Medicare Secondary Payer Finalized Rules and FAQs
December 20, 2023
Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA Section 111) adds mandatory reporting requirements with respect to Medicare beneficiaries who have coverage under group health plan (GHP) arrangements. Though implementation dates for GHP arrangement information have been in place for several years, on October 11, 2023, the Centers of Medicare Medicaid Services (CMS) finalized regulations specifying when and how it will calculate and impose civil money penalties for violation of the Medicare Secondary Payer (MSP) reporting requirements for GHP and certain non-group health plan arrangements.
As background for group health plans, responsible reporting entities (RREs)-typically insurers or third-party administrators (TPAs)-are required to report information to CMS about individuals who are both entitled to Medicare and covered under a GHP. The reports help CMS determine whether a group health plan is primary to Medicare (that is, whether the plan pays first, while Medicare is the secondary payer).
Administrators of Health Reimbursement Arrangement (HRA) plans are included since HRAs are considered to be a group health plan. Excluding retirees, the reporting applies to any Medicare beneficiary who is active on a GHP and has an annual benefit value of $5,000 or more. Administrators and RREs have one year from October 11, 2023, in which to review the final rule and evaluate their reporting processes to ensure compliance. While relatively few employers are RREs, any employer that sponsors an HRA will need to assist their insurers or TPAs in compiling information about participants in their plans.
The Medicare statute authorizes penalties of $1,000 per day for group health plans that do not comply with the MSP reporting requirements. The final regulations, which take effect December 11, 2023, are not applicable until October 10, 2024. With enforcement activity on the rise and soon to be enhanced by penalty imposition, employers' cooperation will be vital in ensuring RRE compliance.
Please reach out to your account team with questions. FAQs available: