United States: New Reporting Requirements May Impact The Settlement Of Employment-Related Claims

Beginning on January 1, 2011, certain employers and insurers were required to report settlements, judgments or awards, where medical expenses are paid to a Medicare-eligible claimant. The requirement applies to settlements, judgments, or awards established on or after October 1, 2010. In order to comply with these reporting requirements, covered entities will need to register with the Centers for Medicare and Medicaid Services (CMS) as soon as they become aware of a reportable claim.

Mandatory-Reporting Requirements

Medicare provides healthcare benefits to enrolled beneficiaries, including individuals age 65 and over, individuals with certain disabilities, and individuals with end-stage renal disease. Medicare's obligation to pay for these health care benefits is secondary to that of certain primary payers, including group health plans, liability insurance plans (fully and partially insured), workers' compensation plans, and self-insureds.

A new rule adds Medicare Secondary-Payer Mandatory-Reporting Requirements (MSP Requirements) for certain payments made to Medicare-eligible claimants. The purpose of the reporting requirements is to help CMS determine primary versus secondary payment responsibility, and to recover the costs of those medical expenses for which another entity has primary responsibility.

Responsible Reporting Entities

The law requires primary payers to report to CMS: 1) any payments made to a Medicare beneficiary that include or could potentially include medical payments (referred to as Total Payment Obligation to Claimant or TPOC); or 2) the assumption of ongoing responsibility for medical payments (ORM) to a Medicare beneficiary. The primary payers, responsible for making the report to CMS, are referred to as the Responsible Reporting Entities (RREs). RREs are broadly defined as liability insurers (including EPLI, D&O, and professional liability carriers), no-fault insurers, workers' compensation insurers, and self-insureds.

Reporting Requirements

Even if a claim by a Medicare beneficiary does not involve any medical expenses, an RRE must report the payment to CMS if the release includes claims for medical expenses (e.g., a plaintiff's claim for pain, suffering, and emotional distress).

The requirements apply regardless of whether there was a determination of liability and regardless of any allocation made by the parties or the court. However, CMS will normally defer to an allocation made through a jury verdict or after a hearing on the merits.

RREs that fail to comply with the reporting requirements are subject to a civil penalty of $1,000 per day per incident. In addition, if Medicare has to take legal action to recover a payment to which it is entitled, it may recover up to twice the amount it is due.

Compliance Obligations

Insurers and employers who may be RREs must take the following steps:

Determine whether the claimant is a Medicare beneficiary

The determination of whether the claimant is a Medicare beneficiary must be done before any settlement is reached or any payment is made. Medicare beneficiaries consist generally of those age 65 and older and individuals with certain disabilities or end stage renal disease.

Determine if there is a reportable claim

No reporting is required unless the RRE is obligated to make a payment to a Medicare beneficiary:

  • for TPOCs, RREs must report settlements, judgments, awards or other payment, established on or after October 1, 2010, where medical expenses are claimed and/or released;
  • RREs must also report ORMs made on or after January 1, 2010 (this typically applies to no-fault and workers' compensation claims); and
  • minimums – temporary minimum thresholds for reporting apply for the first 3 years (ranging from $5,000 in 2010 to $600 in 2013).

Determine who is the RRE for the reportable claim

Where the employer is self-insured, either fully or partially, and pays the settlement, judgment, or award, then it will ordinarily be regarded as the primary payer and will be the RRE. If the employer has liability insurance (e.g., EPLI, D&O, or professional liability) and the insurer pays the entire settlement, award or judgment, then the insurer – not the employer – is the primary payer and will be the RRE. Where an employer is self-insured for a deductible, but the payment of that deductible is done through the insurer, the insurer is considered the RRE and will be responsible for including the deductible in the amount it reports as a settlement, judgment, award or other payment.

Registering and reporting

The registration (and testing) process with the CMS may take three months. RREs may register at www.Section111.cms.hhs.gov and should do so as soon as possible in order to begin filing on January 1, 2011. An RRE is not required to register if it has nothing to report; however, RREs must register three months before they have a reasonable expectation of having claims to report. RREs must install required software and pass a testing process before sending actual claims data to CMS.

Mandatory quarterly reporting to CMS begins once registered. An RRE can hire an agent to handle its reporting obligations, but the RRE will still be liable for any failure to report.

Our Advice

First, determine whether your company is an RRE and is required to comply with the MSP Reporting Requirements. If your company is not an RRE, consult with your liability carrier to coordinate reporting requirements with the carrier. If the company is an RRE, register with CMS and identify your Authorized Representative and Account Manager as soon as you become aware of a reportable claim. This is necessary in order to give the company time to install the appropriate software and pass the testing process before paying a settlement, judgment, or award. RREs who are currently defending claims by Medicare beneficiaries should register now.

Next, determine if a claimant is Medicare eligible. For example, during the discovery phase of litigation, ask about the claimant's social security number, date of birth, Medicare eligibility, Health Insurance Claim Number (HICN), and authorization to obtain benefit and claims payment information from Medicare.

Finally, include language in the settlement agreement regarding the MSP Reporting Requirements and indemnification language regarding Medicare reimbursement. If there is a Medicare lien, settle with CMS before paying any settlement, award, judgment, or other payment to a Medicare beneficiary.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions