Penalty Guidelines Issued for Medicare Secondary Payer “MMSEA” Reporting

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After years of review the federal government has issued proposed regulations for assessing Medicare Secondary Payer (MSP) reporting penalties.  Also referred to as MMSEA or Section 111 reporting, the MSP reporting process requires defendants to report certain settlements with Medicare beneficiaries to the federal government or face $1,000 per day penalties. The proposed regulations reflect the federal government’s renewed attention to and enforcement of the MSP reporting rules.

The Medicare, Medicaid and SCHIP Extension Act (“MMSEA”) requires defendants and healthcare providers to report certain settlements with Medicare beneficiaries. The MMSEA statute includes a $1,000 per day, per claim penalty for inaccurate or untimely reporting. The draft regulations issued on February 18, 2020 propose guidelines for how and when to assess these penalties. Notably, the federal government’s comments to the proposed regulations explicitly warn of enhanced monitoring of MSP processes. Defendants subject to these reporting requirements should take the steps now to update and formalize their MSP compliance program, including MMSEA reporting processes.

The proposed regulations address topics related to the Section 111 reporting penalties, including:

  • Situations in which reporting penalties may be assessed, such as late reporting, inaccurate reporting, or reports which contradict previously submitted information
  • Penalty amounts, including annual adjustments
  • Compliance safe harbors
  • Error thresholds for penalty assessment
  • Penalty notification processes
  • Appeal rights and procedures
  • Statute of limitations considerations

Comments to the proposed rules are due by April 20, 2020.  The federal government will issue final regulations following a comment period.  A copy of the proposed regulations can be found at this link:  https://federalregister.gov/d/2020-03069

The MMSEA settlement reporting obligations are part of the larger MSP “Medicare lien” recovery process. The federal government uses the data collected from the Section 111 reports to identify settlements with potential Medicare liens, pursue lien recovery/reimbursement, and stop Medicare payments where another entity is responsible for payment. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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