Editor’s comment: Last month the Medicare Secondary Payer Enhancement Act of 2010 (MSPEA) was introduced in the U.S. Congress as proposed legislation. It contains some significant changes from the current law, the Medicare Secondary Payer Statute (MSP). Many observers on both sides feel the current Medicare Secondary Payer (MSP) system is inefficient and creates problems for Medicare beneficiaries, the Centers for Medicare and Medicaid Services (CMS), and anyone who settles a claim involving Medicare liability. Proponents of the new law feel the Medicare Secondary Payer Enhancement Act of 2010 (MSPEA) will improve the system to speed the return of funds to the Medicare Trust Fund and promote settlements.
The MSP system was appropriately intended to ensure Medicare and U.S. taxpayers do not pay for health services when another party has primary responsibility – either as a group health plan, workers compensation plan, or other party with liability for the care provided. Unfortunately, current inefficiencies and problems in the system make it nearly impossible for many parties to determine how much is owed to Medicare. If an entity with MSP responsibility disagrees with Medicare’s after-the-fact calculation, it does not even have a process for appealing their decision, regardless of how inappropriate or flighty it might seem.
The MSPEA departs from the current law in several significant ways. First, MSPEA proposes a “final demand” may be obtained prior to any relevant settlement, judgment, award or other payment. The current law only allows a “final demand” to be made after settlement, judgment, award or any final payment.
Additionally, the new law provides if CMS fails to respond in a timely manner, it may absolve the claimant from any liability and obligation to pay. The change is proposed to help shorten the current process and provide more accurate estimates for all parties.
Alternatively, MSPEA also would allow for a “good faith” estimate based upon billing data of the conditional payment amount to be tendered directly to CMS. In response, CMS would be able to challenge the estimate.
The MSPEA proposes an “extended” right of appeal to “the applicable plan involved, or an attorney, agent or third party administrator on behalf of such applicable plan”. MSPEA also proposes a change of wording under Section 111 which currently reads, “shall be subject to a civil money penalty of $1,000 for each day of non-compliance” to “may be subject to a civil monetary penalty of up to $1,000”.
MSPEA proposes exempting claims under $5,000, imposing a 3 year statute of limitations on the U.S. government and discontinues the use of social security and health identification numbers for reporting with CMS.
Keep your eyes on this spot for progress on passage and implementation of the new law. This article was drafted by our intrepid paralegal-soon-to-be-lawyer Nicole R. Zachary and we thank her for her research and hard work.
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