With deadline fast approaching, lack of enforceability presents a unique compliance problem for insurers paying claims to Medicare beneficiaries
In just two short months, property and casualty insurers must start reporting quarterly all liability, no fault, and workers’ compensation claims payments made to a Medicare beneficiary to the Center of Medicare and Medicaid Services (CMS).
To comply, insurers must collect either the Medicare claim number or social security number of the claimant to validate Medicare beneficiary status in the CMS database. Should the claimant choose not to provide this information, the insurer has a problem, The Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA), requires the reporting of information based on these numbers, but does not (and likely could not) have a provision requiring the claimant to provide this information as part of the claim payment process.
So what does an insurer do when a claimant refuses?
On 1st party claims, it is likely that the claimant’s social security is contained in the underwriting file. If not, the cooperation clause within the policy provisions of their contract would generally require the claimant to cooperate in the settlement of any claim. Alternatively, some insurers have modified their contract to explicitly require the providing of any information needed for mandatory reporting.
The real challenge is in 3rd party claims, where the insurer and the claimant are not bound by the contract under which the claim is being paid. MMSEA, though requiring this information for reporting, does not (and likely cannot) compel it from a claimant. In addition, states have not yet enacted legislation requiring this information on liability, no-fault or workers’ compensation claims.
CMS has taken some steps to address the challenge
CMS has issued a model form allowing insurers to ask the claimant for the information and explaining the need for the information. However, the form falls short in that it does not (and likely cannot) require the claimant to provide the information. CMS has advised Medicare beneficiaries that they may be asked to provide this information to insurers to allow for claim payments reporting and the coordination of benefits or recovery of benefits by the Medicare program. However, these steps all fall short of making it mandatory.
Safe Harbor on horizon?
The lack of an enforcement requirement to provide the needed information presents insurers with a unique compliance problem not yet addressed by MMSEA. Though there is some ongoing attempt to modify the reporting requirements to allow for a “safe harbor” for insurers, to date it has not been passed. Until such “safe harbor” provisions are enacted, insurers should consider, at a minimum, amending their claims handling processes and use of the model form as a best practice to show a good faith attempt to obtain the information needed to comply with the Section 111 reporting requirements.
Your thoughts? Have you found any other issues or mechanism to deal with this requirement?
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