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Client Alert: If You’re Settling a Case or Paying a Judgment, Make Sure You Don’t Pay Twice:Upcoming Deadlines and Mandatory Reporting Requirements Under the Medicare, Medicaid, and SCHIP Extension Act of 2007

August 14, 2009


Your business may be required to report to the federal government payments made in connection with a personal injury or worker’s compensation claim if the claimant receives Medicare benefits in connection with that claim.  Reliance upon claimants or their counsel is insufficient.  Requirements are technical and strict, and non-compliance can be very expensive.

The Medicare, Medicaid, and SCHIP Extension Act of 2007 (“MMSEA”) is designed expressly to enhance enforcement of Medicare’s right of reimbursement out of settlements, judgments, awards or other payments made to Medicare beneficiaries. Organizations such as self-insured businesses, liability insurance carriers, no-fault insurance carriers, worker’s compensation carriers, third-party administrators, and group health plans may be required to make these reports.  If you pay settlements, judgments, awards or other payments to Medicare beneficiaries, this could mean you.

The practical effect is to require those who are considering making a payment to a personal injury claimant – by settlement, judgment, award or other payment:  (1) to determine whether the claimant has received or is entitled to Medicare benefits and, (2) if the claimant is a Medicare beneficiary, to report certain information regarding the payment to Medicare.  The MMSEA is significant in that it shifts substantial responsibility for notifying the federal government of payments made to Medicare beneficiaries.  Civil penalties of up to $1,000 per day, per claim, can be imposed for failure to report promptly the payment or intended payment.  Damages equal to double the payment made to the claimant can also be imposed where the payor releases funds to the claimant and the government is unable to recover the funds from the claimant.

If your business is self-insured, or the claim is within an SIR or deductible, or you are a liability insurance carrier, no-fault insurance carrier, worker’s compensation carrier or third-party administrator, you need to know:

  • The deadlines for compliance with the MMSEA. The first deadline, for registration, is as early as 9/30/09.
  • How to determine whether a claimant is a Medicare beneficiary. 
  • The types of information that your business must report, to whom it must be reported, and sanctions for failure to report.
  • How frequently information should or can be reported.
  • Various “do’s” and “don’ts” and strategies for handling issues to which there are no definitive answers.

For more information regarding the requirements under the MMSEA or on setting up a system or protocol for compliance, or for other assistance, email cdangelo@mmwr.com or call Montgomery McCracken’s Products Liability & Preventive Counseling Group.