On December 29, 2007, President George W. Bush signed and passed amendments to the Medicare Secondary Payer (MSP) Statute entitled the "Medicare, Medicaid, and SCHIP Extension Act of 2007." This new legislation, effective for Group Health Plans on April 1, 2008, and for others as further set forth herein on July 1, 2009, amends the MSP and significantly impacts insurers, mandating new claim reporting requirements and instituting the first concrete, civil penalty for failure to comply with the MSP.

Specifically, the legislation under MSP Amendment, 42 U.S.C. ? 1395y(b)(8), requires all liability, workers' compensation, self-insured, and no-fault insurers to report to Medicare all claims involving Medicare beneficiaries. That is, insurers will now need to determine the Medicare status of all claimants with whom they are engaged in litigation. If a claimant is, in fact, a Medicare beneficiary, an insurer, as of July 1, 2009, will be required to report such claims to Medicare when they are settled, whether resolved by settlement, judgment, or other payment or award.

Under MSP Amendment, 42 U.S.C. ? 1395y(b)(7), with respect to the impact on Group Health Plans, an entity serving as an insurer or third party administrator of a Group Plan will similarly be required to report all claims that are primary to Medicare, or face penalties discussed below. Reporting is subject to further instruction from the Secretary of Health and Human Services.