New CMS Reporting Requirements

The Centers for Medicare and Medicaid Services issues new requirements for insurers and self-insured entities to report settlements, awards and other payments made to Medicare-eligible claimants/plaintiffs.

Medicare Mandatory Reporting

Beginning January 1, 2010, Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) added new mandatory requirements for insurers and self-insured entities to report settlements, awards and other payments made to Medicare-eligible claimants/plaintiffs to the Centers for Medicare and Medicaid Services (CMS). This duty to report also applies to individuals who make such payments on their own behalf without insurance. The failure to report can result in a fine of $1,000 per plaintiff per day, plus double damages, for each day the reporting is late.


Generally, a claimant/plaintiff 65 years old or older is considered Medicare-eligible. However, age alone is not determinative. Persons under 65 years of age are likely to be enrolled in Medicare upon applying for Social Security Disability benefits or if the individual is on kidney dialysis or happens to be a kidney transplant patient. Finally, even though the claimant/ plaintiff may not be a Medicare beneficiary at the time the claim is initially brought, the claimant/plaintiff’s status should be rechecked at the time of the actual settlement as the claimant/ plaintiff may have become eligible for Medicare during the pendency of the claim.

Significance of New Reporting Requirement

The new reporting requirement is significant not only because of the penalties that can be assessed, but also the fact that CMS will now know of every settlement involving a Medicare-eligible beneficiary. This is of practical significance because it enables CMS to pursue collection from parties having primary payment responsibility under the Medicare Secondary Payer Act. The Medicare Secondary Payer statute, 42 U.S.C. § 1395y(b), provides that when Medicare makes a payment that a primary plan was obligated to make, the payment is only conditional and Medicare is entitled to reimbursement. Therefore, when a Medicare beneficiary settles a liability, no-fault or workers’ compensation claim, or is awarded a judgment in court, the beneficiary has a duty to promptly reimburse Medicare for any medical expenses Medicare paid that were recovered by the beneficiary.

Although the Medicare beneficiary has a duty to reimburse Medicare out of the proceeds of any settlement or judgment he/she receives, CMS has, for many years, had the right to recover its reimbursable payments from the primary payer even though the primary payer has already settled with the beneficiary. “Primary payer” in this context refers to the payer of the liability, no-fault, or workers’ compensation claim. While CMS’s rights in this regard are not new — only the paid-claim reporting law is new — there is now greater awareness of these rights due to the new mandatory reporting requirement.

Who Is Responsible for Reporting?

Under MMSEA, Responsible Reporting Entities (RRE), including liability insurance plans, Group Health Plans, no fault insurance plans and workers’ compensation plans, are required to directly report all potentially eligible claimant/plaintiffs to CMS. For physicians covered by a medical professional liability insurer, the professional liability insurer will most likely be the RRE unless the physician pays the claim outside of his or her insurance. If the physician decides to pay the settlement amount without going through his or her insurance carrier (typically done in order to avoid a report to the National Practitioners Data Bank), the physician must nevertheless report the payment to CMS in the same manner as would be required by his or her liability carrier. In that case, the physician’s defense attorney should inform the physician about the Section 111 reporting requirement.

Stan T. Ingram and Pamela S. Ratliff are attorneys with Robinson, Biggs, Ingram, Solop & Farris, PLLC. If you have any health care questions regarding practice issues, hospital or medical staff matters, licensure, administrative or regulatory matters, health care entity formation, medical malpractice defense or patient privacy laws, please contact them at (601) 713-1192, or e-mail them at or

MD News February 2010



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