29–006 

112TH CONGRESS REPT. 112–715 " ! HOUSE OF REPRESENTATIVES 2d Session Part 1 

STRENGTHENING MEDICARE AND REPAYING TAXPAYERS 

ACT OF 2012 

DECEMBER 20, 2012.—Ordered to be printed 

Mr. UPTON, from the Committee on Energy and Commerce, 

submitted the following 

R E P O R T 

[To accompany H.R. 1063] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Energy and Commerce, to whom was referred 

the bill (H.R. 1063) to amend title XVIII of the Social Security Act 

with respect to the application of Medicare secondary payer rules 

for certain claims, having considered the same, report favorably 

thereon with an amendment and recommend that the bill as 

amended do pass. 

CONTENTS 

Page 

Amendment .............................................................................................................. 1 

Purpose and Summary ............................................................................................ 5 

Background and Need for Legislation .................................................................... 5 

Hearings ................................................................................................................... 7 

Committee Consideration ........................................................................................ 7 

Committee Votes ...................................................................................................... 8 

Committee Oversight Findings ............................................................................... 8 

Statement of General Performance Goals and Objectives .................................... 8 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 8 

Earmarks, Limited Tax Benefits, and Limited Tariff Benefits ........................... 8 

Committee Cost Estimate ....................................................................................... 8 

Congressional Budget Office Estimate ................................................................... 8 

Federal Mandates Statement ................................................................................. 11 

Advisory Committee Statement .............................................................................. 11 

Applicability to Legislative Branch ........................................................................ 11 

Section-by-Section Analysis of the Legislation ...................................................... 11 

Changes in Existing Law Made by the Bill, as Reported ..................................... 12 

AMENDMENT

The amendment is as follows: 


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Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Strengthening Medicare And Repaying Taxpayers Act of 2012’’. 

(b) TABLE OF CONTENTS.—The table of contents of this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Determination of reimbursement amount through CMS website to improve program efficiency. 

Sec. 3. Fiscal efficiency and revenue neutrality. 

Sec. 4. Reporting requirement. 

Sec. 5. Use of social security numbers and other identifying information in reporting. 

Sec. 6. Statute of limitations. 

SEC. 2. DETERMINATION OF REIMBURSEMENT AMOUNT THROUGH CMS WEBSITE TO IMPROVE PROGRAM EFFICIENCY. 

Section 1862(b)(2)(B) of the Social Security Act (42 U.S.C. 1395y(b)(2)(B)) is 

amended by adding at the end the following new clause: 

‘‘(vii) USE OF WEBSITE TO DETERMINE FINAL CONDITIONAL REIMBURSEMENT AMOUNT.— 

‘‘(I) NOTICE TO SECRETARY OF EXPECTED DATE OF A SETTLEMENT, 

JUDGMENT, ETC.—In the case of a payment made by the Secretary 

pursuant to clause (i) for items and services provided to the claimant, the claimant or applicable plan (as defined in paragraph 

(8)(F)) may at any time beginning 120 days before the reasonably 

expected date of a settlement, judgment, award, or other payment, 

notify the Secretary that a payment is reasonably expected and the 

expected date of such payment. 

‘‘(II) SECRETARY PROVIDING ACCESS TO CLAIMS INFORMATION

THROUGH A WEBSITE.—The Secretary shall maintain and make 

available to individuals to whom items and services are furnished 

under this title (and to authorized family or other representatives 

recognized under regulations and to an applicable plan which has 

obtained the consent of the individual) access to information on the 

claims for such items and services (including payment amounts for 

such claims), including those claims that are attributable to a specific injury or incident that forms the basis for a settlement, judgment, award or other payment relating to an injury or incident to 

which this subsection applies. Such access shall be provided to an 

individual, representative, or plan through a website that requires 

a password to gain access to the information. The Secretary shall 

update the information on claims and payments on such website in 

as timely a manner as possible but not later than 15 days after the 

date of receipt of such claims or the making of such payments, respectively. Information related to claims and payments subject to 

the notice under subclause (I) shall be maintained and made available consistent with the following: 

‘‘(aa) The information shall be as complete as possible and 

shall include provider or supplier name, diagnosis codes (if 

any), dates of service, and conditional payment amounts. 

‘‘(bb) The information accurately identifies those claims and 

payments that are related to an injury or incident to which the 

provisions of this subsection apply. 

‘‘(cc) The website provides a method for the receipt of secure 

electronic communications with the individual, representative, 

or plan involved. 

‘‘(dd) The website provides that information is transmitted 

from the website in a form that includes an official time and 

date that the information is transmitted. 

‘‘(ee) The website shall permit the individual, representative, 

or plan to download a statement of reimbursement amounts (in 

this clause referred to as a ‘statement of reimbursement 

amount’) on payments for claims under this title relating to a 

specific injury or incident of the individual. 

‘‘(III) USE OF TIMELY WEB DOWNLOAD AS BASIS FOR FINAL CONDITIONAL AMOUNT.—If an individual (or other claimant or applicable 

plan with the consent of the individual) obtains a statement of reimbursement amount from the website during the protected period 

as defined in subclause (V) and the related settlement, judgment, 

award or other payment is made during such period, then the last 

statement of reimbursement amount that is downloaded during 


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such period and within 3 business days before the date of the settlement, judgment, award, or other payment shall constitute the 

final conditional amount subject to recovery under clause (ii) related to such settlement, judgment, award, or other payment. 

‘‘(IV) RESOLUTION OF DISCREPANCIES.—If the individual (or authorized representative) believes there is a discrepancy with the 

statement of reimbursement amount, the Secretary shall provide a 

timely process to resolve the discrepancy. Under such process the 

individual (or representative) must provide an alternate final conditional payment amount and documentation of the basis for such 

alternate amount. Within 15 days after the date of receipt of such 

documentation, the Secretary shall determine whether there is a 

reasonable basis for such alternate final conditional payment 

amount. If the Secretary does not make such determination within 

the 15-day period, then the alternate final conditional payment 

amount shall become the final conditional payment amount. If the 

Secretary determines within such period that there is not a reasonable basis for the alternate amount, the original final conditional 

payment amount is reconfirmed. If the Secretary determines within 

such period that there is a reasonable basis for an alternate final 

conditional payment amount, the Secretary must respond in a 

timely manner by agreeing to the alternative final conditional payment amount or by providing documentation showing with good 

cause why the Secretary is not agreeing to such amount and either 

reconfirming the original final conditional payment amount or establishing another alternative final conditional payment amount. 

In no case shall the process under this subclause be treated as an 

appeals process or as establishing a right of appeal for a statement 

of reimbursement amount and there shall be no administrative or 

judicial review of the Secretary’s determinations under this subclause. 

‘‘(V) PROTECTED PERIOD.—In subclause (III), the term ‘protected 

period’ means, with respect to a settlement, judgment, award or 

other payment relating to an injury or incident, the portion (if any) 

of the period beginning on the date of notice under subclause (I) 

with respect to such settlement, judgment, award, or other payment that is after the end of a Secretarial response period beginning on the date of such notice to the Secretary. Such Secretarial 

response period shall be a period of 65 days, except that such period may be extended by the Secretary for a period of an additional 

30 days if the Secretary determines that additional time is required to address claims for which payment has been made. Such 

Secretarial response period shall be extended and shall not include 

any days for any part of which the Secretary determines (in accordance with regulations) that there was a failure in the claims and 

payment posting system and the failure was justified due to exceptional circumstances (as defined in such regulations). Such regulations shall define exceptional circumstances in a manner so that 

not more than 1 percent of the repayment obligations under this 

subclause would qualify as exceptional circumstances. 

‘‘(VI) EFFECTIVE DATE.—The Secretary shall promulgate final 

regulations to carry out this clause not later than 9 months after 

the date of the enactment of this clause. 

‘‘(VII) WEBSITE INCLUDING SUCCESSOR TECHNOLOGY.—In this 

clause, the term ‘website’ includes any successor technology. 

‘‘(viii) RIGHT OF APPEAL FOR SECONDARY PAYER DETERMINATIONS RELATING TO LIABILITY INSURANCE (INCLUDING SELF-INSURANCE), NO FAULT

INSURANCE, AND WORKERS’ COMPENSATION LAWS AND PLANS.—The Secretary shall promulgate regulations establishing a right of appeal and 

appeals process, with respect to any determination under this subsection for a payment made under this title for an item or service for 

which the Secretary is seeking to recover funds from an applicable plan 

(as defined in paragraph (8)(F)) that is a primary plan under subsection 

(A)(ii), under which the applicable plan involved, or an attorney, agent, 

or third party administrator on behalf of such plan, may appeal such 

determination. The individual furnished such an item or service shall 

be notified of the plan’s intent to appeal such determination.’’. 


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SEC. 3. FISCAL EFFICIENCY AND REVENUE NEUTRALITY. 

(a) IN GENERAL.—Section 1862(b) of the Social Security Act (42 U.S.C. 1395y(b)) 

is amended— 

(1) in paragraph (2)(B)(ii), by striking ‘‘A primary plan’’ and inserting ‘‘Subject 

to paragraph (9), a primary plan’’; and 

(2) by adding at the end the following new paragraph: 

‘‘(9) EXCEPTION.— 

‘‘(A) IN GENERAL.—Clause (ii) of paragraph (2)(B) and any reporting required by paragraph (8) shall not apply with respect to any settlement, 

judgment, award, or other payment by an applicable plan constituting a 

total payment obligation to a claimant of not more than the single threshold 

amount calculated by the Secretary under subparagraph (B) for the year involved. 

‘‘(B) ANNUAL COMPUTATION OF THRESHOLDS.—Not later than November 

15 before each year, the Secretary shall calculate and publish a single 

threshold amount for settlements, judgments, awards, or other payments 

for conditional payment obligations arising from liability insurance (including self-insurance) and for alleged physical trauma-based incidents (excluding alleged ingestion, implantation, or exposure cases) subject to this section for that year. Each such annual single threshold amount for a year 

shall be set such that the expected average amount to be credited to the 

Medicare trust funds of collections of conditional payments from such settlements, judgments, awards, or other payments for each of liability insurance 

(including self-insurance), workers’ compensation laws or plans, and no 

fault insurance subject to this section shall equal the expected cost of collection incurred by the United States (including payments made to contractors) for a conditional payment from each of liability insurance (including 

self-insurance) and alleged physical trauma- based incidents (excluding alleged ingestion, implantation or exposure cases) subject to this section for 

the year. At the time of calculating, but before publishing, the single 

threshold amount for a year, the Secretary shall inform, and seek review 

of, the Comptroller General of the United States with regard to such 

amount. The Secretary shall include, as part of such publication for a 

year— 

‘‘(i) the expected cost of collection incurred by the United States (including payments made to contractors) for a conditional payment arising from liability insurance (including self-insurance) and from alleged 

physical trauma-based incidents (excluding alleged ingestion, implantation or exposure cases; and 

‘‘(ii) a summary of the methodology and data used by the Secretary 

in computing each such threshold amount and such cost of collection. 

‘‘(C) TREATMENT OF ONGOING EXPENSES.—For purposes of this paragraph 

and with respect to a settlement, judgment, award, or other payment not 

otherwise addressed in clause (ii) of paragraph (2)(B) involving the ongoing 

responsibility for medical payments, such payment shall include only the 

cumulative value of the medical payments made. 

‘‘(D) REPORT TO CONGRESS.—Not later than November 15 before each 

year, the Secretary shall submit to the Congress a report on a single 

threshold amount for settlements, judgments, awards, or other payments 

for conditional payment obligations arising from each of liability insurance 

(including self-insurance) claims for ingestion, implantation and exposure 

cases, workers compensation cases, and no fault insurance cases subject to 

this section for that year. For each such report, the Secretary shall— 

‘‘(i) calculate each such threshold amount by using the methodology 

described in subparagraph (B); and 

‘‘(ii) include a summary of the methodology and data used in calculating each such threshold amount and the amount of expected savings 

under this title achieved by the Secretary implementing such thresholds.’’. 

(b) EFFECTIVE DATE.—The amendments made by subsection (a) shall apply to 

years beginning more than 41⁄2 months after the date of the enactment of this Act. 

SEC. 4. REPORTING REQUIREMENT. 

Section 1862(b)(8) of the Social Security Act (42 U.S.C. 1395y(b)(8)) is amended— 

(1) in the first sentence of subparagraph (E)(i), by striking ‘‘shall be subject’’ 

and all that follows through the end of the sentence and inserting the following: 

‘‘may be subject to a civil money penalty of up to $1,000 for each day of noncompliance with respect to each claimant.’’; and 

(2) by adding at the end the following new subparagraph: 


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‘‘(I) REGULATIONS.—Not later than 60 days after the date of the enactment of this subparagraph, the Secretary shall publish a notice in the Federal Register soliciting proposals, which will be accepted during a 60-day 

period, for the specification of practices for which sanctions will and will not 

be imposed under subparagraph (E), including not imposing sanctions for 

good faith efforts to identify a beneficiary pursuant to this paragraph under 

an applicable entity responsible for reporting information. After considering 

the proposals so submitted, the Secretary, in consultation with the Attorney 

General, shall publish in the Federal Register, including a 60-day period for 

comment, proposed specified practices for which such sanctions will and 

will not be imposed. After considering any public comments received during 

such period, the Secretary shall issue final rules specifying such practices.’’. 

SEC. 5. USE OF SOCIAL SECURITY NUMBERS AND OTHER IDENTIFYING INFORMATION IN REPORTING. 

Section 1862(b)(8)(B) of the Social Security Act (42 U.S.C. 1395y(b)(8)(B)) is 

amended by adding at the end (after and below clause (ii)) the following: 

‘‘Not later than 18 months after the date of enactment of this sentence, 

the Secretary shall modify the reporting requirements under this paragraph 

so that an applicable plan in complying with such requirements is permitted but not required to access or report to the Secretary beneficiary social security account numbers or health identification claim numbers, except that the deadline for such modification shall be extended by one or 

more periods (specified by the Secretary) of up to 1 year each if the Secretary notifies the committees of jurisdiction of the House of Representatives and of the Senate that the prior deadline for such modification, without such extension, threatens patient privacy or the integrity of the secondary payer program under this subsection. Any such deadline extension 

notice shall include information on the progress being made in implementing such modification and the anticipated implementation date for 

such modification.’’. 

SEC. 6. STATUTE OF LIMITATIONS. 

(a) IN GENERAL.—Section 1862(b)(2)(B)(iii) of the Social Security Act (42 U.S.C. 

1395y(b)(2)(B)(iii)) is amended by adding at the end the following new sentence: ‘‘An 

action may not be brought by the United States under this clause with respect to 

payment owed unless the complaint is filed not later than 3 years after the date 

of the receipt of notice of a settlement, judgment, award, or other payment made 

pursuant to paragraph (8) relating to such payment owed.’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply with 

respect to actions brought and penalties sought on or after 6 months after the date 

of the enactment of this Act. 

PURPOSE AND SUMMARY

H.R. 1063 creates efficiencies in the Medicare Secondary Payer 

program that support beneficiary settlements and speed up the 

process of returning money to the Medicare Trust Fund. 

BACKGROUND AND NEED FOR LEGISLATION

The Medicare Trust Fund (through the Centers for Medicare and 

Medicaid Services (CMS)) has the right to recover Medicare payments that should have been the responsibility of another payer. 

Congress authorized the Medicare Secondary Payer program in 

1980 (§ 1862(b) of the Social Security Act), which identified specific 

conditions under which Medicare is the secondary payer. Those are 

(1) a group health plan based on their own or a spouse’s current 

employment; (2) individuals with Medicare coverage based solely 

on ESRD; (3) auto and other liability insurance; (4) no-fault liability insurance; and (5) workers’ compensation situations, including 

the Black Lung program. 

CMS has not always been aware of situations where Medicare 

should not pay first, and as a result, Medicare has paid for services 

that were the financial responsibility of another payer. To address 


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this particular issue, in 2008, Congress added mandatory reporting 

provisions for GHPs and NGHPs through the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). Such provisions are designed to ensure Medicare is aware of situations where 

the Trust Fund is owed money. 

Mandatory reporting was initially supposed to begin in 2009. 

CMS pushed the effective date to 2011 (for workers’ compensation 

and no-fault insurers) and to 2012 (for other NGHPs, including 

most liability insurers), in part because of concerns raised by the 

industry. Previously, the industry had little or no interaction with 

the Medicare program, and raising awareness of the new requirements and how to comply with them took some time. 

With the new reporting requirements enacted under MIPAA, 

CMS should be able to identify which payments have been made 

by Medicare that should have been the primary responsibility of 

another payer, and therefore should be recovered, as well as situations in which CMS should avoid making Medicare payments when 

another payer is the primary. The requirements also included penalties for non-compliance with reporting. At the time, these requirements were estimated to save Medicare $1.1 billion over 10 

years. 

In most situations involving NGHPs, Medicare will initially pay 

for medical treatment related to the incident, and later seek to recover those payments. This occurs sometimes because treatment is 

provided before CMS is notified of the MSP situation. However, in 

most instances, CMS will continue to pay for the beneficiary’s services while the situation is in resolution so that the beneficiary has 

access to needed medical services in a timely manner. These payments are called ‘‘conditional payments.’’ Once a beneficiary and 

NGHP reach resolution, Medicare will seek to recover any conditional payments made. 

Congress has amended the MSP statute a number of times since 

1980 in order to improve the program. However, the Committee is 

aware of problems and inefficiencies in the program. 

Many MSP claims today still cannot be settled in a timely or conclusive manner for beneficiaries. Under current law, there is no requirement for CMS to provide the parties with amounts due or the 

amount they should set aside to cover future payments before settlement so the parties can allocate appropriately and resolve these 

Medicare obligations during settlement. 

In response to confusion and concerns raised on the part of 

stakeholders once mandatory reporting began, CMS has made a 

number of improvements to the process for reporting settlements 

and getting a final conditional payment amount. 

Some of CMS’s recent efforts include: 

• On June 30, 2011, CMS established a minimum threshold of 

$25 for all recovery demands. (This is consistent with the threshold 

used by the Department of Treasury for collecting delinquent debt 

pursuant to the Debt Collection Improvement Act of 1996.) 

• On September 6, 2011, CMS implemented a $300 threshold for 

certain liability settlements. When established criteria are met, reporting and repayment is not required if the settlement is for $300 

or less. 

• On September 30, 2011, the Medicare Secondary Payer Recovery contractor implemented a self-service information feature to its 


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customer service line. This feature gives callers the ability to get 

the most up-to-date demand/conditional Payment amounts, and the 

dates that those letters were issued, without having to speak to a 

customer service representative. The self-service feature is available for extended hours, and callers have the option of requesting 

information on multiple cases during one phone call. 

• Effective November 7, 2011, CMS implemented a simple fixed 

percentage option for certain types of settlements of $5,000 or less. 

Under this option, the beneficiary/representative can elect to pay 

Medicare 25% of the settlement to resolve Medicare’s recovery 

claim. 

• On February 21, 2012, CMS implemented a process for certain 

settlements of $25,000 or less, where the beneficiary/representative 

can self-identify its conditional payment amount to Medicare prior 

to finalizing a settlement. If all criteria are met, Medicare will respond to the beneficiary within 60 days providing Medicare’s final 

conditional payment amount prior to settlement. 

• CMS implemented a Medicare Secondary Payer Recovery portal on July 2, 2012. The beneficiary can use this portal to obtain 

information about Medicare’s claim payments, conditional payment 

amounts, etc., and input information related to authorizations, settlements, disputed claims, etc. 

While these improvements are designed to give the beneficiary finality with regard to certain settlements without eliminating Medicare’s control over its own processes, the Committee remains concerned about the need for additional improvements to the process. 

HEARINGS

On June 22, 2011, the Subcommittee on Oversight and Investigations held a hearing entitled ‘‘Protecting Medicare with Improvements to the Secondary Payer Regime.’’ At the hearing, the Subcommittee examined the Medicare Secondary Payer system as well 

as methods to improve the Medicare program and protect the fiscal 

integrity of Medicare. The Subcommittee received testimony from: 

• Ms. Deborah Taylor, Director of Financial Management 

Centers for Medicare and Medicaid Services; 

• Mr. James Cosgrove, Director of Health Care, Government 

Accountability Office; 

• Mr. Marc Salm, Vice President of Risk Management, 

Publix Supermarkets, Inc.; 

• Mr. Scott Gilliam, Vice President, Cincinnati Insurance 

Company; 

• Mr. Jason Matzus, Partner, Raizman Frischman & 

Matzus, P.C.; and 

• Ms. Ilene Stein, Federal Policy Director, Medicare Rights 

Center. 

COMMITTEE CONSIDERATION

On September 13, 2012, the Subcommittee on Health met in 

open markup session and favorably forwarded H.R. 1063 to the full 

Committee, as amended, by a voice vote, a quorum being present. 

On September 20, 2012, the full Committee met in open markup 

session and ordered H.R. 1063 favorably reported to the House, as 

amended, by a voice vote, a quorum being present. 


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COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the recorded votes on the motion to report legislation and amendments thereto. There were no 

record votes taken in connection with ordering H.R. 1063 reported. 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee held a hearing on the Medicare 

Secondary Payer program and made findings that are reflected in 

this report. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

The goal of H.R. 1063 is to improve the Medicare Secondary 

Payer system to improve the process of recouping Medicare Trust 

Fund money by encouraging speedier settlements, reducing unnecessary burdens currently that delay or stop settlements from going 

forward, and encouraging timely restitution for beneficiaries who 

have been injured through no fault of their own. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee finds that H.R. 1063 

would result in no new or increased budget authority, entitlement 

authority, or tax expenditures or revenues. 

EARMARKS, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

In compliance with clause 9(e), 9(f), and 9(g) of rule XXI, the 

committee finds that H.R. 1063 contains no earmarks, limited tax 

benefits, or limited tariff benefits. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974. 

H.R. 1063—Strengthening Medicare and Repaying Taxpayers Act of 

2011 

Summary: H.R. 1063 would modify the process through which 

the Medicare program is reimbursed when another payer (for example, a liability insurer) is responsible for a beneficiary’s medical 

costs. In general, the provisions of H.R. 1063 would make it easier 

for other payers to repay Medicare, thus reducing program costs. 

CBO estimates that enacting H.R. 1063 would reduce Medicare 

spending by $45 million over the 2013–2022 period. Pay-as-you-go 


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procedures apply because enacting the legislation would affect direct spending. 

The bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 1063 is shown in the following table. The costs 

of this legislation fall within budget function 570 (Medicare). 

By fiscal year, in millions of dollars— 

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013– 

2017 

2013– 

2022 

CHANGES IN DIRECT SPENDING 

Estimated Budget Authority .. ¥2 ¥4 ¥4 ¥4 ¥4 ¥5 ¥5 ¥5 ¥6 ¥6 ¥18 ¥45 

Estimated Outlays ................. ¥2 ¥4 ¥4 ¥4 ¥4 ¥5 ¥5 ¥5 ¥6 ¥6 ¥18 ¥45 

Basis of estimate: The estimate assumes that the bill would be 

enacted late in calendar year 2012 and that its provisions would 

take effect by the end of fiscal year 2013. Medicare is the ‘‘secondary payer’’ when another insurer has an obligation to pay for 

certain health spending by beneficiaries. For example, if a Medicare beneficiary is injured in a car accident, auto liability insurance 

is usually responsible for any resulting medical bills. Because establishing an insurer’s obligation to pay can be time-consuming, 

the Medicare program will often pay for a beneficiary’s medical 

costs until it can be determined which payer is liable for the costs. 

In such cases, Medicare makes ‘‘conditional’’ payments and seeks 

reimbursement from the other insurer. 

Section 2 of H.R. 1063 would modify the process through which 

beneficiaries and responsible insurers determine how much the 

Medicare program is owed for conditional payments. Beneficiaries, 

or their representatives, would be able to query a secure Web site 

and receive an estimate of Medicare’s conditional payments. That 

amount would be factored into the settlement between the beneficiary and the insurer, allowing certainty about the amount that 

will be paid to Medicare out of the settlement funds for conditional 

payments made to that point. 

CBO analyzed data from stakeholders with respect to the difference in settlement timeliness between Medicare and non-Medicare cases and the dollar value of settlements for Medicare beneficiaries. CBO estimates that section 2 would allow some settlements to occur more quickly and hasten repayment to Medicare. 

With respect to the number of settlements that occur, CBO estimates that section 2 will have two opposing effects: some cases 

would settle that otherwise would not, because of the easier access 

to information about the amount of the conditional payment, and 

some settlements would include a payment amount that is lower 

than it would be under current law because of the timing of the 

determination of the conditional payment. CBO estimates that the 

net effect of those two opposing effects would result in a slight reduction in outlays over the 2013–2022 period. 

Section 3 would exempt insurers from repaying Medicare for certain small claims. Based on information from the Medicare Secondary Payer Contractor, CBO believes that section 3 would codify 

current practice and thus would have no budgetary impact. 

H.R. 1063 would change current law with respect to civil monetary penalties, which may be levied on insurers that do not report 


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on a timely basis their obligation to pay for medical expenses incurred by Medicare beneficiaries. Under Section 1862 (b)(8) of the 

Social Security Act, there is a daily $1,000 penalty for failure to report. Section 4 of the legislation would allow penalties at the discretion of the Secretary of the Department of Health and Human 

Services and also require notice-and-comment rulemaking to establish the conditions under which penalties will be assessed. CBO expects that this provision could reduce the penalties levied on insurers, but estimates that the amount of the change in penalty collections would not be significant. 

Section 5 would direct the Secretary to modify the reporting requirements under the Medicare Secondary Payer (MSP) statute to 

make optional the use of beneficiaries’ Social Security Numbers or 

Health Insurance Claim Numbers. H.R. 1063 would require the 

Secretary to change reporting requirements within 18 months of 

the legislation’s enactment, but allows multiple one-year extensions 

if the Secretary notifies the relevant Congressional committees that 

such an extension is necessary to ensure beneficiary privacy or the 

efficient operation of the MSP system. CBO expects that the Secretary would receive multiple extensions of the deadline for this 

new requirement. As a result, CBO estimates that provision would 

have no significant budgetary effect over the 2013–2022 period. 

Section 6 would shorten the statute of limitations with respect to 

the federal government’s ability to bring a complaint against an insurer or other third party for failure to comply with the MSP statute. CBO estimates that this provision would have no significant 

budgetary impact. 

Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act 

of 2010 establishes budget-reporting and enforcement procedures 

for legislation affecting direct spending or revenues. The net 

changes in outlays that are subject to those pay-as-you-go procedures are shown in the following table. 

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 1063, AS ORDERED REPORTED BY THE 

HOUSE COMMITTEE ON ENERGY AND COMMERCE ON SEPTEMBER 20, 2012 

By fiscal year, in millions of dollars— 

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013– 

2017 

2013– 

2022 

NET INCREASE OR DECREASE (¥) IN THE DEFICIT 

Statutory Pay-As-You-Go Impact ................................... ¥2 ¥4 ¥4 ¥4 ¥4 ¥5 ¥5 ¥5 ¥6 ¥6 ¥18 ¥45 

Intergovernmental and private-sector impact: H.R. 1063 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA and would impose no costs on state, local, or tribal governments. 

Estimate prepared by: Federal costs: Lara Robillard; Impact on 

state, local, and tribal governments: Lisa Ramirez-Branum; Impact 

on the private sector: Alexia Diorio. 

Estimate approved by: Holly Harvey, Deputy Assistant Director 

for Budget Analysis. 


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FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

Section 1 establishes the short title of the bill as the ‘‘Strengthening Medicare And Repaying Taxpayers Act of 2012’’. 

Sec. 2. Determination of reimbursement amount through CMS 

website to improve program efficiency 

Section 2 requires the Secretary to maintain and make available 

to individuals to whom items and services are furnished under this 

title (and representatives) access to information through a website 

for items and services (including payment amounts) for claims that 

are attributable to a specific injury or incident that forms the basis 

for a settlement, judgment, award, or other payment relating to an 

injury or incident to which this subsection applies. The Secretary 

shall update this website for any payment or claims information 

within 15 days of receipt of such claim or payment made, respectively. Upon notice of intent to settle, the Secretary has a protected 

period of no less than 65 days, but no more than 95 days (except 

for exceptional circumstances), in which to post claims received or 

payments made on the website. After conclusion of the protected 

period, but no more than 72 hours from the date of settlement, parties subject to repayment are required to draw down the final conditional payment amount from the website. 

The bill requires the Secretary to respond promptly when notified of a discrepancy related to repayment amounts posted on the 

website and create a right of appeals, through regulation, for determinations made under this subsection. 

Sec. 3. Fiscal efficiency and revenue neutrality 

Section 3 requires the Secretary to calculate, on an annual basis, 

a single threshold amount under which the cost of seeking repayment of a claim costs the Medicare program more than it expects 

to receive in repayment. Such threshold shall be reviewed by the 

Comptroller General of the United States and submitted to Congress no later than November 15 of each year. 


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Sec. 4. Reporting requirement 

Section 4 changes the current mandatory $1,000 per day per 

claimant penalty for reporting failures under the Medicare Secondary Payer statute to a requirement that parties ‘‘may be subject 

to a civil money penalty of up to $1,000 for each day of noncompliance with respect to each claimant’’ in order to allow the Secretary 

more discretion when assessing fines. Such a change reflects the 

committees desire to grant the Secretary more flexibility when 

dealing with good faith efforts. 

Sec. 5. Use of social security numbers and other identifying information in reporting 

Section 5 requires the Secretary to modify existing reporting requirements within 18 months of enactment so that an applicable 

plan in complying with such requirements is permitted but not required to access or report to the Secretary beneficiary social security account numbers or health identification claim numbers. This 

deadline may be extended annually if the Secretary certifies to the 

committees of jurisdiction in the House and Senate that such a system threatens patient privacy or the integrity of the Medicare Secondary Payer system. 

Sec. 6. Statute of limitations 

Section 6 creates a statute of limitations under the Medicare Secondary Payer statute so that the Medicare program may not seek 

repayment from beneficiaries or other related parties three years 

after the date the Secretary receives a notice of settlement. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

SOCIAL SECURITY ACT 

* * * * * * * 

TITLE XVIII—HEALTH INSURANCE FOR THE AGED AND 

DISABLED 

* * * * * * * 

PART E—MISCELLANEOUS PROVISIONS

* * * * * * * 

EXCLUSIONS FROM COVERAGE AND MEDICARE AS SECONDARY PAYER

SEC. 1862. (a) * * * 

(b) MEDICARE AS SECONDARY PAYER.— 

(1) * * * 

(2) MEDICARE SECONDARY PAYER.— 

(A) * * * 

(B) CONDITIONAL PAYMENT.— 


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(i) * * * 

(ii) REPAYMENT REQUIRED.—øA primary plan¿ Subject to paragraph (9), a primary plan, and an entity 

that receives payment from a primary plan, shall reimburse the appropriate Trust Fund for any payment 

made by the Secretary under this title with respect to 

an item or service if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service. A primary 

plan’s responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon 

the recipient’s compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a 

claim against the primary plan or the primary plan’s 

insured, or by other means. If reimbursement is not 

made to the appropriate Trust Fund before the expiration of the 60-day period that begins on the date notice 

of, or information related to, a primary plan’s responsibility for such payment or other information is received, the Secretary may charge interest (beginning 

with the date on which the notice or other information 

is received) on the amount of the reimbursement until 

reimbursement is made (at a rate determined by the 

Secretary in accordance with regulations of the Secretary of the Treasury applicable to charges for late 

payments). 

(iii) ACTION BY UNITED STATES.—In order to recover 

payment made under this title for an item or service, 

the United States may bring an action against any or 

all entities that are or were required or responsible 

(directly, as an insurer or self-insurer, as a third-party 

administrator, as an employer that sponsors or contributes to a group health plan, or large group health 

plan, or otherwise) to make payment with respect to 

the same item or service (or any portion thereof) under 

a primary plan. The United States may, in accordance 

with paragraph (3)(A) collect double damages against 

any such entity. In addition, the United States may 

recover under this clause from any entity that has received payment from a primary plan or from the proceeds of a primary plan’s payment to any entity. The 

United States may not recover from a third-party administrator under this clause in cases where the thirdparty administrator would not be able to recover the 

amount at issue from the employer or group health 

plan and is not employed by or under contract with 

the employer or group health plan at the time the action for recovery is initiated by the United States or 

for whom it provides administrative services due to 

the insolvency or bankruptcy of the employer or plan. 

An action may not be brought by the United States 

under this clause with respect to payment owed unless 

the complaint is filed not later than 3 years after the 

date of the receipt of notice of a settlement, judgment, 


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award, or other payment made pursuant to paragraph 

(8) relating to such payment owed. 

* * * * * * * 

(vii) USE OF WEBSITE TO DETERMINE FINAL CONDITIONAL REIMBURSEMENT AMOUNT.— 

(I) NOTICE TO SECRETARY OF EXPECTED DATE OF

A SETTLEMENT, JUDGMENT, ETC.—In the case of a 

payment made by the Secretary pursuant to clause 

(i) for items and services provided to the claimant, 

the claimant or applicable plan (as defined in 

paragraph (8)(F)) may at any time beginning 120 

days before the reasonably expected date of a settlement, judgment, award, or other payment, notify 

the Secretary that a payment is reasonably expected and the expected date of such payment. 

(II) SECRETARY PROVIDING ACCESS TO CLAIMS INFORMATION THROUGH A WEBSITE.—The Secretary 

shall maintain and make available to individuals 

to whom items and services are furnished under 

this title (and to authorized family or other representatives recognized under regulations and to 

an applicable plan which has obtained the consent 

of the individual) access to information on the 

claims for such items and services (including payment amounts for such claims), including those 

claims that are attributable to a specific injury or 

incident that forms the basis for a settlement, 

judgment, award or other payment relating to an 

injury or incident to which this subsection applies. 

Such access shall be provided to an individual, 

representative, or plan through a website that requires a password to gain access to the information. The Secretary shall update the information 

on claims and payments on such website in as 

timely a manner as possible but not later than 15 

days after the date of receipt of such claims or the 

making of such payments, respectively. Information related to claims and payments subject to the 

notice under subclause (I) shall be maintained and 

made available consistent with the following: 

(aa) The information shall be as complete as 

possible and shall include provider or supplier 

name, diagnosis codes (if any), dates of service, and conditional payment amounts. 

(bb) The information accurately identifies 

those claims and payments that are related to 

an injury or incident to which the provisions 

of this subsection apply. 

(cc) The website provides a method for the 

receipt of secure electronic communications 

with the individual, representative, or plan involved. 

(dd) The website provides that information 

is transmitted from the website in a form that 


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includes an official time and date that the information is transmitted. 

(ee) The website shall permit the individual, 

representative, or plan to download a statement of reimbursement amounts (in this 

clause referred to as a ‘‘statement of reimbursement amount’’) on payments for claims 

under this title relating to a specific injury or 

incident of the individual. 

(III) USE OF TIMELY WEB DOWNLOAD AS BASIS

FOR FINAL CONDITIONAL AMOUNT.—If an individual (or other claimant or applicable plan with 

the consent of the individual) obtains a statement 

of reimbursement amount from the website during 

the protected period as defined in subclause (V) 

and the related settlement, judgment, award or 

other payment is made during such period, then 

the last statement of reimbursement amount that 

is downloaded during such period and within 3 

business days before the date of the settlement, 

judgment, award, or other payment shall constitute the final conditional amount subject to recovery under clause (ii) related to such settlement, 

judgment, award, or other payment. 

(IV) RESOLUTION OF DISCREPANCIES.—If the individual (or authorized representative) believes 

there is a discrepancy with the statement of reimbursement amount, the Secretary shall provide a 

timely process to resolve the discrepancy. Under 

such process the individual (or representative) 

must provide an alternate final conditional payment amount and documentation of the basis for 

such alternate amount. Within 15 days after the 

date of receipt of such documentation, the Secretary shall determine whether there is a reasonable basis for such alternate final conditional payment amount. If the Secretary does not make such 

determination within the 15-day period, then the 

alternate final conditional payment amount shall 

become the final conditional payment amount. If 

the Secretary determines within such period that 

there is not a reasonable basis for the alternate 

amount, the original final conditional payment 

amount is reconfirmed. If the Secretary determines 

within such period that there is a reasonable basis 

for an alternate final conditional payment amount, 

the Secretary must respond in a timely manner by 

agreeing to the alternative final conditional payment amount or by providing documentation showing with good cause why the Secretary is not 

agreeing to such amount and either reconfirming 

the original final conditional payment amount or 

establishing another alternative final conditional 

payment amount. In no case shall the process 

under this subclause be treated as an appeals procVerDate Mar 15 2010 05:22 Dec 28, 2012 Jkt 029006 PO 00000 Frm 00015 Fmt 6659 Sfmt 6603 E:\HR\OC\HR715P1.XXX HR715P1

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ess or as establishing a right of appeal for a statement of reimbursement amount and there shall be 

no administrative or judicial review of the Secretary’s determinations under this subclause. 

(V) PROTECTED PERIOD.—In subclause (III), the 

term ‘‘protected period’’ means, with respect to a 

settlement, judgment, award or other payment relating to an injury or incident, the portion (if any) 

of the period beginning on the date of notice under 

subclause (I) with respect to such settlement, judgment, award, or other payment that is after the 

end of a Secretarial response period beginning on 

the date of such notice to the Secretary. Such Secretarial response period shall be a period of 65 

days, except that such period may be extended by 

the Secretary for a period of an additional 30 days 

if the Secretary determines that additional time is 

required to address claims for which payment has 

been made. Such Secretarial response period shall 

be extended and shall not include any days for any 

part of which the Secretary determines (in accordance with regulations) that there was a failure in 

the claims and payment posting system and the 

failure was justified due to exceptional circumstances (as defined in such regulations). Such 

regulations shall define exceptional circumstances 

in a manner so that not more than 1 percent of the 

repayment obligations under this subclause would 

qualify as exceptional circumstances. 

(VI) EFFECTIVE DATE.—The Secretary shall promulgate final regulations to carry out this clause 

not later than 9 months after the date of the enactment of this clause. 

(VII) WEBSITE INCLUDING SUCCESSOR TECH- NOLOGY.—In this clause, the term ‘‘website’’ includes any successor technology. 

(viii) RIGHT OF APPEAL FOR SECONDARY PAYER DE- TERMINATIONS RELATING TO LIABILITY INSURANCE (IN- CLUDING SELF-INSURANCE), NO FAULT INSURANCE, AND

WORKERS’ COMPENSATION LAWS AND PLANS.—The Secretary shall promulgate regulations establishing a 

right of appeal and appeals process, with respect to any 

determination under this subsection for a payment 

made under this title for an item or service for which 

the Secretary is seeking to recover funds from an applicable plan (as defined in paragraph (8)(F)) that is a 

primary plan under subsection (A)(ii), under which the 

applicable plan involved, or an attorney, agent, or 

third party administrator on behalf of such plan, may 

appeal such determination. The individual furnished 

such an item or service shall be notified of the plan’s 

intent to appeal such determination. 

* * * * * * * 

(8) REQUIRED SUBMISSION OF INFORMATION BY OR ON BEHALF

OF LIABILITY INSURANCE (INCLUDING SELF-INSURANCE), NO


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FAULT INSURANCE, AND WORKERS’ COMPENSATION LAWS AND

PLANS.— 

(A) * * * 

(B) REQUIRED INFORMATION.—The information described 

in this subparagraph is— 

(i) * * * 

* * * * * * * 

Not later than 18 months after the date of enactment of this 

sentence, the Secretary shall modify the reporting requirements under this paragraph so that an applicable plan in 

complying with such requirements is permitted but not required to access or report to the Secretary beneficiary social 

security account numbers or health identification claim 

numbers, except that the deadline for such modification 

shall be extended by one or more periods (specified by the 

Secretary) of up to 1 year each if the Secretary notifies the 

committees of jurisdiction of the House of Representatives 

and of the Senate that the prior deadline for such modification, without such extension, threatens patient privacy or 

the integrity of the secondary payer program under this 

subsection. Any such deadline extension notice shall include information on the progress being made in implementing such modification and the anticipated implementation date for such modification. 

* * * * * * * 

(E) ENFORCEMENT.— (i) IN GENERAL.—An applicable plan that fails to 

comply with the requirements under subparagraph (A) 

with respect to any claimant øshall be subject to a civil money penalty of $1,000 for each day of noncompliance with respect to each claimant.¿ may be subject to a civil money penalty of up to $1,000 for each 

day of noncompliance with respect to each claimant. 

The provisions of subsections (e) and (k) of section 

1128A shall apply to a civil money penalty under the 

previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 

1128A(a). A civil money penalty under this clause 

shall be in addition to any other penalties prescribed 

by law and in addition to any Medicare secondary 

payer claim under this title with respect to an individual. 

* * * * * * * 

(I) REGULATIONS.—Not later than 60 days after the date 

of the enactment of this subparagraph, the Secretary shall 

publish a notice in the Federal Register soliciting proposals, which will be accepted during a 60-day period, for 

the specification of practices for which sanctions will and 

will not be imposed under subparagraph (E), including not 

imposing sanctions for good faith efforts to identify a beneficiary pursuant to this paragraph under an applicable entity responsible for reporting information. After considering 

the proposals so submitted, the Secretary, in consultation 


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with the Attorney General, shall publish in the Federal 

Register, including a 60-day period for comment, proposed 

specified practices for which such sanctions will and will 

not be imposed. After considering any public comments received during such period, the Secretary shall issue final 

rules specifying such practices. 

(9) EXCEPTION.— (A) IN GENERAL.—Clause (ii) of paragraph (2)(B) and any 

reporting required by paragraph (8) shall not apply with 

respect to any settlement, judgment, award, or other payment by an applicable plan constituting a total payment 

obligation to a claimant of not more than the single threshold amount calculated by the Secretary under subparagraph (B) for the year involved. 

(B) ANNUAL COMPUTATION OF THRESHOLDS.—Not later 

than November 15 before each year, the Secretary shall calculate and publish a single threshold amount for settlements, judgments, awards, or other payments for conditional payment obligations arising from liability insurance 

(including self-insurance) and for alleged physical traumabased incidents (excluding alleged ingestion, implantation, 

or exposure cases) subject to this section for that year. Each 

such annual single threshold amount for a year shall be set 

such that the expected average amount to be credited to the 

Medicare trust funds of collections of conditional payments 

from such settlements, judgments, awards, or other payments for each of liability insurance (including self-insurance), workers’ compensation laws or plans, and no fault 

insurance subject to this section shall equal the expected 

cost of collection incurred by the United States (including 

payments made to contractors) for a conditional payment 

from each of liability insurance (including self-insurance) 

and alleged physical trauma- based incidents (excluding alleged ingestion, implantation or exposure cases) subject to 

this section for the year. At the time of calculating, but before publishing, the single threshold amount for a year, the 

Secretary shall inform, and seek review of, the Comptroller 

General of the United States with regard to such amount. 

The Secretary shall include, as part of such publication for 

a year— 

(i) the expected cost of collection incurred by the 

United States (including payments made to contractors) for a conditional payment arising from liability 

insurance (including self-insurance) and from alleged 

physical trauma-based incidents (excluding alleged ingestion, implantation or exposure cases; and 

(ii) a summary of the methodology and data used by 

the Secretary in computing each such threshold 

amount and such cost of collection. 

(C) TREATMENT OF ONGOING EXPENSES.—For purposes of 

this paragraph and with respect to a settlement, judgment, 

award, or other payment not otherwise addressed in clause 

(ii) of paragraph (2)(B) involving the ongoing responsibility 

for medical payments, such payment shall include only the 

cumulative value of the medical payments made. 


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(D) REPORT TO CONGRESS.—Not later than November 15 

before each year, the Secretary shall submit to the Congress 

a report on a single threshold amount for settlements, judgments, awards, or other payments for conditional payment 

obligations arising from each of liability insurance (including self-insurance) claims for ingestion, implantation and 

exposure cases, workers compensation cases, and no fault 

insurance cases subject to this section for that year. For 

each such report, the Secretary shall— 

(i) calculate each such threshold amount by using 

the methodology described in subparagraph (B); and 

(ii) include a summary of the methodology and data 

used in calculating each such threshold amount and 

the amount of expected savings under this title 

achieved by the Secretary implementing such thresholds. 

* * * * * * * 

Æ 


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