Employers offering health insurance to their employees must understand the Medicare Secondary Payer (MSP) reporting requirements. These regulations ensure compliance with Medicare guidelines and help to avoid penalties for non-compliance. In this article, we will discuss what MSP is, who is affected, and the reporting requirements employers need to follow.
What is Medicare Secondary Payer (MSP)?
Medicare is a federal health insurance program primarily designed for individuals aged 65 and older. It also covers certain individuals with disabilities and those suffering from End-Stage Renal Disease (ESRD). When an individual has multiple insurance options, Medicare typically serves as the secondary payer. This means that another insurance plan, often an employer's group health plan, pays primary medical expenses before Medicare starts to pay.
Who is Affected by MSP Reporting Requirements?
Medicare requires annual reporting in order for the program to review if another entity should have paid in place of Medicare. MSP reporting requirements primarily affect employers who offer group health plans to their employees. If you have 20 or more employees and provide group health coverage, your plan must comply with the MSP reporting rules.
MSP Reporting Requirements for
To ensure compliance with MSP reporting requirements, employers should:
- Identify Medicare-Eligible Employees:
Regularly identify employees who are eligible for Medicare due to age, disability, or ESRD. - Notify Medicare:
Report to Medicare that you have employees with Medicare-eligible plans. - File the Medicare Secondary Payer Working Aged File (MSPWAF) and the Medicare Secondary Payer End-Stage Renal Disease File (MSPESRD):
These files contain information on individuals who have group health plan coverage and are eligible for Medicare. - Provide Information to the Coordination of Benefits (COB) Contractor:
Ensure that your group health plan shares information with Medicare's Coordination of Benefits (COB) Contractor. This helps Medicare identify primary and secondary payers correctly. - Comply with Reporting Deadlines:
MSP reporting has specific deadlines that must be met to avoid penalties. Be sure to stay informed about these dates and submit the required information promptly. - Maintain Accurate Records:
Keep detailed records of the information provided to Medicare, which can help address discrepancies or disputes if they arise.
Penalties for Non-Compliance:
Employers may face financial repercussions if they do not fulfill their obligations under MSP regulations, including the reporting requirement. The Centers for Medicare and Medicaid Services (CMS) recently finalized regulations identifying how and when it will calculate and impose penalties for violation of the MSP reporting requirements. The final regulations take effect December 11, 2023, but don’t apply until October 10, 2024. The regulations indicate that CMS will randomly pick and audit 250 submissions each calendar quarter and will impose penalties of $1,000 per day for untimely reporting.
Understanding and adhering to Medicare Secondary Payer reporting requirements is crucial for employers offering group health plans. Non-compliance can lead to penalties and legal complications.
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