MEDICARE SECONDARY PAYER ACT Mandatory Reporting Requirements

Background Medicare has long established itself as a secondary payer to any other insurance or medical coverage available. New statutory requirement ◦ Self-insured public entities must now comply with statute and report payments. ◦ No exceptions for lack of resources or ability to comply

Statutory Authority Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 Must work with Medicare to evaluate future medical costs before any settlement. Must report payments made to Medicare-eligible claimants to Medicare. ◦ Payments include settlements, judgments, awards, nuisance value payments, ongoing medical treatment, etc. Must document protection of Medicare’s interests in all settlements. ◦ Protects Entity from additional costs if Medicare determines provision for future medical care is insufficient.

Steps for Compliance Registration Process: 1. Entity registers an Authorized Representative ◦ Must have legal authority to bind Entity contracts. ◦ Is ultimately responsible ◦ Designates an Account Manager ◦ City Manager has been selected for this role 2. Account Manager ◦ Performs eligibility queries and submits quarterly reports.  George Hills (TPA) is responsible, Gould & Lamb is the selected Account Manager. ◦ Provides oversight and ensures timely reporting.

Steps for Compliance 3. Profile Report ◦ Authorized Representative must review, execute and return Profile Report to the EDI Representative. ◦ Includes profile details and assigned quarterly reporting period. ◦ Must be reviewed and confirmed annually.  Notices are ed from the EDI Representative to the Authorized Representative (City Manager).

Claim Impact Any claimant receiving medical treatment is potentially included ◦ Medicare beneficiaries AND Medicare-eligible Eligibility is not always obvious. ◦ Determined by sending “query” to Medicare No minimum dollar threshold. ◦ All settlements must document consideration of Medicare’s interests. ◦ Compliance is triggered by payment, regardless of fault ◦ May restrict City’s ability to resolve small claims

Monetary Impact Increased claims cost ◦ Settlement delays could increase litigation activity ◦ Must reimburse Medicare for any payments made (liens) ◦ Funds must be set aside for future medical treatment May need specialized vendor to negotiate liens and set asides with Medicare Failing to report can result in a $1,000 per claim/day fine

Administrative Impact Required to collect sensitive information ◦ Date of Birth and Social Security Number or Medicare Health Insurance Claim Number (HICN) ◦ Must protect personal data to prevent identify theft, ensure privacy and security. Must ensure City is protected with indemnification language in all third-party contracts. Monitor and respond to notices from EDI Representative.

New Claim Process Claim is Filed & Accepted Eligible Not Eligible Determine Medicare Eligibility Identify Medical Liens Evaluate Future Needs Medicare Set Aside/ Allocation Ongoing Payments Report at Settlement Report at start of payments Continue to make payments but do not report Report at Settlement/ Conclusion Not Eligible Settle Claim Eligible Confirm Eligibility Status Negotiate Resolution