The time has come to consider the long-term impact of the Medicare Secondary Payer Act on workers’ compensation claims. Five years ago, Medicare reinvigorated its focus on the Secondary Payer Act by imposing reporting requirements under Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007, which first became effective May 1, 2009. Section 111 added mandatory reporting requirements for liability insurers (including entities that self-insure), no-fault insurers and workers’ compensation insurers (nongroup health plan insurers or NGHPs) providing coverage to Medicare beneficiaries. Workers’ compensation insurers, including those employers that self-insure their workers’ compensation exposure, are obligated to notify Medicare about “settlements, judgments, awards or other payment from liability insurers (including self-insurers), no-fault insurers and workers’ compensation” received by or on behalf of Medicare beneficiaries. The Section 111 reporting requirements is an addition to the existing Medicare Secondary Payer law and corresponding regulations.
The Secondary Payer Act describes situations where another insurer has primary payment responsibility for care provided to a Medicare beneficiary or a potential beneficiary. Until 1980, Medicare was a primary payer for covered beneficiaries in almost all cases, except those involving workers’ compensation (and black-lung disease). Starting in 1980, the addition of the Secondary Payer provisions to the Social Security Act required that when the injured party is a Medicare beneficiary, Medicare is always a secondary payer to liability insurance (including self-insurance), no-fault insurance and workers’ compensation. The secondary payer provisions of the Social Security Act were enacted so that insurance carriers and self-insurers could not shift costs to Medicare.
