Medicare Holds $750 Threshold & Section 111 Reporting for 8th Year

By: Gerardo Sanchez

On February 14th, 2024, the Centers for Medicare & Medicaid Services (CMS) published its annual alert regarding mandatory insurer reporting thresholds. For 2024, the threshold will remain at $750, which will mark the eighth consecutive year (since 2017) of remaining at this amount. CMS provided the following language:

As required by section 1862(b) of the Social Security Act, the Centers for Medicare and Medicaid Services (CMS) has reviewed the costs related to collecting Medicare’s conditional payments and compared this to recovery amounts.

Beginning January 1, 2024, the threshold for physical trauma-based liability insurance settlements will remain at $750. CMS will maintain the $750 threshold for no-fault insurance and workers’ compensation settlements, where the no-fault insurer or workers’ compensation entity does not otherwise have ongoing responsibility for medicals.

This means that entities are not required to report, and CMS will not seek recovery on settlements, as outlined above. Please note that the liability insurance (including self-insurance) threshold does not apply to settlements for alleged ingestion, implantation, or exposure cases.

Information on the methodology used to determine the threshold is provided here

Sanderson Firm Commentary:

Of note, CMS is required through Section 202 of the SMART Act to publish this annual report by November 15th of each year, thus this year’s threshold was 3 months delayed. Fortunately, this delayed notice did not impact Responsible Reporting Entities (RREs) this year because the reporting threshold remained unchanged. We anticipate that if CMS changes the threshold in the future, CMS will publish the annual report by November 15th to provide the RREs with appropriate notice.

As mentioned above, this marks the eighth consecutive year where the threshold has remained at $750. With the cost of medical treatment increasing significantly during the past several years and the inflation increase we have all experienced during this same time frame, one must wonder how the threshold has not increased correspondingly. CMS this year provides charts for Liability, No-Fault, and Workers' Compensation insurance illustrating how it used the cost of collection per case ($315) compared to the average demand amounts per settlement range to support the $750 threshold for this year as well.

In the calculation methodology CMS uses to determine the annual threshold, CMS uses the average cost of collection for its contractor to perform Medicare Secondary Payer (MSP) work for the past 12 months. This average cost of collection used to determine the 2023 threshold according to CMS was approximately $306 per case compared to the figure released to determine the 2024 threshold which was $315 or a 2.9% increase.

If you have any questions on the threshold, or Sanderson Firm’s Section 111 reporting and audit solutions, please contact me at Gerardo@sandersoncomp.com.