The Affordable Care Act (ACA) is transforming the healthcare and health insurance industries. Here Jessica Smythe, a Medicare Secondary Payer Act Compliance Consultant with ISO Claims Partners, discusses how the ACA is also affecting workers compensation.
Ms. Smythe says the impact of the ACA on Medicare and Medicaid is far-reaching. A large portion of the ACA was designed to curb Medicare fraud and waste, and “we are examining where there will be a claim or cost shifting…onto the Property/Casualty industry because of deep Medicare cuts.“ It is important for insurers to look at there Medicare compliance because “Medicare is going to try to recoup as much money as they can from the insurance industry.”
According to Ms. Smythe, the Medicare Secondary Payer Act has had an impact on insurer reporting. This Act has been on the books since 1980 and amended in 2007 to include a provision designed to include insurers (known as RRE) and determine if Medicare made claim payments to workers compensation claimants, and whether they need to be reimbursed. Ms. Smythe says this has added another layer of complexity with respect to Medicare compliance.
For Medicare, Workers Comp. is handled differently than the general liability, in both claims reporting and settlements. While there are similarities between workers comp and general liability in the process reimbursement, for General Liability there are conditional payments. Ms. Smythe suggests “insurers…heighten (their) perspective around compliance and Medicare reimbursement.”
Ms. Smythe warns that Medicare is spending $300 million in the next ten years to add more contractors, and the Department of Justice will also have more access to CMS databases to make sure that the carriers and reporting correctly. She reminds insurers of the significant penalties associated with failure to properly report to Medicare. Fines are a $1000/day for the RRE’s failure to report.