Basic awareness about the Medicare Secondary Payer Act

Medicare Secondary Payer (MSP) act has been changing with time, and the current year is no exception. Introduction of new rules and stricter regulations demand close observation from enrollees as well as health policy professionals so that everyone can stay on top of their game. To help you traverse through all the recent changes, some fundamental facts about this act are being shared below.

What does MSP stand for?

Before the enforcement of MSP, Medicare used to pay for all the medical services and items on behalf of its beneficiaries, excluding those which fell under the realm of workers' compensation. Recipients received coverage from Medicare program despite having other sources that could cover their medical cost. As a consequence, the Medicare Trust Fund started to dwindle faster.  MSP act was brought into place to protect this situation by making it mandatory that Medicare will be the secondary payer if a person has subscribed to any other employer-sponsored health plan.

In the case where Medicare is not the primary or first payer, the individuals and Medicare program can benefit in different ways. For example, on billing a primary payer before Medicare and ensuring coordination, the healthcare providers can attract the right amount of reimbursement.

What is Section 111 - MSP (Medicare) Reporting and Liability?

Section 111 is sometimes used to indicate MMSEA (Medicare, Medicaid, and SCHIP Extension Act of 2007). Under this act, new reporting requirements were imposed concerning Medicare beneficiaries who are covered by a group health plan (GHP), liability insurance, no-fault insurance plan, workers’ compensation, and others. It mandated that whatever awards, settlements, judgments, or other payments were made to the Medicare beneficiaries through any such plan should be reported by the “Responsible Reporting Entities” (RREs) or agents. In this case, an RRE is an applicable plan, such as liability insurance or workers' compensation, which has to follow the rules laid under Section 111. 

The reporting entities or agents have to send online quarterly data to Medicare regarding the latest judgments, awards, or settlements to let the authorities know about the current status of the claim made by an injured party. The report should mention how the claims of the injured parties, who are or were also Medicare beneficiaries, have been addressed or resolved and to what extent. Details of the payment obligation as well as the date of the reporting thresholds should also be incorporated in the report.

What is the penalty for non-compliance with Section 111?

On failing to report a claim within a particular time frame, an RRE may have to face a civil penalty of $1,000.00 per claim a day.

What is Medicare set-aside?

Medicare set-aside is a kind of trust, where settlement proceeds for future medical care for Medicare recipient’s personal injury are kept separately. The amount is paid after taking approval from the government and how much it should be paid is recommended by a specialized company after inspecting the medical care needs of an individual. It is post-settlement money that can be allocated to the Medicare beneficiary based on valid terms and conditions, for example, the proper use of the coverage amount received from the primary sources, etc.

The MSP act is complicated, and you need the guidance of a reputable attorney and health policy professional, such as TD&P Consulting Inc., to understand your standing in the matters of claims for medical coverage.