CMS Will Maintain $750 Recovery Threshold for 2021

CMS, Mandatory Insurer Reporting, Medicare Set-Aside Blog, MSP News on November 30, 2020
Posted by Shannon Flynn

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. On November 25, CMS also announced that the recovery threshold for all non-group health plans will remain at $750 for 2021, which 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.

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 2019 and July 2020) related to no-fault insurance and workers’ compensation settlements and made the decision to maintain the $750 threshold. 

CMS also estimated the average cost of recovery for liability and workers’ compensation cases is approximately $318 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.