On February 18, 2014, CMS issued an alert indicating that it could set a threshold under which liability settlements would no longer need to be reported to CMS under MMSEA Section 111 and also would not require conditional payment reimbursement under the MSP. A copy of the alert can be found here.

Unfortunately, the Alert raises questions about the settlements to which it applies.
The heading indicates that it applies to “Liability Insurance Settlement Reporting and Recovery” and the narrative discusses liability (including self-insurance), but the average cost of collection methodology used to determine the threshold includes the costs of the recovery contractor related to NGHP conditional payments that also include no-fault insurance and workers’ compensation. The statutory language indicates that a separate threshold was to be determined for liability insurance (including self-insurance) and for alleged physical trauma-based incidents (excluding alleged ingestion, implantation or exposure).

In the alert, CMS determines that it “could establish a threshold of $1,000, so that physical trauma-based settlements of $1,000 or less do not need to be reported and Medicare’s conditional payment amount for these settlements does not need to be repaid.”

Does the threshold also apply to workers’ compensation and no-fault settlements?

What is the effective date?

The Alert cites only part of the SMART Act statute and does not address the provisions that require a separate report and threshold determinations for conditional payment obligations arising from workers’ compensation cases and from no fault insurance cases.

UWC is checking for clarification.