New CMS Alert: Liability Settlements Below $1000 Do Not Have to be Reported and CMS Will Not Seek Reimbursement

On February 18, 2014, CMS issued two alerts concerning settlements in liability cases.  The first alert raised the minimum threshold for reporting liability settlements under Section 111 and for determining whether Medicare’s conditional payment claims must be reimbursed.  The threshold was raised from $300 to $1000.  In a second alert issued on the same date, CMS indicated that the new threshold applies immediately to physical trauma-based liability settlements only.  The threshold does not apply to settlements for ingestion, implantation or exposure or to workers’ compensation cases.  CMS stated: "CMS is increasing its current reporting threshold from $300 to $1000.  This new threshold is effective immediately.  This means that physical trauma-based liability settlements of $1000 or less do not need to be reported and recovery of  Medicare’s conditional payment amount from these settlements will not be pursued."  You may find each of these alerts at:

http://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Mandatory-Insurer-Reporting-For-Non-Group-Health-Plans/Downloads/New-Downloads/Computation-of-Annual-Liability-Insurance-Settlement-Reporting-and-Recovery-Threshold.pdf

and

http://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Mandatory-Insurer-Reporting-For-Non-Group-Health-Plans/Downloads/New-Downloads/Alert-Change-in-Reporting-Threshold-for-Certain-Liability-Settlements-Judgments-Awards-or-Other-Payments.pdf

We will continue to stay ahead of developments concerning the Medicare Secondary Payer Act and ensure that you remain informed.  Please contact us if you have questions regarding the most recent CMS alert or any other Medicare Compliance issue.