On February 28, 2014 the Centers for Medicare and Medicaid Services (CMS) published its formal notice of the change in the reporting threshold for liability (including self insurance) settlements, judgments, awards or other payments. The notice follows the recent publication of two Alerts of February 18. Those Alerts announced a potential change in the Mandatory Insurer Reporting obligations of Responsible Reporting Entities pursuant to the changes instituted by the Strengthening Medicare and Repaying Taxpayers (SMART) Act.
In the new notice, CMS has advised that an updated Non-Group Health Plan User Guide, Version 4.2 Chapters I – V, can now be downloaded to incorporate the change in the Medicare, Medicaid and SCHIP Extension Act (MMSEA) necessitated by its February 18 changes and the SMART Act requirements.
CMS has now determined that, for certain liability insurance settlements, judgments, awards or other payments:
- The Current mandatory reporting threshold for liability insurance (including self-insurance) Total Payment Obligation to Claimants is $2000 for settlements, judgments, awards or other payments occurring on or after October 1, 2013.
- For settlements, judgments, awards or other payments exceeding $1000 on or after October 1, 2014, reporting is required no later than the first quarter of January, 2015. This is a change from the previously published threshold amount of $300.
- Error Code CJ07 – where Ongoing Responsibility for Medical has not been accepted and where the settlement, award or judgment amount does not meet the reporting threshold – will still occur on claims submitted with a cumulative TPOC Amount less than $300. It is expected to be changed to coincide with the new $1000 reporting threshold later this year.
As had been discussed in the wake of the February 18 Alerts, questions had been raised regarding the effective date of the changes and the ability of CMS, from a technical standpoint, to implement them. The notice now puts a clear timeframe on the applicability of the change, the settlements to which they apply and the anticipated technical Error Code update.
Gould & Lamb will incorporate the new changes into its Mandatory Insurer Reporting Services program for all settlements that are effected by the change and will also add the appropriate logic to ensure Error Coding is consistent with any CMS update.