A new reporting process that includes workers' compensation and self insurance could be costly for those who are not in compliance. The new requirements are meant to help Medicare identify claimants who have coverage under other forms of insurance and to prevent Medicare payment for treatments covered by these insurers. The reporting process should be implemented this summer, and those caught unaware could face steep fines.

Beneficiaries of Medicare who have health coverage through a group health plan or require medical treatment that is covered by liability insurance (including self insurance), no-fault insurance, or workers' compensation insurance are required to exhaust these forms of coverage before using Medicare. Medicare refers to these types of insurers as Medicare Secondary Payers (MSPs.)

The Medicare Secondary Payer Act will implement new reporting requirements to assure that these MSPs pay their fair share. "CMS (Centers for Medicare & Medicaid Services) wants to ensure that it doesn't pay claims where it is not the primary insurer," says Jill Breard, LWCC Risk Management Services Operations Manager. "Medicare is secondary to all types of insurance except for Medicare supplemental insurance. Over the years, claimants who are also eligible for Medicare and settle their workers' compensation claims, or have claims that are in dispute, will file their medical claims through Medicare." The Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA), Section 111 adds electronic reporting requirements for MSPs. These entities are now responsible for reporting the identity of a Medicare beneficiary whose illness, injury, incident, or accident was at issue to determine an appropriate coordination of benefits as well as any applicable recovery claim.

To this end, Medicare will begin collecting information on claims filed through other forms of insurance by Medicare beneficiaries. The information will be used to prevent Medicare from paying for services where it is not the primary carrier. Medicare will also make conditional payment demands on insurers responsible for expenses paid by Medicare. Reporting requirements exclude claims that were closed on or before January 1, 2009, and claims that were settled on or before July 1, 2009.

These new reporting requirements can be confused with Medicare Set-Aside Arrangements, which allocate a portion of a workers' compensation settlement for future medical expenses. Set-Asides must be submitted to CMS for approval to ensure that Medicare's interests are protected when workers' compensation claims are being settled. Medicare Set-Asides are separated by two classifications. Class I claimants are currently eligible for Medicare and have received a settlement greater than $25,000. Class II claimants will be eligible for Medicare within 2 ½ years and will receive a settlement for the value of a claim that is greater than $250,000. The Set-Aside requirements are a means of collecting funds for future Medicare claims. The new Medicare reporting requirements ensure that Medicare is not billed for items it doesn't cover, as well as identifying payments made in the past and present for medical care that should be reimbursed to Medicare by an MSP.

Getting ready for the new reporting requirements has been no simple task for carriers, as directions for implementation came from CMS on a tight deadline, and the reporting process was not fully established until recently. Insurers must register with coordination of benefits contractors (COBC), who will work with insurers to cull submitted data for the information necessary to determine appropriate payment of Medicare benefits. To meet the new reporting requirements, insurers are working with these COBCs to enhance their systems and electronically capture required data. This reporting process specifically includes self-insured entities that may not have the ability to implement the reporting processes. This may require some self-insured entities to switch to carrier coverage to ensure they have a reporting process in place.

Carriers and agents need to be very clear about this new reporting requirement and its implications when presenting the information to new and existing policyholders. The penalty for noncompliance--not reporting a claimant's information in a correct and timely manner--is $1,000 per day, per claim. The Responsible Reporting Entity (RRE) is subject to the fine. If the policyholder is insured and the claim is being handled or paid by the carrier, then the carrier is the RRE and is subject to the fine. However, if an employer is self-insured or handles and pays its own claims, it can find itself subject to this fine. Members of self-insured funds and other self-insureds that utilize a third-party administrator should also check to make certain the new reporting requirements are followed.

LWCC is ready to meet the requirements of this new reporting process. A query function will be set up to allow insurers to check a claimant's Medicare eligibility before gathering information that is not pertinent to the insurer's claim process. Policyholders will be in compliance with the new Medicare reporting requirements simply by reporting all claims to LWCC in a timely manner. Below are points to help give policyholders a better understanding of this new process:

• A query file has been set up to check Medicare eligibility and will include state RPO (for Reporting Purposes Only) claims for 4 years and 1 day after the claim has been reported. In addition, Longshore RPOs will be included in the query file for an indefinite period of time. RPO claims are closed as soon as they are reported. This time period reflects the assumption that policyholders would not make payments on their own for claims beyond 1 year, plus 3 years and 1 day to cover the prescriptive period for medical on state claims.
• All state claims remain in the query file for 4 years and 1 day. It is imperative that policyholders do not handle claims on their own or make medical payments beyond 1 year after the accident.
• Any payments made by a policyholder on a claim 1 year or more after the accident will cause the claim to fall outside of the parameters LWCC has set up for reporting. This would make the policyholder the paying entity, or RRE (Responsible Reporting Entity). To establish compliance with the new reporting requirements, the policyholder would then be required to register with CMS (Centers for Medicare & Medicaid Services) as an RRE and set up a system for query and quarterly reporting files.

Multi-state claims are not handled by LWCC. Policyholders covered through our multi-state program and/or by any other workers' compensation carriers should contact their carriers for procedures on how to handle the new Medicare reporting requirements.

Policyholders should always submit claim information in a timely manner to their carrier, even for reporting purposes only (RPO). When there is an incident at work that doesn't require medical treatment, or only requires first aid, employers should put LWCC on notice with an RPO in case the injury requires treatment at a later date. The sooner this information is made available, the better. LWCC will use information such as name, date of birth, and Social Security number to query the CMS coordination of benefits contractor for the claimant's Medicare eligibility. Simply reporting an RPO can determine if further information should be gathered from the claimant. "If we find that someone is Medicare-eligible, we need to handle the claim because we have the necessary data feed to do the reporting," says Breard. "If we don't know about the claim, then we can't query it to find out if they are Medicare-eligible and we can't report it properly."

New reporting requirements aside, allowing LWCC to handle all claims has definite benefits. The LWCC claims process is focused on positive outcomes for everyone involved. Using LWCC's claims process allows the injured worker to receive expedited medical treatment and access to LWCC's OMNET network of occupational medicine physicians. Focused on positive outcomes, LWCC will spare no expense caring for the injured worker in order to give that worker every opportunity to return to work as safely and as quickly as possible.