FAQ’s Regarding the Centers for Medicare and Medicaid Services’ Extension of Section 111 Reporting Requirements

By Kevin M. Miller

Under Section 111 of the MMSEA, insurers and self insurers who settle personal injury claims after October 1, 2010 were required to report those settlements to the Center for Medicare and Medicaid Services (CMS) no later than the first quarter of 2011.  Recently, however, CMS extended those reporting requirements.  Under the latest version of Section 111’s obligations, settlements of personal injury claims reached on or after October 1, 2011 must be reported no later than the first quarter of 2012.

This reporting extension provides some relief to all parties involved in settling claims, including insurers as well as CMS, while everyone is still becoming accustomed to MMSEA’s reporting system.  Yet, while the extension is spelled out clearly, questions still arise.  Here are some of the more frequently asked questions.

Q: Does the reporting extension apply to all settlements of personal injury claims?

A: Not really.  The extensions do apply to the majority of claims which CMS describes as “Total Payment Obligation to Claimant” or TPOCs.  TPOCs are settlements which extinguish the claim once and for all with no possibility of future payments for ongoing medical care.  The extension of Section 111 reporting guidelines does not apply, however, to that type of claim which requires payment of medical bills in the future, described by Medicare as “Ongoing Responsibility for Medicals,” or ORMs.  If the settlement is an ORM, that settlement still must be reported in the first quarter of 2011 where settlement is reached after 2010, October 1.

Q: If reporting requirements under Section 111 are deferred for one year, is it still necessary to protect Medicare’s interest at the time of settlement during the interim?

A: Yes, definitely.  Guidelines for reimbursing Medicare for its superlien from settlement proceeds in compliance with the MSP statute is still in effect.  Penalties for not doing so remain and can be stiff.

Q: What about low dollar settlements?  CMS had designed a reporting scheme which temporarily removed the obligation to report small dollar settlements to allow insurers the opportunity to become accustomed to the reporting system and not be over burdened by reporting requirements in a great number of small-dollar settlements.  Are there any changes to this system?

A: Yes, reporting requirements for small-dollar settlements have also been extended and are as follows:

  • For settlements prior to January 2013, no report is required if the settlement is $5,000 or less.
  • For settlements during 2013, no report is required if the settlement is $2,000 or less.
  • For settlement during 2014, no report is required if the settlement is $600 or less.

In summary, CMS has either responded to the voice of insurers who have been burdened with new Section 111 reporting requirements, or have felt the strain of reporting requirements themselves, in that the reporting guidelines of personal injury settlements has been extended, as outlined above.  Always remember, however: regardless of whether the settlement is reportable yet or not, it is still the obligation of an insurer to protect CMS’s reimbursement rights at the time of settlement.  Quinn Johnston looks forward to working with you in that regard.

Originally published in the Winter 2010 edition of Quinn Quarterly.

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