2021 Medicare Safe Harbor & Reporting Threshold for Liability, No-Fault, and Workers’ Compensation Settlements
As we have addressed previously, under the SMART Act, the Centers for Medicare & Medicaid Services (CMS) is required to set minimum Section 111 mandatory reporting thresholds for liability, no-fault, and workers’ compensation claims. The reporting threshold also establishes a “safe harbor” regarding Medicare conditional payment reimbursements. The numbers can fluctuate from year to year. For example, in liability settlements, the recovery threshold was originally set as $300, then raised to $1000, then lowered to $750.
In November 25, 2020, CMS announced the recovery thresholds for 2021. Beginning January 1, 2021, the recovery threshold for physical trauma-based liability insurance settlement will remain at $750. Similarly, CMS will maintain the $750 threshold for no-fault insurance and workers’ compensation settlements, where the insurer or entity does not otherwise have ongoing responsibility for medicals (ORM).
This recovery threshold is reflected in the newest version of the Section 111 Mandatory Reporting User Guide released January 11, 2021. According to the summary of changes for Version 6.1:
As of January 1, 2021, the threshold for physical trauma-based liability insurance settlements will remain at $750. CMS will maintain the $750 threshold for no-fault insurance and workers’ compensation settlements, where the no-fault insurer or workers’ compensation entity does not otherwise have ongoing responsibly for medicals.
This means that entities are not required to report, and CMS will not seek recovery on settlements, as outlined above. Please note that the liability insurance (including self-insurance) threshold does not apply to settlements for alleged ingestion, implantation, or exposure cases.
Practice Tip: The safe harbors give liability and workers’ compensation practitioners another option when compromising claims with otherwise potentially high Medicare conditional payment liens. Contact Teague Campbell’s Medicare Settlement Solutions team to explore these new options