Since the enforcement by federal authorities on July 23, 2001 requiring workers’ compensation settlements to take Medicare "into consideration" when settling future medical, there have been legitimate concerns by the Property & Casualty industry regarding Medicare Secondary Payer (MSP*) compliance. Although The Centers for Medicare and Medicaid Services (CMS*) has not yet enforced review of liability cases, several issues have arisen giving way to the interpretation. During a CMS Conference in June 2004, representatives of the Office of General Counsel of the United States confirmed the intention of CMS to begin enforcing the MSP statute against liability and no-fault cases. A class-action law suit, USA v. Baxter International, centered on defective products resulting in the need for medical care, was resolved in 1995 for $4.2 billion dollars. The office of General Counsel filed suit on behalf of Medicare in 2001 for medical payments made to treat the various conditions of the claimants. In September 2003, the U.S. Court of Appeals remanded the decision and determined that Medicare did have a right to recovery, therefore, the case establishes that the MSP Statute expands to civil litigation. Most recently, on December 29, 2007, the President signed a bill* amending the Social Securities Medicare Secondary Payer Act, adding liability and no-fault settlements into the process. Beginning July 1, 2009, all third party "applicable plans" (defined as: Liability Insurance, including self-insurance, No fault insurance and Workers Compensation laws and plans) must determine Medicare status on all claims and report those to the Secretary of Health and Human Services at the time of a settlement, judgment or award. This will now provide means for Medicare to obtain data and determine if their interests were considered in any finalization of a third party claim. The law specifies the Secretary may also enforce a civil penalty of $1,000.00 per day, per claim, for non-compliance with the new law.

*To review this law, please go to http://www.govtrack.us, S. 2499.

Interpretation? "The intent is to enforce the MSP rights."
Implementation? The Secretary of Health and Human Services is to transfer funds to CMS for the period of fiscal years 2008, 2009 and 2010.
Clarification? Industry anticipates answers within the upcoming months.

Non-compliance can be severe and CMS may: