The Economic Impact Of New MMSEA Regulations

Wed Apr 14 16:24:38 EDT 2010
By Dr. Denise Neumann Martin, Dr. Stephanie Plancich, and Mary Elizabeth Stern

Although the US Congress intended Medicare to be a secondary payer -- reimbursing claims only after any primary insurance coverage has been exhausted -- prior to the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA), the Centers for Medicaid and Medicare Services (CMS) did not always have the data necessary to pursue such claims. However, under the new reporting standards, all personal injury tort-related settlements made to a Medicare beneficiary must be reported to CMS. The assumption is that CMS will pursue claims against the settlements to recover any medical costs reimbursed by Medicare related to the alleged tort. In this guest column from Law360, NERA Senior Vice President Dr. Denise Neumann Martin and Vice Presidents Mary Elizabeth Stern and Dr. Stephanie Plancich argue that the threat of a CMS cost-recovery action changes the economic incentives for tort litigation participants. The new Medicare regulations may result in negotiations with CMS over the medical component of settlements, increased litigation among tort defendants, changing settlement values, and an increase in the proportion of cases going to trial.