Industry Asks HHS for Deadline Extension on Medicare Secondary Payer Reporting

The deadline is fast approaching for insurers to begin new Medicare secondary-payer reporting requirements, and insurance industry groups are urgently requesting an extension.

Insurers need more time before the April 1 implementation of the new rules established under the Medicare, Medicaid, and SCHIP Extension Act of 2007, according to a letter written on behalf of the property/casualty and self-insurance industries to the U.S. Department of Health and Human Services. The letter, addressed to HHS Secretary Kathleen Sebelius, argues that the new reporting system hasn't yet been shown to properly function. The Centers for Medicare and Medicaid Services has not yet provided final reporting parameters to insurers and self-insurers subject to the requirements, said the letter. It was signed by the American Insurance Association, the National Association of Mutual Insurance Companies and the Self-Insurance Institute of America.

"It's giving our companies a lot of heartburn these days," said Marliss McManus, the senior director of federal affairs for NAMIC. She said the process hasn't included a sufficient testing period. "There have been lots of delays because they have been trying to figure out what they want from us."

The AIA had formed a task force after enactment of the new rules, but in two years of trying to help the industry meet the reporting requirements, the system is not yet ready, according to industry representatives. "Since failure to comply with the reporting requirements as of April 1, 2010 will expose insurers and self-insureds to substantial financial penalties, we believe that a more realistic implementation date is not only appropriate but also imperative," the letter contends.

The idea behind MSP reporting is to make sure Medicare is being used as the secondary source of funds for a beneficiary of liability, no-fault or workers' compensation medical payments. The reports will be quarterly, filed electronically to CMS.

McManus said some companies will report via third parties and others have been building internal systems that will allow them to report directly to CMS. If the companies make mistakes, she said, "the penalties are pretty severe" -- as much as $1,000 per day per claim.

"Basically, all we're doing is asking for an extension," she said, adding that a temporary grace period for fees would also help. But until the industry hears back, "our companies are still going off the assumption that they have to have that initial report April 1," McManus said.