18 Journal of American Law // Spring 2015
any group health insurer, workers' compensation insurer, no-
fault insurer, or liability insurer. Tus, all types of insurers that
provide payment for personal injury or illness are considered
primary payers to Medicare. Moreover, liability insurers and
self-insured entities, including auto liability insurers, unin-
sured and underinsured motorist insurers, homeowners' lia-
bility insurers, malpractice insurers, product liability insurers,
and general casualty insurers, are primary to Medicare.
Under Section 111, the responsible reporting entities were
obligated to report the identity of the Medicare benefciary as
well as the health insurance claim number (HICN) and/or So-
cial Security number (SSN) to CMS to make a determination
concerning coordination of benefts, including any applicable
recovery of claim.
13
Section 111 did not require submission of
both the HICN and SSN, but it is commonly recognized that
submission of both numbers assists in properly locating the
Medicare benefciary in the system. In addition to the ben-
efciary's name, HICN, and SSN, the RREs were required to
submit the date of birth and gender of the individual.
14
Under Section 111, if a claimant was entitled to Medicare
benefts, the reporting entity was obligated to report informa-
tion about the claim and claimant to Medicare once the claim
was resolved. Section 111 provided that parties had 60 days
afer the claim was resolved to reimburse Medicare.
15
Section 111 mandated that the RRE, prior to paying an
award, judgment, or settlement, must determine if the claim-
ant was a Medicare benefciary and report any award that ex-
ceeded certain dollar thresholds, which decreased over time.
According to Section 111, the thresholds and the dates of ap-
plicability for mandatory reporting were as follows:
13
Centers for Medicare and Medicaid Services, MMSEA Section
111 Liability Insurance (Including Self-Insurance) No-Fault Insur-
ance, and Workers' Compensation User Guide: Introduction and
Overview, V4.5, 6-1 (Feb. 2, 2014), http://www.cms.gov/Medicare/
Coordination-of-Benefts-and-Recovery/Mandatory-Insurer-Re-
porting-For-Non-Group-Health-Plans/Downloads/New-Down-
loads/NGHPUserGuideVer45Ch1IntroAndOverview.pdf
14
Id.
15
Id. at 4-1
MMSEA Section 111: Mandatory Total Payment Obligation
to Claimant (TPOC) Tresholds for Liability Insurance (in-
cluding Self-Insurance)
16
Amount Paid On or Afer
$100,000 10/01/2011
$50,000 04/01/2012
$25,000 07/01/2012
$5,000 10/01/2012
$2,000 10/01/2013
$300 10/01/2014
the SmARt Act
Although Section 111 was implemented to establish a mech-
anism for Medicare to be reimbursed for medical costs and
expenses incurred as a secondary payer that should have been
incurred by a primary payer, signifcant delays also resulted
from the confusion regarding Medicare's recovery process.
To reduce these delays, the MSP was amended again with the
enactment of the Medicare IVIG Access and Strengthening
Medicare and Repaying Taxpayers Act of 2012 (known as the
SMART Act). Te SMART Act, signed into law on Jan. 10,
2013, by President Obama, made signifcant modifcations to
the MSP for the purpose of reducing the delays.
Establishing Conditional Payment Status Prior to
Settlement
Prior to the SMART Act, Medicare did not issue a fnal de-
mand for reimbursement of conditional payments tendered
on behalf of a Medicare benefciary until the fnalization of the
settlement, judgment, award, or other payment. Uncertainty
regarding the fnal amount of Medicare's claim for reimburse-
ment ofen afected settlements involving the Medicare bene-
fciaries. Tus, Section 201 of the SMART Act was enacted to
establish a process for determining the amount of Medicare's
reimbursement claim before the liability claim is resolved. Te
SMART Act modifed the Medicare reporting requirements
and allowed parties to report a settlement to applicable agen-
cies prior to the fnalization of the settlement. Te act allows
parties to request the conditional payment reimbursement
amount beginning 120 days before a reasonably expected date
of settlement so the parties can obtain a fnal demand from
Medicare prior to settlement. Medicare then has 65 days from
the request for conditional payment to respond and post con-
ditional payments on its website.
16
Centers for Medicare and Medicaid Services, MMSEA Section
111 Liability Insurance (Including Self-Insurance) No-Fault Insur-
ance, and Workers' Compensation User Guide: Interim Reporting
Tresholds, V3.4, 10 (Jan. 13, 2014), http://www.cms.gov/Medi-
care/Coordination-of-Benefts-and-Recovery/Mandatory-Insur-
er-Reporting-For-Non-Group-Health-Plans/NGHP-Training-Ma-
terial/Downloads/Interim-Reporting-Tresholds.pdf