We have assembled a team of experienced attorneys from our Insurance and Health Care Practices to address the complex issues arising from new federal reporting requirements applicable to liability insurers (including self-insured entities), no-fault and workers compensation insurers, and group health plans under Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) and long-standing obligations under the Medicare Secondary Payer (MSP) statute to reimburse Medicare for conditional payments of medical expenses.
The new regimen requires these insurers and self-insured entities to report electronically, on a quarterly basis, the resolution of most claims for bodily injury or medical expenses brought by Medicare beneficiaries or their representatives. The Section 111 reporting requirements were designed to alert Medicare to potential opportunities to recover payments it has made to Medicare beneficiaries in circumstances in which an insurer had the primary payment obligation under Medicare law. Implementation of the new requirements has been fraught with difficulty, however, because the Centers for Medicare & Medicaid Services (CMS) at the U.S. Department of Health and Human Services (HHS) has stumbled repeatedly in fulfilling its statutory duty to issue guidance for reporting, and because the statutory scheme is based upon inherently flawed assumptions regarding third-party claim settlements and the information actually available to insurers and self-insured entities.
In an era of extraordinary federal budget deficits, actuarial failure in the Medicare program and fundamental changes in the U.S. health care system, casualty insurers, and self-insured businesses face difficult compliance challenges under MMSEA Section 111 and the MSP statute, and the likelihood of substantial disputes with the government regarding Section 111 reporting requirements, alleged violations, and MSP reimbursement obligations. The stakes may be significant, with statutory penalties of $1,000 per day, per claim for Section 111 reporting violations, and potential double damages in government actions to recover unpaid or disputed reimbursement demands. The new reporting and reimbursement regimen will impose increased costs and risks upon insurers, create financial incentives and rewards for Medicare, and introduce operational challenges for both.
Wiley Rein offers its casualty and health care insurer and self-insured clientèle the broad-ranging experience of two national practices—Insurance and Health Care. We therefore can offer entities that must comply with Section 111 a distinctive level of legal expertise. We have one of the largest insurance practices in the country representing a wide range of domestic and international property-casualty insurers and industry organizations in claims, regulatory, and legislative matters of all sorts. And, as our Health Care Practice focuses almost exclusively on the representation of health care insurers and their affiliates doing business with the U.S. government, we understand well the risks and costs that accompany a mandated government reporting system, especially one that threatens significant daily penalties for each failure to report. Because of our experience defending group health carriers against significant MSP reimbursement claims asserted by Medicare, our frequent representation of insurers in a variety of high stakes litigation, and our extensive experience in litigation against the U.S. government, we are ideally suited to assist insurers and self-insured entities in resolving or defending against the penalty enforcement actions and reimbursement claims that are likely to arise as the Section 111 program is implemented.
We assist clients in understanding Section 111 reporting requirements and MSP reimbursement obligations, implementing effective compliance programs, and structuring settlement terms. Our clients that sponsor group health plans already are reporting claims data, and many of our casualty insurer and self-insured clients have registered or will soon be taking that step. As a result, we have assisted both domestic and overseas casualty insurers and group health plans with a wide range of compliance and implementation issues, including:
- Understanding their reporting obligations under Section 111, including the importance of identifying the correct "responsible reporting entity" (RRE) and the unique issues presented by insured risk pools, deductibles, self-insured retentions, excess liability insurance, self-insurance, and mass torts.
- Corresponding with CMS regarding Section 111 implementation issues.
- Collecting required claims data not in their possession through discovery, informal exchanges, and settlement terms compelling disclosure.
- Analyzing the possible extraterritorial reach of Section 111 to overseas carriers.
- Self-reporting implementation challenges, including incorrect or incomplete data transmissions to CMS.
- Monitoring the expanding volume of updated, incomplete, and sometimes inconsistent CMS guidance.
- Addressing the impact of Section 111 and MSP obligations on claims handling, litigation, and settlement.
- Negotiating settlement terms that protect client interests in obtaining the information necessary for Section 111 reporting, allocating responsibility for any reimbursement due Medicare, and avoiding duplicative payment liabilities to the claimant and Medicare.
- Responding to MSP reimbursement demands asserted by the government.
Because of the wide breadth of our practice and client base, we understand the many diverse challenges that our clients face in implementing Section 111 compliance programs. We recognize that one client's solution is not necessarily the answer for another client. We also understand from our years of work with the Medicare program that CMS is not intimately familiar with the casualty insurance industry. We therefore believe that there are opportunities to enter into dialogue with CMS regarding implementation and compliance issues.
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