Alyssa Lane
Medicaid is a federal-state program that provides health insurance to eligible low-income individuals. Eligibility for the program is contingent on income and assets, and a sudden increase in income or assets can disqualify a person from continuing to receive Medicaid coverage. Certain employers and insurers are required to report settlements, judgments, or awards where medical expenses are paid to a Medicare-eligible claimant. This has raised questions about whether receiving a personal injury settlement can impact an individual's Medicaid eligibility. While a personal injury settlement does not automatically disqualify an individual from Medicaid, it can be classified as resources or income that affects eligibility. As such, it is important for individuals to understand the potential impact of a settlement on their Medicaid coverage and to seek legal advice to protect their interests and benefits.
| Characteristics | Values |
|---|---|
| Insurers required to report settlements | Insurers and employers are required to report settlements, judgments, or awards, where medical expenses are paid to a Medicare-eligible claimant. |
| When to report | The requirement applies to settlements, judgments, or awards established on or after October 1, 2010. |
| Who to report to | Insurers must register with the Centers for Medicare and Medicaid Services (CMS) as soon as they become aware of a reportable claim. |
| Who is exempt from reporting? | Insurers who are not RREs should consult with their liability carrier to coordinate reporting requirements. |
| Penalties for non-compliance | RREs that fail to comply with the reporting requirements are subject to a civil penalty of $1,000 per day per incident. |
| Impact of personal injury settlements on Medicaid eligibility | A personal injury settlement may be considered income or countable assets, which can affect Medicaid eligibility if it pushes an individual's resources above the threshold. |
| Strategies to protect Medicaid eligibility | Individuals can seek legal advice and planning, advocacy and negotiation, and structured settlements to minimize the impact of a personal injury settlement on their Medicaid eligibility. |
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What You'll Learn
- Insurers must report settlements to CMS if medical expenses are paid to a Medicare-eligible claimant
- Insurers must determine whether the claimant is a Medicare beneficiary before paying a settlement
- Insurers must register with CMS as soon as they become aware of a reportable claim
- Insurers must report settlements, judgments, or awards established on or after October 1, 2010
- Insurers who fail to comply with reporting requirements are subject to a civil penalty
Insurers must report settlements to CMS if medical expenses are paid to a Medicare-eligible claimant
Insurers must report settlements to the Centers for Medicare and Medicaid Services (CMS) if medical expenses are paid to a Medicare-eligible claimant. This requirement came into effect on January 1, 2011, and applies to settlements, judgments, or awards established on or after October 1, 2010. The purpose of this reporting is to enable CMS to make appropriate payments for Medicare-covered items and services provided to Medicare beneficiaries.
The reporting requirement falls under Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA), which added mandatory reporting obligations for Medicare beneficiaries who receive settlements, judgments, awards, or other payments from specific insurance types, collectively referred to as Non-Group Health Plan (NGHP) insurance. These insurance types include liability insurance (including self-insurance), no-fault insurance, and workers' compensation. Organizations that must report under Section 111 are referred to as Responsible Reporting Entities (RREs), which include liability insurers, no-fault insurers, and workers' compensation plans and insurers.
To comply with the reporting requirements, RREs must first determine whether the claimant is a Medicare beneficiary. This determination must be made before any settlement is reached or payment is made. Medicare beneficiaries generally consist of individuals aged 65 and older and people with certain disabilities or end-stage renal disease. Once a claimant is identified as Medicare-eligible, RREs must report settlements, judgments, awards, or other payments where medical expenses are claimed and/or released.
Failure to comply with these reporting requirements can result in significant consequences. RREs that do not comply are subject to a civil penalty of $1,000 per day per incident. Additionally, if Medicare is forced to take legal action to recover payments owed to it, it may recover up to twice the amount originally due. Therefore, it is crucial for insurers to understand and adhere to the reporting requirements outlined by CMS.
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Insurers must determine whether the claimant is a Medicare beneficiary before paying a settlement
The Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) added mandatory reporting requirements with respect to Medicare beneficiaries who receive settlements, judgments, awards, or other payments from liability insurance, no-fault insurance, or workers' compensation. These requirements apply to both fully and partially insured liability insurance plans.
If the claimant is a Medicare beneficiary, the insurer must report the settlement to the Centers for Medicare and Medicaid Services (CMS) as soon as they become aware of a reportable claim. This reporting requirement applies to settlements, judgments, or awards established on or after October 1, 2010, where medical expenses are claimed and/or released. The insurer must also report the assumption of ongoing responsibility for medical payments (ORM) to a Medicare beneficiary, even if the claim does not involve any medical expenses.
It is important to note that Medicare beneficiaries consist generally of individuals age 65 and older, individuals with certain disabilities, and individuals with end-stage renal disease. By confirming the claimant's Medicare eligibility before finalizing any settlement, insurers can ensure they are meeting their legal obligations and avoiding potential penalties.
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Insurers must register with CMS as soon as they become aware of a reportable claim
The Centers for Medicare and Medicaid Services (CMS) has certain reporting requirements that insurers must comply with. These requirements are outlined in the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA), specifically in Section 111 of the act. This section mandates that certain employers and insurers report settlements, judgments, or awards where medical expenses are paid to a Medicare-eligible claimant. This requirement has been in place since January 1, 2011, for settlements, judgments, or awards established on or after October 1, 2010.
Insurers must determine if they are considered a Responsible Reporting Entity (RRE) and are therefore required to comply with the reporting requirements. If an insurer is an RRE, they must register with CMS and identify their Authorized Representative and Account Manager as soon as they become aware of a reportable claim. This early registration is necessary to allow the insurer time to install the appropriate software and pass the testing process before paying any settlement, judgment, or award.
The registration process involves notifying CMS of the RRE's intent to report data and comply with the requirements of Section 111 of the MMSEA. RREs must register on the Section 111 COB Secure Website (COBSW), which is an interactive web portal that allows RREs to maintain account information, monitor file processing, and directly enter claim information. The NGHP User Guide and the "How to Get Started" download provide detailed instructions on the registration process.
RREs that fail to comply with the reporting requirements are subject to civil penalties of up to $1,000 per day per incident. Additionally, if Medicare is forced to take legal action to recover payments, it may recover up to twice the amount it is owed. To avoid these penalties, insurers must ensure they are properly registered and are reporting all settlements, judgments, or awards that meet the criteria outlined by CMS.
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Insurers must report settlements, judgments, or awards established on or after October 1, 2010
The Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) added mandatory reporting requirements for insurers with respect to Medicare beneficiaries who receive settlements, judgments, awards, or other payments from liability insurance, including self-insurance, no-fault insurance, or workers' compensation. These requirements are known as the Mandatory Insurer Reporting (MIR) provisions.
Beginning on January 1, 2011, certain employers and insurers were required to report settlements, judgments, or awards where medical expenses were paid to a Medicare-eligible claimant. This requirement applied to settlements, judgments, or awards established on or after October 1, 2010. To comply with these reporting requirements, covered entities must register with the Centers for Medicare and Medicaid Services (CMS) as soon as they become aware of a reportable claim.
The purpose of these reporting requirements is to enable CMS to make appropriate payments for Medicare-covered items and services furnished to Medicare beneficiaries. By reporting applicable liability insurance, no-fault insurance, and workers' compensation claim information, insurers help CMS determine when other insurance coverage is responsible for payment. This ensures that Medicare does not make payments that should be covered by other insurers.
Insurers who fail to comply with the reporting requirements may face civil penalties of up to $1,000 per day per incident. Additionally, if Medicare is forced to take legal action to recover payments it is entitled to, it may recover up to twice the amount owed. Therefore, it is crucial for insurers to determine whether the claimant is a Medicare beneficiary before reaching any settlement or making any payments.
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Insurers who fail to comply with reporting requirements are subject to a civil penalty
Since 2007, insurers have been required to report settlements, judgments, awards, or other payments that resolve personal injury claims with Medicare beneficiaries. This requirement was implemented to support the Medicare Secondary Payer (MSP) statute enacted in 1981 and facilitate Medicare reimbursement when appropriate. The Medicare, Medicaid, and SCHIP Extension Act (MMSEA) of 2007 imposed significant mandatory monetary penalties for failing to report when required. Insurers and employers who fail to comply with these reporting requirements are subject to civil penalties.
The Centers for Medicare and Medicaid Services (CMS) recently released regulations on civil monetary penalties (CMPs) that will be imposed when entities fail to meet their reporting obligations. These penalties serve as a consequence for non-compliance and a deterrent for future instances of non-compliance. To avoid CMPs, Medicare Secondary Payers should report claims data to CMS in a timely, accurate, and complete manner. Best practices to ensure compliance include establishing a comprehensive claims resolution process that incorporates identifying claimants who are Medicare beneficiaries.
Responsible Reporting Entities (RREs) that fail to comply with the reporting requirements are subject to a civil penalty of $1,000 per day per incident. In addition, if Medicare has to take legal action to recover a payment it is entitled to, it may recover up to twice the amount owed. RREs are organizations that include liability insurers, no-fault insurers, and workers' compensation plans and insurers. They may also be organizations that are self-insured with respect to liability insurance, no-fault insurance, and workers' compensation.
To comply with the reporting requirements, covered entities, including certain employers and insurers, must register with CMS as soon as they become aware of a reportable claim. This registration process allows time for installing the appropriate software and passing the testing process before paying any settlements, judgments, or awards. The determination of whether the claimant is a Medicare beneficiary must be done before any settlement is reached or any payment is made.
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Frequently asked questions
Insurers are required to report settlements, judgments, or awards to Medicaid where medical expenses are paid to a Medicare-eligible claimant. This requirement applies to settlements made on or after October 1, 2010.
A personal injury settlement may be classified as income or resources that can affect your Medicaid eligibility. If the settlement amount pushes your income above the threshold, you may lose your Medicaid benefits. Therefore, it is important to consult a lawyer to understand how a settlement might impact your Medicaid coverage and develop strategies to protect your benefits.
To maintain your Medicaid benefits, you can consider the following strategies:
- Set up a structured settlement: Instead of receiving a lump sum payment, you can arrange for the settlement funds to be paid over several years. This can help avoid the income and resource issues associated with a lump sum payment.
- Proper documentation and allocation of funds: By properly documenting and allocating the settlement funds towards past and future medical expenses, you may be able to exclude them from countable assets used to determine Medicaid eligibility.
- Negotiation with Medicaid: An attorney can negotiate with Medicaid to reduce the amount they claim or even waive the lien.
