Synergy Blog

Medicare Reduces Reporting Threshold from $1,000 to $750

Medicare has reduced the threshold for when a physical trauma-based liability settlement is large enough that the beneficiary needs to report it and repay conditional payments. On November 15, 2016, the Centers for Medicare & Medicaid Services (“CMS”) issued an alert which decreased the current reporting threshold from $1,000 to $750. The threshold decrease is a result of the mandatory annual review required by Section 202 of the Strengthening Medicare and Repaying Tax Payers Act of 2012 (“SMART Act”) to determine at what level do the costs related to collecting data and determining the amount of Medicare’s recovery claim outweigh the benefits of recovering the conditional payments.

The new threshold is effective as of January 01, 2017 for cases where a recovery demand has not yet been issued. It is important to note this threshold does not apply to settlements for alleged ingestion, implantation, or exposure cases. This means that physical trauma-based liability settlements of $750 or less do not need to be reported, nor will the beneficiary need to repay Medicare’s conditional payments.

CMS determined the average cost of collection for Non-Group Health Plan (NGHP) cases is $368.75 per case. NGHP cases are: liability insurance (including self-insured liability), no-fault insurance, and workers’ compensation. To arrive at a threshold, CMS compared the average cost of collection per case to the average liability insurance demand amount per settlement range. Among liability insurance cases, the average cost of collection most closely aligns with settlements of $750 and below, which have an average final demand amount of $384.25.

Among workers’ compensation and no-fault insurance cases, the settlement ranges of $750 and less result in average demand amounts of $510.03 and $573.27 respectively. These ranges most closely align with the average cost of collection per case. Based on these findings, CMS revised their reporting thresholds.

The SMART Act was designed to save Medicare money. Part of the expected savings is to come from an annual review meant to ensure that the federal government does not spend more money pursuing a reimbursement amount than the cost of that recovery effort.  The wise personal injury attorney can co-op this purpose and save his clients who receive de minimis recoveries from the hassle of dealing with the Medicare conditional payment issue.

The alert is available on the CMS website by click here.

TESTIMONIALS

"I recently engaged Synergy to assist with a complicated PTD settlement involving a substantial Medicare Set Aside. The claimant’s wife has been providing full time attendant care which is not Medicare covered. The Synergy nurse was able to do a full analysis of non-Medicare covered expenses which far exceeded the value of the MSA analysis performed by the carrier’s contracted MSA provider. The non- Medicare figures became the main focus of the settlement negotiations and more than doubled the value of the case. Although I could estimate the attendant care figures, the nurse added in other items that I would not have routinely considered. I also asked Synergy to evaluate the EC’s MSA as well as their prescription review. Synergy offered insight about the prescription donut hole which I did not have a clear understanding about. Again, their insight and information added a great deal of value to the overall settlement. Not only did I learn from Synergy but was able to educate my clients in the process. These are very complex and complicated areas; I will use Synergy again and again!"

Rosemary Eure
Lancaster & Eure

"I learned of Synergy through the state trial lawyers association when I was looking for help in dealing with Medicare. As you know, dealing with Medicare can be difficult and time consuming. We all get the articles and updates regarding Medicare, but Synergy does an incredible job of clarifying so many questions. I cannot thank you and the Synergy staff enough for the assistance, insight, and professionalism. You can be sure that I will only be recommending Synergy to my clients for Medicare issues in the years to come."

Jared P. Greenberg
Greenberg & Strelitz, P.A.

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