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5/5/2015 By Christopher Monahan

Do you remember where you were on December 5, 1980? Were you even born yet?

It may seem like any other day in history, but in the context of Medicare reporting, it’s significant. It was the day that the Medicare Secondary Payer Act (MSP) went into effect. The MSP provision stated that Medicare was a secondary payer, rather than a primary payer, and needed to be reimbursed in the event that a plaintiff received an award, judgment or settlement from another entity after medical expenses were initially paid for by the Medicare program.

As a result, December 5, 1980, is the date that Responsible Reporting Entities (RREs) must consider when deciding to report or not report a claim to Medicare.

Pivotal Policy Alerts

In 2007, Congress passed Section 111 of the Medicare, Medicaid and SCHIP Extension Act (MMSEA).  The act created additional reporting requirements and was designed to assist Medicare in reimbursement efforts due to inconsistent reporting over the years. In September 2011 and August 2014, the Centers for Medicare and Medicaid (CMS) released policy alerts after determining there was an exception to these new reporting guidelines. Because the MSP provision did not go into effect until December 5, 1980, CMS determined it would not need to be reimbursed in cases where the exposure did not continue on or after that date.

According to CMS: “As a matter of policy, Medicare does not assert an MSP liability insurance-based recovery claim against settlements, judgments, awards, or other payments where the date of incident (DOI) occurred before December 5, 1980.”

According to the last alert from CMS, there are three criteria that must be met to exclude a claim from being reported:

  1. Exposure ended before December 5, 1980.
  2. The most recent version of a complaint or amended complaint does not claim exposure on or after December 5, 1980.
  3. There is no release alleging exposure after December 5, 1980, or there is a broad general release, which effectively releases exposure after December 5, 1980.
When DOI Gets Tricky

While the cut-off date is clear, the decision of whether or not exposure ended before December 5, 1980, can be subjective — and could lead to compliance issues.

Example 1:

Let’s say you have a claimant who was exposed to an asbestos product at a particular factory. The claimant stopped working at the factory on December 1, 1980, and never returned. This example seems pretty straightforward that the exposure ended before December 5, 1980.

But let’s say that same claimant goes back to that same factory on December 8, 1980, to pick up a bag of his belongings. He was in the factory for less than two minutes. Although his employment terminated on December 1, 1980, did his exposure end before December 5, 1980? Does two minutes of walking through the factory qualify as exposure?

Example 2:

Often in a complaint, the claimant will not specifically state the years of exposure to each defendant’s product, but rather will allege the same exposure period for all defendants covering 30+ years. Maybe they allege employment spanned from 1960 to 1990, and they were exposed to each defendant’s product during those years. Then later, during discovery of the claim, the claimant states that they only used Defendant A’s product from 1965 to 1970. Would Defendant A have to report to Medicare? According to the second criteria above, if the most recent version of the complaint alleged the general exposure years from 1960 to 1990 (and was never amended with specific exposure date, per defendant), then even though the claimant admitted to not using Defendant A’s product post-December 5, 1980, this claim would still need to be reported to Medicare.

Do you interpret that criteria or the general concept of the December 5, 1980, exception differently?

The examples above illustrate just a few possibilities of how the cut-off date of December 5, 1980, could be interpreted in different situations. Certainly a claimant would prefer not to have to reimburse Medicare for previous expenses, but is there always a clear answer of whether or not they should, based on exposure history? Maybe yes, maybe no. What do you think?

What happens if a Medicare beneficiary fails to report to Medicare, or if they attempt to alter exposure dates on purpose to prevent having to report? Check back in a few weeks as we discuss the potential consequences and the False Claims Act.

Want to learn more about the MSP process? KCIC has written previously about passage and implementation of the Strengthening Medicare and Repaying Taxpayers (SMART) Act.

Christopher Monahan

About Christopher Monahan

Chris Monahan leads KCIC’s Chicago office, handling both business development and marketing responsibilities as well as claims management and analysis for new and existing clients.

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