UBP blog


Starting January 1, there’s a new penalty for failing to report payments to Medicare beneficiaries

Starting January 1, 2010, any Responsible Reporting Entity (RRE) that fails to comply with a new requirement for reporting Medicare payments to Medicare-eligible individuals for resolution of medical expense claims could face a steep penalty–$1,000 per-day the expenses go unreported.

Background on Medicare and reporting requirements:

As many of us know, Medicare is a government-funded health insurance program for individuals ages 65 and up but is not intended to be their primary health insurance (i.e. Medicare should be a “secondary payer”).  In December of 2007, then President Bush signed into law the “Medicare, Medicaid and SCHIP Extension Act of 2007” (MMSEA) to determine when Medicare beneficiaries had received reimbursements for medical expenses which Medicare could recoup.

The act requires an RRE to register with the Centers for Medicare and Medicaid Services (CMS) Coordination of Benefits Contractor (COBC) and electronically file the following information on third-party claims involving payments to Medicare-eligible claimants:

  • Identifying information about the individual (i.e. Social Security Number)
  • The amount paid to the individual to resolve all or part of the claim

The RRE’s payment is called the Total Payment Obligation to Claimant (TPOC).

Why employers need to know about this:

On or after January 1, any employer that is self-insured for all or part of any claim for medical expenses becomes an RRE and is subject to the new reporting requirements. This includes personal injury claims and can include claims for discrimination or harassment.

Employers, if the above applies to you and you employ any Medicare-eligible individuals, take the following 4 steps to help you ensure your compliance and avoid costly fines.

  1. Consult with your insurance carriers and attorneys that handle your insured liability claims. The purpose of this is to make sure everything is in place for you to report all necessary information for TPOC claims made on or after 1/1/2010.
  2. Examine your claims history to see if any demands could be made against your company for personal injury. If there have been, you should register with COBC and begin the process of filing claims information. If there have not been any such claims, you should still keep a watchful eye out for any that come in the future.
  3. If there are any claims pending against you for which you may be required to make a payment, you’ll need to determine whether or not the individual making the claim is a Medicare beneficiary.
  4. Whenever you make a payment to a Medicare-eligible individual settling a claim for personal injury or medical expenses, you’ll need to report all necessary information to COBC promptly.

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