September 12, 2019

MSP Reporting Rule expanded to include Prescription Drug Coverage

In certain instances in which employer-provided health coverage is available, Medicare only pays after the employer plan pays.  The rules governing these situations are known as the Medicare Secondary Payer Rules (MSP rules).  The MSP rules are generally applicable to the working aged, individuals with end stage renal disease and certain disabled individuals.

In 2007, an MSP reporting requirement was imposed, primarily on insurers, third party administrators (TPAs) and plan administrators of self-funded, self-administered health plans (known as, responsible reporting entities, “RRE”).  The purpose of this reporting obligation is to ensure that the MSP rules are properly administered.  Insurers, TPAs and plan administrators are required to register with the Centers for Medicare and Medicaid Services (CMS) to accomplish the required reporting through a dedicated CMS website. 

In October, 2018, a law was enacted that expands the reporting obligation to include prescription drug coverage.  The Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) requires reporting for Medicare beneficiaries who have prescription drug coverage other than, or in addition to Medicare Part D, which is primary to Medicare. This includes prescription drug coverage for an individual who is Medicare-eligible and currently employed, or is the spouse or family member of a worker who is covered by a prescription drug plan. Initially, RREs had the option to include prescription drug coverage in its annual report; however, reporting prescription drug coverage becomes mandatory beginning January 1, 2020.  As a result, CMS released a revised user guide together with a set of FAQs to assist RREs with their prescription drug coverage reporting obligation.

Generally, employers are not involved in this reporting requirement, except to the extent that the insurer or TPA may ask the employer to assist in collection of the required information.


The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.

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