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As part of newly enacted legislation to address Medicare physician reimbursements and SCHIP funding (the "Medicare, Medicaid, and SCHIP Extension Act of 2007"), Congress has approved new reporting requirements for insurers, including medical liability insurers. The bill (S. 2499), was first introduced on December 18th and was approved by both the House and Senate on December 19th, leaving little time for debate or discussion.

Reporting Requirements

The provision in question (Sect. 111, subsect. 8 of S. 2499) is intended to help Medicare officials better determine when beneficiaries have access to funds which have been or could be used to provide benefits otherwise provided by Medicare. With this information, Medicare could subrogate claims to obtain reimbursement for benefits already paid, or could deny payment in circumstances where primary payers or third parties will be making such payments. The savings thus generated would be used to offset the expense of maintaining or increasing physician reimbursements under the program.

The tricky part comes in the vagueness of the new legislation. The provision requires "applicable plans" (defined as liability insurance, self-insurance, no fault insurance and workers compensation laws or plans) to report to the U.S. Secretary of Health and Human Services the identity of any claimant who is entitled to Medicare benefits. [Similar requirements are also being placed on health insurers under a separate provision within the bill.] The exact reporting requirements, however, including the timing of such reports, are to be determined by the Secretary at a later date through the federal rulemaking process. Failure to report the appropriate information could result in fines of up to $1,000 per day per unreported claimant. Fortunately, the requirements will not become effective before July 1, 2009, and therefore insurers are in no immediate danger of facing reporting penalties.

PIAA Analysis

The new provision has the potential to be onerous for medical liability insurers, and could complicate claims involving Medicare beneficiaries. Because the legislation was rushed to a vote so quickly, however, it is not clear if Members of Congress fully understood the possible effect of the reporting requirement, and may have instead only focused on its potential cost-savings for Medicare.

PIAA Position

The PIAA believes the ramifications of the new reporting requirements need to be better understood by Congress before federal rules are promulgated. As such, the PIAA will be reaching out to Members of Congress to seek adjustments/clarifications in the recently passed language. Another Medicare reimbursement bill must be completed within six months, and this may provide an opportunity for corrections to be made as part of that legislation. In addition, the PIAA will be actively involved in the federal rulemaking process to limit any negative ramifications should legislative changes not be enacted.

For more information, please feel free to contact Mike Stinson, Director of Government Relations, at mstinson@piaa.us or Mike Kalutkiewicz, Government Relations Representative, at michaelk@piaa.us.

To read more about the bill, including its full text, go to http://thomas.loc.gov/cgi-bin/bdquery/z?d110:s.02499: