steering Committee Benefits • Responsible for decision-making related to the Coalition’s operational infrastructure • Has voting privileges • Attends MARC meetings and conference calls • Eligible to hold elected office • Receives all pertinent Coalition mailings and information

18. Partner Level Benefits • Has voting privileges • Attends MARC meetings and conference calls • Receives all pertinent Coalition mailings and information

19. Donor Giving Program • Entities May Donate to Support MARC Advocacy • Various Donor Levels Offered • Acknowledgement of Donor on MARC Web-Site • MARC Donor Giving Program Information and Online Payment Available www.marccoalition.com

20. Get Involved Join/Donate Today Go to www.marccoalition.com for MARC online membership information Or Contact... Susan Murdock, MARC Administrator, susan@murdockinc.com, 703.830.9192