Top Medicare Secondary Payer Predictions for 2020
Heather Sanderson
January 3, 2020

Medicare Secondary Payer (MSP) developments will take center-stage in 2020 and drastically impact workers’ compensation, no-fault, and general liability insurance plans/carriers.

With 2020 being an election year and healthcare matters as a primary issue for Americans, the continuing debate for Medicare for All, Medicare’s rising costs with an estimate of a spend of $651 billion dollars in 2019[1], two Notices of Proposed Rulemakings impacting MSP projected for release in 2020, and the Medicare Advantage program growing in size, the industry is undeniably poised for changes to how claims with Medicare beneficiaries will need to be handled in 2020 to avoid double damages/penalties. Considering this, we make the following top predictions for MSP compliance in 2020:

  1. The rulemaking on MMSEA Section 111 Civil Monetary Penalties (CMPs) will finalize, and the Centers for Medicare & Medicaid Services (CMS) can issue its first penalty against a noncompliant Responsible Reporting Entity (RRE). We have previously blogged regarding the intended release for this Rulemaking scheduled for December 2019 on the Office of Management and Budget (OMB) website. While slightly delayed, this item is still on OMB’s to-do list, and we know that the proposed rule is drawn up and currently pending at the White House/OIRA.

Recommendations: Be on the lookout for the proposed rule’s release sometime early this year, likely by the end of the first quarter. Therefore, take steps now toward a compliant Section 111 program as CMPs may be discretionarily issued under the SMART Act at up to $1000 per day/per claim. Ultimately, it is optimal to demonstrate good faith efforts to report by late reporting than failing to report a claim to Medicare at all.

  1. Medicare Advantage enrollment will continue to grow, which inevitably increases NGHP claims with Medicare Advantage beneficiaries, which inevitably increases risk for double damage penalties by noncompliant insurance carriers/plans. Last year in 2018, President Trump issued an Executive Order encouraging enrollment in Medicare Advantage Plans. Between 2018 and 2019, total Medicare Advantage enrollment grew by about 1.6 million beneficiaries. The Congressional Budget Office (CBO) projects that the share of beneficiaries enrolled in Medicare Advantage plans will rise to about 47 percent by 2029.[2] As we have blogged about frequently, Medicare Advantage plans continue to bring double damage private cause of action litigation across the country, alleging the failure to reimburse the Medicare Advantage Plan for its conditional payments. Unfortunately, NGHP plans are not currently aware of an injured party’s Medicare Advantage enrollment at the time of settlement, but nonetheless are exposed to double damages. Our recent blog on the PAID Act explains why this legislation is desperately needed.

Recommendations: Support the PAID Act in just two minutes by clicking here, and contact us to craft conditional payment Best Practices to avoid Medicare Advantage double damages litigation.

  1. The usage of Non-Submitted Medicare Set-Asides by workers’ compensation carriers will continue to increase. Workers’ Compensation Medicare Set-Asides (WCMSAs) have officially been around since the Patel Memo was issued in 2001[3] introducing a review process for Medicare Set-Asides. In the last almost 20 years, the workers’ compensation industry has become more knowledgeable on CMS regulations (or lack thereof) surrounding WCMSAs, and at homing in compliant, yet cost-effective MSA programs. Additionally, rigidity and lack of an appeal process for WCMSA determinations has been a deterrent for CMS submissions. As we have experienced over the last few years, more parties will settle with non-submitted Evidence Based Medicare Set-Asides.

Recommendations: In workers’ compensation claims, let us help you take a fresh look at your program and determine if your current Best Practices are in line with primary objectives for achieving MSP compliance as well as cost effective settlement outcomes with Medicare beneficiaries.

  1. A Proposed Rulemaking on Protecting Medicare’s Interests in Liability Settlements will be Released. Regarding Liability Medicare Set-Asides (LMSAs), a Rulemaking on MSP and Future Medicals is currently scheduled for release in February 2020 regarding protecting Medicare’s interest post-settlement in liability claims.[4] While this rulemaking may have been delayed, it is also on the to-do list for CMS to complete and release.

Recommendations: Stay on top of the MSP and Future Medicals rulemaking to be released this year.

2020 will be a transformative year for MSP compliance. Stay tuned and we look forward to keeping you in the know on MSP developments in 2020.


[1] https://www.usgovernmentspending.com/medicare_spending_by_year

[2] https://www.kff.org/medicare/issue-brief/a-dozen-facts-about-medicare-advantage-in-2019/

[3] https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/WCMSA-Memorandums/Downloads/July-23-2001-Memorandum.pdf

[4] https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201910&RIN=0938-AT85