We’ve recently received several questions with regard to issues surrounding MMSEA from various parties in the Medicare Set-Aside industry.  Following is a snapshot of two of these inquiries:

Are umbrella or excess carriers who reimburse their insureds for claims paid considered Responsible Reporting Entities (RREs)?   In their Non Group Health Plan (NGHP) User Guide as well as in the course of discussion in Town Hall Meetings, CMS has defined RREs as those entities who make payments to claimants directly.  Those entities who reimburse other entities for claims paid and do not make payments to claimants directly are not considered RREs by CMS for purposes of MMSEA reporting.

If a primary liability insurer settles with a bankrupt insured and pays funds into a bankruptcy trust for later payments to claimants, who is the RRE in this situation, the liability insurer or the bankruptcy trust?  At this time, CMS continues to defer their official response on this issue.  As such, the NGHP User Guide does not specifically address the issue of bankruptcy; however, the Interim Record Layout dated 12/05/2008 (published by CMS on their website) does discuss this issue.  In this document, CMS stated that it was considering whether special provisions must be made for an RRE in bankruptcy.   Since the issuance of the Interim Record, the issue has been raised on every Town Hall Meeting conducted by CMS and they have indicated that direction on this issue is forthcoming.

For insight into CMS’ possible handling of this issue, one should consider how the NGHP User Guide addresses self-insurance pools/joint powers authority on page 19 where they state:  If the pool is 1) a separate legal entity with 2) full responsibility to resolve and pay claims using pool funds   3) without involvement of the participating entity, then the self-insurance pool is the RRE.   If all three of these factors apply to a bankruptcy trust, then one could draw the conclusion that it could be identified as an RRE by CMS when they issue their final position in this regard.

For more information or to view the two documents discussed above, please visit CMS’ website at

MEDVAL1-888-SET-ASIDE

Medicare Set-Aside Allocation/Arrangement Recommendations

Submissions to Centers for Medicare and Medicaid Services

Post-Settlement Administration

Pharmacy Benefit Management