New Medicare Safe Harbor & Reporting Threshold for Workers’ Compensation Settlements
Under the SMART Act, the Centers for Medicare & Medicaid Services (CMS) is required to set minimum Section 111 mandatory reporting thresholds for liability claims, as well as establish a “safe harbor” regarding conditional payment reimbursements. For liability claims, this number was originally set as $300 as of September 6, 2011, then raised to $1000 per CMS memorandum dated February 28, 2014. In the Alert “2016 Recovery Thresholds for Certain Liability Insurance, No-Fault Insurance, and Workers’ Compensation Settlements, Judgments, Awards or Other Payments,” CMS confirmed this same $1000 liability threshold for reporting and conditional payment collections would remain in place for the remainder of 2016. So liability settlements of $1000 or less do not need to be reported and Medicare’s conditional payment amount related to these cases does not need to be repaid.
Importantly, CMS has extended the concept to workers’ compensation settlements. Effective September 26, 2016, a reporting and safe harbor threshold of $750.00 will apply to workers’ compensation (and no-fault insurance) settlements. According to CMS, “For FY 2016, settlements of $750 or less for nofault insurance and workers’ compensation will not need to be reported and Medicare’s conditional payment amount related to these cases will not need to be repaid.”
Practice Tip: This new safe harbor may give 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.
For more information and the specific memos referenced above, visit CMS’ website.