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Mr. Charles G. De Leo, Fowler White Burnett P.A., has provided us with the following information.

As referred to in The Swedish Club Letter No.3 2009, pages 10-11

A recent amendment to U.S. legislation could impose significant obligations on Members to report payment of claims for injury-related medical expenses to the U.S. government. Reporting of payment of liability claims, whether through settlement or otherwise, will soon be required in situations where the claimant is a beneficiary of the U.S. Medicare program. Medicare is a government-run health insurance program enacted to pay certain medical costs for individuals who have become disabled or retired.  In order to avoid potentially large penalties associated with non-compliance with these new reporting requirements, Members must now carefully consider whether individuals receiving payment of injury-related claims are Medicare beneficiaries and if so, what steps are necessary to comply with reporting the claim to the U.S. government.

A recent amendment to the Medicare, Medicaid, and SCHIP Extension Act of 2007 (“MMSEA”) imposes significant new reporting obligations related to payment of liability claims which could potentially involve reimbursement to Medicare. The reporting requirements apply to payments made on or after 1 January 2010, but may relate back to claims on which responsibility for medical payments existed as of 1 July 2009.  The objective of the new reporting requirements is to permit the Center for Medicare and Medicaid Services (“CMS”), the federal agency which administers Medicare and other health related programs, to track the resolution of liability claims involving past and future medical costs that are subject to Medicare, which will assist it in identifying all potential sources of reimbursement for Medicare conditional payments.

Liability insurers and other paying entities deemed to be Responsible Reporting Entities (“RRE”) are required to determine whether a claimant is or might become a Medicare beneficiary and if so, to provide CMS with that individual’s identity and other information such as the amount of any settlement, judgment, award, or other payment regardless of whether or not there has been an admission or determination of liability. This information must be furnished to CMS within a specified time after the claim is resolved which will then assist CMS in the coordination of the individual’s benefits. In keeping with the trend of heightened MSPA enforcement, the MMSEA imposes severe penalties for noncompliance. If an insurer or other RRE fails to notify Medicare in accordance with the new guidelines, a civil penalty of US$1,000 per day will be charged per claimant.

The MMSEA’s new reporting requirements fall upon the entity deemed to be the Responsible Reporting Entity (RRE).  By definition, the RRE is limited to “Applicable Plans” which are defined in the Act as: (i) Liability insurance (including self-insurance), (ii) No fault insurance, and (iii) Workers’ compensation laws or plans. Liability insurance (including self-insurance) is further defined to be coverage that indemnifies, or pays on behalf of the policyholder or self-insured entity, against third-party claims for negligence resulting in injury or illness to an individual. By the express terms of the MMSEA, an RRE may not by contract or otherwise limit its reporting responsibility, though it may contract with a third party administrator or other entity for actual file submissions for reporting purposes. 

Although the full implications of the new reporting requirements are not yet clear, what  is clear is that Members involved in settling claims which may involve conditional Medicare payments must carefully consider whether they are indeed subject to the new registration and reporting requirements.

The Club and our correspondents involved in a particular case will assist and guide you further.


 Member Alert is published by The Swedish Club as a service to members. While the information is believed correct, the Club cannot assume responsibility for completeness or accuracy.