Product Update

Medicare Secondary Payer Law and Market Corner Updates in Risk Financing


Risk Financing Perspectives for this Risk Financing release provides updates to a discussion on workers compensation claims costs imposed by the Medicare Secondary Payer law and the Medicare, Medicaid, and SCHIP Extension Act (MMSEA) authored by John D'Alusio of D'Alusio Insurance Services in Bradenton, Florida. Under the Omnibus Budget Reconciliation Act of 1981 and Title 42 of the Social Security Act, Congress took steps to give Medicare some degree of fiscal protection by affording it secondary payer protection. In 2007, the MMSEA was signed to add another layer of fiscal protection for the Medicare program. The resulting cost implications for self-insureds, insurance companies, and insureds with high retentions or deductibles are described in this discussion. It summarizes the requirements and explains the responsibilities of insureds and insurers for Medicare Set-Asides, loss reporting, and claims payments. The discussion also addresses a recent proposal by the Centers for Medicare and Medicaid Services to increase the penalties that may be imposed on entities failing to comply with reporting requirements.

"Market Corner" provides quarterly updates on current property and casualty insurance market conditions. Aside from workers compensation, renewals of most major lines of coverage across a broad range of industries have been more difficult than at any time over the last decade. Insurance buyers are often struggling to find adequate insurance capacity for their liability and property risks. The direction of the market over the next several quarters will depend in part on the impacts from potential future waves of COVID-19 infections.