Benefits brokers: your clients are receiving Data Match letters and need to respond!
Have your phones started ringing yet? CMS is sending letters to your clients requesting information for the IRS-SSA-CMS Data Match program. There can be huge ramifications for not responding, including assessing a civil penalty of $1000 per person named in the inquiry, subpoenaing business records and members of the organization, and investigating the group’s health plan to see if a referral to the IRS for an audit would be in order. Make sure your clients are not round-filing these letters.
The reason for the Data Match is simple – it’s used to enforce Medicare Secondary Payer rules. If Medicare paid healthcare claims as Primary when they should have paid them as Secondary, well, they want their money back. Employers with more than 20 employees (using a “belly button” count) should be the primary payer of health claims.
Up until now, the “successful recovery” rate of the Data Match has been about 5%, saving the Medicare Trust Funds more than $3.5 billion dollars. CMS wants to ramp their success rate up to 100%.
When will CMS look to the employer for reimbursement? There are two scenarios: 1) if the group plan was self-funded or 2) if the employer enticed an employee and/or dependent to waive the group medical plan. Enticement can include paying for Medicare premiums, providing a bonus for waiving the medical plan, or increasing salary if waiving coverage. The result can be a catastrophic bill from CMS asking the employer to reimburse claims, with interest and penalties.
When your clients call, they will want to know a few things.
For more information, we recommend the following CMS site:
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I love numbers. I'm a math geek. I read benefits industry articles and periodicals for relaxation (but, honestly, I'm still a fun gal). I also like to share what I've learned and you'll find it all here.