CMS Issues Alert Updating and Clarifying Mandatory Reporting Thresholds for Certain Liability Insurance Settlements, Judgments, Awards or Other Payments

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On December 12, 2016, CMS issued a Technical Alert that announced a change in reporting requirements for several different types of settlements with total payment obligation to claimant (TPOC) dates on or after January 1, 2017 and no ongoing responsibility for medicals (ORM). In the Technical Alert, CMS lowered the mandatory reporting threshold for all liability insurance settlements, including mass tort settlements (those involving ingestion, implantation or exposure), from $1000 to $750. The Technical Alert resolves issues that arose following CMS’s November 15, 2016 Alert in which CMS announced that, beginning January 1, 2017, the single threshold recovery amount for physical trauma-based liability insurance settlements would be reduced from $1000 to $750. To that end, CMS announced that the thresholds in the Technical Alert supersede, “the applicable language in the Section 111 Medicare Secondary Payer Mandatory Reporting Liability Insurance (Including Self-Insurance), No-Fault Insurance, and Workers’ Compensation User Guide (Version 5.1),” dated October 10, 2016. The October NGHP User Guide instructions had set the mandatory reporting threshold for liability insurance (including self-insurance) settlements at $1000.

SMART Act Single Threshold Amount -

When a Medicare beneficiary receives a liability insurance (including selfinsurance) settlement, the Medicare Trust Fund may, by statute recover conditional payments it made for medical care related to the settlement. In addition, Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) requires that these settlements be reported to Medicare so that it can recover any conditional payments for treatment related to the settlement. The amount that Medicare recovers from a settlement for conditional payments related to that settlement is reduced by attorney fees and costs associated with the settlement.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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