Saturday, May 2, 2009
The Legal Update from the law firm of Littler Mendelson reports on the new Medical Secondary Payer obligations of employers and insurance companies:
Beginning July 1, 2009, many employers and insurance companies will be required to report claims for workers' compensation claimants that are also Medicare beneficiaries to the Centers for Medicare and Medicaid Services (CMS) and become subject to a $1,000 per day per claimant penalty for failure to comply with this mandatory reporting requirement.
At a time where Medicare is massively under-funded, a new reporting requirement set to take effect on July 1, 2009, will significantly increase Medicare's ability to identify situations in which Medicare is paying for medical expenses that should be borne by so-called "primary payers," including workers' compensation plans.1 By statute, Medicare is a "secondary payer" with respect to medical expenses associated with workplace injuries. As such, if Medicare pays medical expenses on behalf of a Medicare beneficiary who is injured in a work-related accident, Medicare is entitled to reimbursement from the responsible party or insurance carrier for that expenditure. When Medicare makes such payments, the payments are considered to be conditionally paid expenses subject to recovery.
In order to both reduce the amount of medical expenses paid on behalf of Medicare beneficiaries who are properly payable by an employer or insurance carrier and to more completely recapture conditionally paid expenses via the statutory subrogation claim process, Congress amended the Medicare laws to impose a mandatory reporting obligation on workers' compensation plans. The amendments leave the procedure for pursuing subrogation claims unchanged. . . .