Beware MMSEA: Are You in Compliance? Bennett L. Pugh Carr, Allison, Pugh, Howard, Oliver, & Sisson

1. Beware MMSEA: Are You in Compliance? Bennett L. Pugh Carr, Allison, Pugh, Howard, Oliver, & Sisson 100 Vestavia Parkway Birmingham, Alabama 35216 (205) 949-2949 bpugh@carrallison.com

2. MMSEA Overview • Medicare, Medicaid, SCHIP Extension Act of 2007 (MMSEA) 42 U.S.C. 1395(y) • Section 111 of the act compels mandatory reporting to Medicare by both Group Health Plans (GHP) and Non-Group Health Plans (NGHP) • SCHIP is the State Children’s Health Insurance Program

3. Two Fold Purpose of Section 111 • Assist Medicare with recovery of conditional payments (CPCs) • Prevent Medicare from paying when a primary payer exists.

4. Provisions • To require GHPs and NGHPs to report to Medicare the existence of any claim involving a Medicare beneficiary • To impose a penalty of $1,000 per day per claim for failure to comply • To delegate to the Secretary of Health and Human Services the duty to adopt regulations to implement the Act

5. Beginning July 1, 2009, “liability insurance including self insurance, no-fault insurance and workers’ compensation laws and plans” must report claims involving a Medicare beneficiary to Medicare when the claim is “resolved (or partially resolved) through a settlement, judgment, award or other payment on or after July 1, 2009.” “Must also report on all claims for which the RRE [responsible reporting entity] still has responsibility for ongoing payments for medical services as of July 1, 2009,” such as open medicals in workers’ compensation claims. Subject to timelines, exceptions and lookback provisions Notification Requirements

6. Notification Requirements: Medicare Beneficiaries • In WC cases with ongoing responsibility for medicals, if payments have been or will be paid after 7/1/09 then the claim is reportable next year even if settled between 7/1/09 and time to report • For most GL and WC cases where no payments are made until date of settlement, the claim is reportable if settled on or after 1/1/10 • Actual reporting starts in 2010 and there are thresholds for small claims

7. Reporting Timeline • Registration for all liability/no-fault/workers’ compensation RREs • July 1, 2009 - Submission of test and production Query Input files begins • January 1, 2010 - March 31, 2010 - Testing for Claim Input files begins • January 1, 2010 – March 31, 2010 - RREs who have completed testing can submit first Claim Input production files during assigned timeframe • April 1, 2010 – June 30, 2010 All RREs are required to begin submitting production files during assigned submission timeframe

8. Penalties • No safe harbors and all plans must comply • $35m from Congress to implement and enforce Section 111 • CMS will hire an “umbrella” contractor to track filings, identify missing reports, and seek payouts