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Practice Tip: Medicare Secondary Payer Reporting Requirements Complicate Settlement

By Sarah L. Olson

Since 1980, Medicare has been entitled to recoup funds it has paid conditionally to cover Medicare recipients' health care, where those recipients make claims that are subsequently settled or result in a damage award at trial. 42 U.S.C. ' 1395y(b). Because this statutory entitlement has been largely “honored in the breach,” in 2007 Congress enacted new reporting requirements for entities primarily responsible for the health care costs of injured parties, and imposed hefty civil fines for those who fail to report. 42 U.S.C. ' 1395y(b)(7), (b)(8) (the “Medicare, Medicaid and SCHIP Extension Act of 2007″ or “MMSEA”). This reporting requirement has generated a detailed and cumbersome set of regulations, rules and new requirements for designated Responsible Reporting Entities (“RREs”).

This article explores some of the practical impacts of the
MMSEA on settlement of product liability cases. It does not address the reimbursement process vis-'-vis judgments or claims involving ongoing or future medical treatment, although some of the same principles and procedures apply. The processes described below continue to evolve, as do Medicare's procedures and communications. As a result, and because of its brevity, this outline is necessarily incomplete. Fortunately, guides to handling MMSEA's requirements have been prepared by various bar organizations. A users' manual and computer-based training programs also are available from one of Medicare's Coordination of Benefits Contractors (“COBC”), the Centers for Medicare & Medicaid Services (“CMS”) at www.cms.gov.

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