On February 16, 2010, the Centers for Medicare & Medicaid Services (CMS) announced that the deadline for implementation of new reporting obligations required under the Medicare, Medicaid and SCHIP Extension Act (MMSEA) of 2007 has been extended from April 1, 2010, to January 1, 2011.

MMSEA requires that all claims involving Medicare and Medicaid services paid for by CMS be reported to CMS in a timely fashion, so that it can recoup its costs from settlements and awards.

The NORCAL Group has registered both NORCAL Mutual and PMSLIC with CMS and is in the process of testing its file data exchange with CMS. We anticipate having this completed well in advance of the December 31, 2010 deadline. The NORCAL Group has already updated its Claims Department workflow processes to ensure compliance with the new reporting requirements.

While reporting for group health plans (GHP) and other first-party payers has already commenced, the deadline for non-GHP reporting has been extended several times. Fortunately, this has given non-GHP reporting entities such as medical professional liability carriers the opportunity to express concerns directly with CMS.

For example, if the parties in a case fail to meet the reporting obligations, the new regulations extend liability to all parties involved, including the plaintiff, the defendant, the defendant’s insurance carrier and the attorneys on both sides. If CMS is required to take legal action to collect on a lien, these parties can be held liable for twice the amount of the Medicare payment. We anticipate that this may have the practical effect of delaying and possibly increasing the amount of settlements, as all sides work to ensure that their respective obligations have been met.

As always, NORCAL Mutual’s primary focus is on protecting the interests of our insureds. We will continue to monitor CMS’s implementation of the law and will keep you apprised of further developments.

HCP National Insurance is a national medical malpractice and medical professional liability broker appointed by Norcal. HCP National’s Medical Malpractice Insurance brokerage is located in Orange County, CA.