CMS Will Maintain $750 Recovery Threshold for 2019

CMS, Conditional Payments, Mandatory Insurer Reporting on November 21, 2018
Posted by Jean S. Goldstein, JD

The Strengthening Medicare and Repaying Taxpayers Act of 2012 (the SMART Act) requires the Centers for Medicare & Medicaid Services (CMS) to publish an annual threshold for recovery in November, each year.  This threshold amount reflects an amount for which CMS will not spend more on collections than a claim is likely to yield.  In addition to the webinar announcement earlier this week, CMS also announced that the 2019 recovery threshold for all non-group health plans will not change this year and will remain at $750. This means that settlements of $750 or less do not need to be reported and Medicare’s conditional payment amount related to these cases does not need to be repaid.

In maintaining the $750 threshold, CMS reviewed the costs related to collecting data and determining the amount of Medicare’s recovery claim, as well as the available data (between August 207 and July 2018) related to no-fault insurance and workers’ compensation settlements.  CMS also estimated the average cost of recovery for liability and workers’ compensation cases is approximately $297 per case, based upon the amount of invoices paid to the Benefits Coordination and Recovery Contractors.  CMS then did a comparison of the estimated cost of collection to the average no-fault insurance and workers’ compensation demand amounts per settlement range to arrive at the determination to maintain the threshold amount.

The alert can be found here.

The threshold methodology as described above can be found here.