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Dreaded Medicare Set-aside Agreement Memo From CMS


CMS and Dreaded Medicare Set-Aside Agreement Memo

What are the CMS and the dreaded medicare set-aside agreement memo effect on workers compensation? On July 1, 2009 the Center for Medicaid/Medicare Services (CMS) issued an innocuous-looking memo that will likely result in sanctions by the Federal Government and many lawsuits. In fact, a landmark Alabama lawsuit had been filed concerning an employee that was turned away by the CMS.

Badge Of dreaded medicare set aside agreement memo With Icon Inside

The carrier/TPA should have properly filed a Medicare Set-aside arrangement (MSA). The carrier did not file the MSA. A large number of future lawsuits can be expected, especially on closed Workers Comp files where no MSA’s were filed.

Check on my next post to see what all of this means to employers, TPA’s, and carriers. The letter issued on July 1, 2009 is as follows:

Workers’ Comp Data Match Cancellation Letter

Dear –

[State name] has been participating in a voluntary data exchange program between [state’s Workers’ Comp division] and the Centers for Medicare & Medicaid Services (CMS). Through this program [State name] has been submitting certain Workers’ Compensation program information to CMS electronically. The information provided by the state has been assisting CMS in determining the nature of the Medicare program’s responsibility in the payment of Workers’ Compensation claims.

This voluntary reporting arrangement has now ended. On July 1, 2009, Section 111 of the Medicare, Medicaid, and SCHIP Extension Act (the MMSEA) became effective for Workers’ Compensation insurance coverage. As of that date, the reporting of Workers’ Compensation information in support of Medicare Secondary Payer (MSP) determinations by CMS became mandatory. All existing voluntary reporting arrangements involving Workers’ Compensation programs are now null and void.

Picture of Woman Writing dreaded medicare Letter concept

July 1, 2009, is the date Section 111 reporting became effective, but it is not the date that states will begin to report Workers’ Compensation information under the Section 111 requirements. In summary, states that will be reporting Workers’ Compensation data through the Section 111 process are required to register for Section 111 reporting by September 30, 2009. The testing of the electronic data exchange process will begin on January 1, 2010. The first “production” file exchanges will start on April 1, 2010.

The process for arranging Section 111 reporting, and all the reporting timeline benchmarks that have been established are described in full on the Section 111 Website, www.cms.hhs.gov/mandatoryinsrep . The current version of the “NGHP User Guide” and additional instructions needed to report Workers’ Compensation information are located on the Website’s “Liability Insurance, Self-Insurance, No-Fault Insurance and Workers Compensation (NGHP)” page.

Thank you for your participation in the voluntary workers’ compensation data information-sharing program with CMS. If you have questions about your state’s responsibilities under the mandatory Section 111 reporting requirements, please contact William Decker of my staff at (410) 786-0125.

Sherri McQueen
Division of Medicare Benefit Coordination

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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